Canada: Friend or Foe?
Canada has been a good friend for over 100 years, yet, we are now about to turn Canada into an enemy.
The reason behind this turn in events is that environmentalists and this administration are trying to stop the development of oil sands (tar sands) in Canada.
They are doing this because oil from oil sands creates more CO2 than oil from conventional drilling.
Not only is this a bad reason for destroying a friendship, but it happens to be just barely the truth.
Cambridge Energy Research Associates have published an analysis of life-cycle GHG emissions, measured in kg Carbon Equivalent per Barrel of Crude, from oil from various sources. The following summarizes their analysis:
- Average US, 540 kg
- Saudi Light, 550 kg
- Mexico, 550 kg (Second largest source of US imports)
- Canadian Oil Sands from Mining, 560 kg
- Venezuela, 565 kg
- California Heavy, 585 kg
- Middle East Heavy, 590 kg
- Canadian Oil Sands from Steam Assisted (SAGD), 610 kg
It’s abundantly clear that, at worst, using SAGD, GHG emissions are only 13% greater than the U.S. average and only 4% higher than California Heavy.
Canadian Oil Sands derived from mining is lower than either Venezuelan or Californian crude.
The immediate source of friction is the withholding of a permit by the State Department that would allow Canada to build a pipeline that would carry oil to the refineries in the Gulf. TransCanada must get a permit from the State Department because the pipeline crosses the US border and TransCanada is a foreign corporation.
The State Department did an environmental impact analysis and found that the Keystone XL project would pose only “limited adverse environmental impacts.” But, environmentalists howled and the EPA rejected the analysis as incomplete.
The State Department is now conducting a new analysis.
By one report, building the pipeline would create 20,000 American jobs and produce $34 Billion in royalties that would help reduce our deficit.
Environmentalists and many in this administration would like to kill development of Canadian oil sands, but that would cause a breach in relations between the US and Canada.
The US currently imports over 2 million barrels of oil daily from Canada, and most of that is from oil sands.
Oil production from oil sands in 2010 was approximately 1.5 million barrels per day, and is projected to grow to nearly 4 million barrels per day by 2020.
Do we want to import the additional 2.5 million barrels per day from Canada, and reduce the oil imported from Venezuela and Saudi Arabia, or do we want Canada to turn to Asia and China to sell their oil?
Because Canadians are now wondering whether they can count on continued friendship with the United States, they are considering building a pipeline to Kitimat and to expand the pipeline to Vancouver.
If they expand their ability to transport oil to Canada’s west coast, the oil will most likely go to China and other Asian countries.
Loss of Canadian oil to China would hurt the United States. It would mean higher oil prices, with higher gasoline prices, and a less permanent supply. We would have to rely more heavily on Venezuela and Saudi Arabia for our oil.
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