NCPA - National Center for Policy Analysis


April 3, 2008

It might seem like wishful thinking to press for an expansion of U.S. oil refining capacity.  Yet it is precisely this sort of thinking that is necessary if we are to make use of a vast, secure and reliable supply of fuel from Canada's oil sands, says Mark J. Perry, professor of Finance and Economics at the Flint campus of the University of Michigan.


  • The tar sands hold an estimated 174 billion barrels of crude oil, making Canada's oil-sands deposits second only to Saudi Arabia in global reserves.
  • The United States currently obtains 1 million barrels a day from Canada's tar sands, but with planned investments, the daily supply could exceed 3 million barrels by 2015.

But extracting heavy oil from tar sands and transporting it by pipeline for refining is a difficult and costly process, says Perry:

  • Producers are developing new drilling techniques to reduce the large volumes of natural gas and water needed to separate the oil from sand.
  • And the oil companies, which have pledged to reduce greenhouse emissions in their operations, are making the needed investments to meet environmental regulations.

Yet the greenhouse gas issue overshadows all other considerations.  The challenge is how to produce and refine enough oil to meet rising energy demand while mitigating carbon-dioxide emissions.

The irony is that countries with fast-growing economies like those in China, Brazil and India are accelerating energy resource development, while resource-rich North America is becoming captive to environmental extremism and continues to restrict access to oil supplies.

This situation points to an inescapable imperative, says Perry: Congress needs to address the matter and it should take action to ensure the civilian and military use of Canadian tar sands oil.  Our economic and national security depends on it.

Source: Mark J. Perry, "The United States Should Clear a Path for this Source of Energy," Star Telegram, April 1, 2008.


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