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Canada is increasingly dependent on imported American oil

Canada is increasingly dependent on imported American oil

(Washington) Canada is increasingly dependent on imported US oil, suggests a new report issued by the country’s Energy Regulatory Authority.

James McCarton
The Canadian Press

The United States supplied Canada with nearly four out of five barrels of imported crude in 2020, the year in which global demand for fossil fuels has been hit hard by the COVID-19 epidemic, according to the latest data from Canada’s Régie de l Energy.

About 77% of Canadian imports came from the United States, up from 72% in 2019 and only 6% in 2010, before a significant increase in domestic oil and gas production in the United States over the past decade.

Enthusiastic observers of trade flows between Canada and the United States, especially those in the energy sector, may not be surprised by the amount of US crude oil that has moved north in recent years.

The United States absorbed 96% of Canadian oil exports last year, most of it heavy crude, and more than half of it was transported to the American Midwest, which has been the starting point for pipeline disputes. For most of the past 15 years.

But the massive increase in oil and gas production in the United States, fueled in part by new extraction technologies such as hydraulic fracturing and horizontal drilling, has made it a suitable source of raw materials for US refineries. Reggie Dee referred to two states. Chief economist l’énergie Darren Christie.

“Their crude oil production has doubled over the past ten years, which is a very remarkable increase,” he said.

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While foreign oil has long been a part of Canada’s energy mix, recent numbers – along with the proportion of imports from the United States – shed surprising new light on the ongoing debate over pipeline links between the two countries.

On his first day in the Oval Office, President Joe Biden canceled the expansion of the Keystone XL pipeline, which would have transported an additional 800,000 barrels per day of bitumen from Alberta tar sands to refineries on the US Gulf Coast from Mexico.

Michigan is currently in court against Inbridge due to Governor Gretchen Whitmer’s efforts to close Line 5, a cross-border energy link that crosses the Great Lakes under the Mackinac Strait.

The pipeline is widely promoted by its advocates as an important part of the infrastructure that powers the major refineries in Sarnia, Ontario, and provides more than half of the propane needed to heat homes in Michigan alone, let alone neighboring states.

Canada pledged to vigorously defend Line 5, and Natural Resources Minister Seamus Origen insisted last month that its operation was “non-negotiable.” Ottawa has not yet decided whether it will participate in the ongoing trial.

For their part, protesters in Minnesota are trying to halt the ongoing $ 10 billion modernization of Enbridge’s Line 3, another major link in the cross-border chain that connects to Line 5 at a facility in Superior, Wis.

Dependence on American oil is particularly high in Atlantic Canada, an area of ​​the country where pipelines are often not an option. Imports to the refineries there have increased tenfold over the past decade.

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While Canada’s energy exports to the United States are more than six times imports, the interdependence between the two countries is significant, in terms of energy supply and economic impact, according to the American Petroleum Institute (API) in a report released last week. .

Over the past ten years, the value of petroleum liquids traded between the two countries has accounted for up to 20% of the total trade between Canada and the United States. The American Institute said that up to 90% of the refined oil in eastern Canada has passed through or came from the United States.

The institute noted that “the two-way trade volume is dominated by crude oil.”

“The growth in the crude oil trade was mainly driven by heavy crude oil shipped from western Canada to the American Midwest and Gulf Coast, via pipelines and railways, and light crude oil from Dakota… from northern Texas to eastern Canada by pipeline and ship. ”