Canadian oil is better for the U.S. than oil from OPEC+
OPEC+ nations like Saudi Arabia, Russia and Iran are making decisions that affect Americans while the U.S. shuts out oil from its closest neighbor and ally.
After cancelling the Keystone XL pipeline from Canada on his first day in office, this summer President Joe Biden pleaded for OPEC+ to increase oil supply to lower prices for Americans at the pump.
“[OPEC+] oil largely comes from areas that do not like the U.S.,” says Phil Skolnick, New York-based analyst with Eight Capital.
That increases risk for American consumers.
“We’ve ceded more control to OPEC, and Saudi Arabia and Russia, than people would have expected or hoped for,” says Dan Tsubouchi, chief market strategist with equity firm SAF Group.
The U.S. needs Canadian oil
U.S. domestic oil production surged over the last decade, and at the same time so did imports from Canada.
Renewable energy sources are growing, but oil and gas will continue to be critical for the foreseeable future.
The U.S. is expected to consume 18.5 million barrels per day of petroleum and other liquids in 2050, a 10 per cent increase from 2021, according to EIA data.
Refiners have spent billions to be able to process more “heavy oil” like what is primarily produced in Canada, according to IHS Markit.
Ahead of the curve
The decision to cancel a major pipeline from Canada in favor of OPEC+ ignores the progress Canada’s oil producers have made addressing greenhouse gas emissions.
Work has “materially outpaced” global oil majors, analysts with BMO Capital Markets said.
Average oil sands emissions per barrel decreased by about 27 per cent since 2013 compared to a decrease of just 13 per cent by other major global oil producers.
Several oil sands projects now have a GHG footprint that is lower than the global average, and major producers have jointly committed to reach net-zero emissions by 2050.
Americans should look to their northern neighbor to meet oil demand, not OPEC+.
This material is distributed by Copithorne & Blakely on behalf of the Canadian Energy Centre pursuant to the Foreign Agents Registration Act (FARA).
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