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Harming our Canadian Friends

September 22, 2015

The United States imported 0.79 million barrels of oil per day (mmb/d) from Venezuela in 2014, while creating policies that make it difficult to import oil from Canada.

Oil imports from Venezuela peaked in 1997 at 1.4 mmb/d.

Map of Venezuela showing oil sands location

Map of Venezuela showing oil sands location

U.S. heavy oil imports from Canada were partially responsible for the decline, while internal and political events in Venezuela, including declining production of light crude and Naphtha used as a diluent for heavy crude, also had an effect on Venezuelan oil production and exports.

Heavy crude oil, defined as having an API of less than 21 degrees, amounted to 30% of total U.S. crude imports in 2014, with Canada representing approximately one-third of heavy crude imports and Venezuela approximately 25%.

Ownership of U.S refineries, including Venezuela’s ownership of CITGO and partial ownership of various other refineries, with partners such as Valero and Phillips, complicates the political implications of Venezuelan oil imports.

The major objection to importing Canadian crude produced from tar sands is that its production results in increased CO2 emissions. Factually, the exact same problem exists with Venezuelan crude that largely comes from the Orinoco heavy crude oil sands deposits.

There is no logic behind condemning Canadian crude while allowing Venezuelan crude to be imported.

Extreme environmentalists claim that Canadian crude will merely be exported by the United States as refined products.

While this may be true, it means jobs and income for U.S. companies, so why would anyone object to more jobs, plus income for American share holders unless the motivation was ideological?

Canada is a friend of the United States, while Venezuela has been an implacable enemy over the past several decades.

Blocking the Keystone pipeline hurts Canada, our friend, while importing crude from Venezuela benefits a country that has done all it could to hurt our other friends in Central and South America.

Canada relies heavily on developing and exporting its crude oil. If it can’t export its crude oil to the United States, it must export it to other countries.

To increase exports to other countries, Canada must build pipelines from Alberta to the West coast, such as to Vancouver or Kitimat, and to Canadian east coast refineries.

But again, extreme environmentalists, with support from American environmentalists, are trying to thwart the development of these Canadian pipelines to prevent Canada from increasing its crude oil production.

The motivation, once again, is ideological, and intended to prevent CO2 emissions.

The efforts to stymie Canadian crude oil production has a negative economic impact on Canadians.

Making it difficult for Canada to sell its crude oil means Canada receives less per barrel for its oil than it would otherwise receive, either on the world market or when exporting it to the United States.

When selling to the world market, its oil is sold at a discount to Brent, and when exported to the United States, it is sold at a discount to WTI.

The policies of the Obama administration harms Canadians, while allowing Venezuela to continue to export oil to the United States and pursue actions in direct conflict with American interests in Central and South America.

Replacing imports of heavy crude oil from Venezuela with imports from Canada is in America’s best interests.


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8 Comments leave one →
  1. Kenn Latzer permalink
    September 22, 2015 9:34 am

    Great article, thanks, kenn

    Sent from my iPad


  2. September 23, 2015 8:30 am

    Good article, just need to correct the math, numbers USA imports 9 million barrels per day

    • September 23, 2015 9:00 am

      By misplacing the decimal point, I was careless expressing the amount of oil imported from Venezuela. I appreciate your bringing it to my attention. The source for the percentages of heavy crude is the University of Texas at Austin, Jackson School of Geosciences. The data has been corrected.

  3. Catcracking permalink
    September 23, 2015 4:43 pm

    Good article. The policy makes as much sense as everything else coming out of the Administration. Hillary just came out against the Keystone pipeline indicating it is a distraction.

  4. Scott Becker permalink
    November 10, 2015 1:32 pm

    Appreciated the read Kenn. Not a surprise, but it was definitely a disappointment to hear Obama say ‘NO’ to Keystone last week. I don’t pretend to understand the logic or reasoning from the Obama admin, nor the environmentalists who seem to never stop and think about the benefits from crude oil that they enjoy from the moment they are woken up by an alarm, to the second they turn their lights off for the night.


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