When talking about U.S. oil imports, attention inevitably turns to the Middle East. And why not? Of the top 15 oil producers in 2009, six nations were in the Middle East or North Africa, including Saudi Arabia, the world’s second largest producer, and Iran, the fourth.
By the way, number one was Russia, and the U.S. was number three.
But from where do U.S. oil imports come? The top two sources are Canada and Mexico, followed by Saudi Arabia, Venezuela and Nigeria. That’s right, just one nation among the top five that export oil to the U.S. is in the Middle East. In fact, our oil imports from Canada not only are nearly double the level of imports from Saudi Arabia, but we import more oil from Canada than from all Persian Gulf nations.
While oil is priced in a global market, if concerned about the stability of where the U.S. gets its oil, then it should be very good news that our neighbor to the north is our number one source.
The news gets better considering investments that TransCanada is looking to make in its Keystone pipeline.
The Keystone pipeline reaches from Alberta, Canada, to Cushing, Oklahoma. The proposed next phase of the pipeline would extend to Port Arthur, Texas, on the Gulf Coast. According to various reports, the system’s capacity would be boosted from 590,000 barrels of oil per day to 1.1 million.
The American Petroleum Institute (API) noted: “TransCanada estimates that this project will create 13,000 organized labor jobs and hundreds of thousands of additional jobs… More than 342,000 new U.S. jobs are likely to be created between 2011 and 2015 because of Canadian oil sands development, according to a study by the Canadian Energy Research Institute.”
Investment, jobs and energy from a reliable friend – that’s a win-win-win. It certainly would be a plus for U.S. entrepreneurs, small businesses and consumers who need affordable, reliable energy to run their enterprises and homes.
Of course, though, various environmental activists, along with their political allies, oppose the project.
Extending the pipeline was projected to cost $12 billion, though that was recently increased to $13 billion given the U.S. regulatory delays.
This is a serious test for the Obama administration, specifically, the State Department. Will clear U.S. benefits in terms of boosting the supply of reliable energy win out, or will it fall to the wishes of special interests that oppose any and all efforts to expand the supply of fossil-fuel-based energy?
By the way, as questions swirl and the U.S. delays, The Wall Street Journal reported on February 4, “If the U.S. keeps blocking attempts to ship Canadian crude southward, Canada will supply China through a West Coast pipeline instead, analysts say.”
Let’s hope the Obama administration gets this one right. A decision is expected from the State Department before mid-year.
Posted by: Raymond J. Keating, Chief Economist, Small Business & Entrepreneurship Council.
2 comments:
Your points are well taken. However, there is a time line by which your suggestions and others require massive implementation to curtail imported oil usage. Here’s why.
In President Obama's Blueprint for a Secure Energy Future (March 2011), he recommended expanded drilling and development of one million electrically powered vehicles to maintain reasonable gasoline prices. That will not achieve stable gasoline prices because United States oil reserves are declining, new reserves are uncertain and one million electric vehicles is a small percentage of the total vehicle fleet (i.e., 137 million passenger vehicles).
Gasoline prices are likely to increase because the United States is now importing nearly 60 percent of its crude oil needs. In 11 years that figure will rise to 100 percent without a combination of large-scale conversion to a new engine technology, massive oil discoveries, wide spread use of public transportation or a significant decline in oil consumption due to an economic depression. This situation was totally ignored by President Obama and if not recognized and corrected by realistic, publicly supported planning, it will lead to:
• U.S. economy and trade balance will become far worse than it is now
• OPEC will exert even more influence over U.S. policy
• U.S. transportation and manufacturing will be at risk
Dr. Jeffrey Everson
www.JHEversonConsulting.com
jeff@JHEversonConsulting.com
I read your whole post you provide us some great info like Oil Sands in Canada and the U.S. Petroleum Imports thanks for sharing keep it up!!!
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