Rhetoric VS. Reality
Policy-makers are talking a lot about energy and energy policy. What follows are some of the most frequently heard claims and proposals, along with realities that need to be considered when evaluating these claims.
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Canadian Oil Sands
Canadian oil sands are a major source of energy to meet America's growing energy demands. Many Americans do not realize the United States already imports more oil from Canada than from any other country. Our North American neighbor currently supplies 21 percent of our imported oil, half of which comes from the oil sands of Canada.
Here are some of the most frequently asked questions and answers about Canadian oil sands:
What are oil sands and how are they used? Oil sands are naturally occurring mixtures of sand, clay, water and a form of petroleum called bitumen—which can be upgraded for synthetic crude oil and refined to make asphalt, gasoline, jet fuel and some chemicals.
How abundant are Canada’s oil reserves, and what portion do oil sands constitute? Canadian oil reserves are vast and are second only to Saudi Arabia, using current technological assessments. According to the Canadian Association of Petroleum Producers, oil sands now account for more than half of western Canada’s total oil production. By 2025, production from Canadian oil sands is expected to rise from about 1.3 million barrels per day to roughly 3.5 million barrels per day.
Why is Canadian oil important to the United States? Canada and the United States have an excellent trading and political relationship. Canada’s reliable and plentiful oil is crucial to improving our nation’s energy security and meeting its growing energy demand.
The economic effect of Canadian oil sands development is a boost to the economy. It is expected to create more than 340,000 new American jobs between 2011 and 2025.
How much of its oil does Canada export to the United States? Canada sends more than 99 percent of its oil exports to the United States—the bulk of which goes to Midwestern refineries. By getting more of their oil from Canada, Midwest refineries would move from the back of the crude oil supply line to the front—making them less vulnerable to supply disruptions caused by geopolitical upheaval or storms in the Gulf of Mexico.
How do oil sands factor into the American energy mix? According to the Energy Information Administration (EIA), a dvision within the Department of Energy, Canada is the top supplier of imported oil and natural gas to the United States. Of the Canadian crude oil brought into this country, approximately half is derived from oil sands. A May 2009 report by Cambridge Energy Research Associates, concluded if oil sands development is maximized, the amount of oil the Unites States imports from Canada could potentially double by 2035.
Are there economic benefits associated with producing crude derived from Canadian oil sands? A study commissioned by the American Petroleum Institute (API) and conducted by the Canadian Energy Research Institute, "Canada's Oil Sands and Economic Impact on the United States' Economy," says greater production of Canada's oil sands is expected to stimulate economic activity in both countries, creating more than 340,000 new jobs in our country. alone.
As oil sands production and investment rises, the demand for American goods and services also increases, adding an estimated $34 billion to the Gross Domestic Product (GDP) in 2015 and $42.2 billion by 2025.
The benefits of oil sands development do not fall to only one industry or any one region in the country but are broadly shared across many industrial sectors and regions. Millions of dollars are being invested to build new pipelines and expand refineries to transport and process Canadian oil.
Are there environmental concerns regarding the use of crude derived from oil sands? The extraction and processing of oil sands do, on average, result in higher greenhouse gas (GHG) emissions than light, sweet (low-sulfur) crude oil. But so do many of the heavy, high-sulfur crudes being produced in the United States and around the world. On a life cycle GHG emission basis (e.g.,process from the oil well to the gas tank), oil derived from Canadian oil sands is comparable with other crudes refined in the United States. We believe the United States is equipped to manage the emissions from crude derived from oil sands with greater care than if it were processed in regions of the world with less stringent environmental standards— not to mention the environmental costs of transporting the crude elsewhere.
What steps are being taken to limit the environmental impact of the practice? The oil and natural gas industry remains committed providing the energy our nation needs to power its economy in a reliable and environmentally-responsible manner. To this end, the oil and gas industry has invested $58 billion, which is 44 percent of all low and zero carbon technology investments, in America, between 2000 and 2008. This is more than the federal government or all other industries combined.
Does the use of oil sands affect the quality of the refined product? Using oil sands as a feedstock does not affect the quality of the refined products. In fact, gasoline and other fuels made from oil sands already are being used in the United States. Every project is required to adhere to applicable federal, state and local regulations and permitting conditions. And the vast investments refiners and pipeline operators are making to increase capacity and flexibility to process oil sands includes the equipment necessary to make products that meet all required specifications.
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