NCPA - National Center for Policy Analysis

Canada Has Plenty of Oil, but Does the United States Want It?

July 11, 2011

In a 21st-century oil boom, the sparsely populated Canadian province of Alberta has become one of the world's newest petroleum powerhouses.  Foreign investors are piling in, and Alberta plans to double production over the next decade.  The problem is that the United States -- the biggest consumer of the province's petroleum -- may not want the additional oil, says the Wall Street Journal

  • Most of Alberta's 1.5 million barrels of daily exports are extracted from oil sands, or bitumen.
  • Turning this tar-like substance into oil is an energy-intensive process that generates lots of carbon dioxide, a gas suspected by some to contribute to global warming.
  • Almost all the oil produced ends up in the United States, where environmentalists and some powerful Democrats have lined up against importing any more of the stuff.

The oil-sands debate comes at a time when gasoline prices have soared in the United States, and there is a growing focus on energy security.  

  • A recent study of global oil balances by London-based think tank Chatham House estimates that North America's dependence on foreign-energy sources should fall over the next 20 years, despite growing consumption.
  • But that assumes oil-sands output continues to feed U.S. markets.
  • Indeed, U.S. energy security will hinge increasingly on "unconventional" sources of petroleum -- oil sands is one.

Last month, the Environmental Protection Agency said the State Department's environmental assessment still wasn't thorough enough, threatening more delays and further exasperating Alberta officials and oil executives.

Industry executives and lobbyists are sending a message: If the United States doesn't want Alberta's oil, Asia -- in particular, China -- will buy it.

Source: Chip Cummins and Edward Welsch, "Canada Has Plenty of Oil, but Does the U.S. Want It?" Wall Street Journal, July 8, 2011.

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