As far and away the United States’ No. 1 oil importer, Canada is big in the American energy industry even with its problems of low quality oil and its insufficient means of moving it.
That’s according to Odessa oilman Kirk Edwards and ClearView Energy Partners Managing Director Jacques Rousseau of Washington, D.C.
“Canadian oil is notoriously dirty and they have to burn four billion cubic feet of natural gas a day to heat those tar sands and make four million barrels of oil,” Edwards said.
Referring to the project President Biden squelched on his first day in office, Edwards said, “Another fallacy is the need for the Keystone XL Pipeline because they could not give the U.S. one more barrel of oil than what they’re doing right now if they had the pipeline.
“All the Keystone XL would do is make it more environmentally safe in transporting that oil across the country.”
Edwards said Canada “has a very robust oil and gas industry, but the government is the key player as opposed to the rights being held by private individuals and companies.
“The government holds the majority of the rights to drill and they are dependent on that being a robust economic system, which may be a reason for them to turn a blind eye to the flaring they have to do to make that oil move.”
He said most of Canada’s oilfields are in the western province of Alberta, north of Montana, where some of the world’s thickest oil is mixed with a diluent or light hydrocarbon from natural gas wells to make it transportable by pipelines.
Rousseau said Canada’s production “is a process almost like taking coal out of the ground and boiling it up because a lot of it starts out in a very solid state.
“They have to turn it into more usable oil so a refinery can remove the sulphur and other impurities,” the research company official said.
Rousseau noted that Canada is using the first Keystone Pipeline, which was completed in 2010, to Cushing, Okla., and other lines into the U.S. including one to California and a second one called the Trans-Mountain Pipeline that’s being laid to the West Coast.
“A lot of their oil goes to the refineries on the Texas Gulf Coast,” he said. “Most of their main oilfields are pretty far north in the western part of the country and they have some around Edmonton, north of Calgary.”
Citing a report from the U.S. Energy Information Agency, Rousseau said Canada is America’s top foreign oil supplier with an average of 3.7 million barrels per day out of the five million bpd it produces, compared to the Permian Basin’s 5.3 million bpd.
That’s followed by Mexico with 599,000, Saudi Arabia with 413,000, Colombia with 228,000, Iraq with 223,000, Ecuador with 219,000 and the United Kingdom with 126,000. Russia was shipping 405,000 bpd before its invasion of Ukraine.
Asked what are America’s other advantages from its energy relationship with Canada, Rousseau said, “The proximity and the political situation because they are good partners.
“Their production outpaces the amount of oil they need and we are their primary customer. What happens is that their price goes down because they have more supply than they have the ability to move.
“In what the Canadian government calls ‘oil curtailment,’ they sometimes limit production to get the price raised.”
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Canadian oil flow handicapped - Odessa American
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