U.S. oil exports spike – and most of it comes to Canada
WATCH: All the controversy over pipelines and how much oil lies underneath Alberta might lead you to think we have more than enough to meet our needs. Yet, Canada is importing more oil than ever before. Vassy Kapelos explains.
Oil exports in the United States have hit a 15-year high, and most of that is getting shipped to Canada, according to data from the U.S. Energy Information Administration.
The increase in exports, which have more than doubled in the last year, comes thanks to the booming, oil-rich Bakken in the U.S. Midwest.
But it may seem counter-intuitive that Canada, which produces 3.5 million barrels of oil a day, is bringing so much of it in. Surely there’s enough domestic extraction to serve all Canadians’ needs?
This is why many oil industry advocates argue Canada needs to refine its own crude domestically so it can use it at home. It’s an argument in favour of something like the Energy East pipeline, which would ship Alberta oil to a refinery in Saint John, N.B.
“Most Canadians don’t realize, with the abundance of oil we have here in Canada, we still import almost 700,000 barrels a day into Atlantic Canada and the East Coast refineries,” said Greg Stringham, VP oil sands for the Canadian Association of Petroleum Producers.
Because of the lack of infrastructure, he said, refineries in Eastern Canada don’t have access to the vast amounts of oil being produced out West.
“This underscores the need for an East-West pipeline, as we start looking at the supply into our Atlantic refineries,” Stringham said. “The U.S. right now is probably our largest supplier of foreign oil to Canada. We’d like to replace some of that with Canadian oil.”
TransCanada, the energy giant behind Energy East, has admitted many of the refineries its pipeline will pass through would have to be upgraded to deal with thick oilsands bitumen, or else stick to refining lighter crude from elsewhere.
Natural Resources Minister Greg Rickford agreed that projects such as an East-West pipeline would alleviate Canada’s dependence on foreign oil.
“Our government supports the construction of energy infrastructure that will transport our resources across Canada subject to independent, rigorous and science-based review,” he wrote in an email Monday. “Subject to approval by the National Energy Board, the construction of projects such as the Energy East pipeline proposal would further reduce Canada’s reliance on foreign crude.”
The increase in oil imports highlights an issue with another, contentious pipeline, says Ian Lee, assistant professor at the Sprott School of Business in Ottawa.
He says U.S. President Barack Obama’s hesitance to approve Keystone XL, citing concerns about carbon emissions, is hypocritical.
“He claims he’s the environmental president and yet quietly, behind closed doors, when no one’s looking, he’s allowing and enabling the Americans to export more of their oil to Canada,” Lee said Monday.
While many environmentalist Keystone opponents would rather see less oil produced and consumed, period, others see Alberta’s oilsands crude as dirtier and more environmentally damaging than most. There have also been concerns raised by landowners under whose property Keystone would pass.
But there are also safety concerns when it comes to volatile Bakken oil, which is primarily shipped via rail — a method that’s already proved dangerous in Canada.
The train that derailed in Lac-Megantic, Que. was carrying Bakken oil when it burst into flames, killing 47 people and incinerating the town’s centre.
“Four years ago, there were 500 cars of oil moved in the entire year. Now, it’s over 500 a day,” said Keith Stewart, a researcher with Greepeace Canada. Much of that, however, is coming from Canadian sources.
The government has strengthened safety regulations around moving oil by rail, but critics say that’s not enough.
© Shaw Media, 2014