OIL IMPORTS ON THE RISE
Hit highest mark since 2012
Canadian oil imports surged to their highest levels in four years in 2016 as a combination of primarily American and OPEC barrels sailed into Eastern Canadian refineries.
The National Energy Board released data Tuesday showing Canada imported 759,000 barrels of oil per day in 2016, which is the highest level of oil imports received by the country since 2012.
The data show more than half of those barrels came from the United States, whose oil industry has gone through a renaissance in recent years thanks to the widespread use of fracking technologies.
But a third of the imports also came from OPEC member countries including Saudi Arabia, Algeria, Nigeria and the United Arab Emirates.
While U.S. barrels still make up more than half — 54 per cent — of all Canadian oil imports, NEB chief economist Shelley Milutinovic said that American imports have begun to fall and have been replaced with oil from other sources.
“We did see a decline in 2016, they dropped by around 60,000 barrels per day, that was more than offset by imports from other countries,” she said.
Algeria, in particular, sent 113 per cent more oil to Canada between 2015 and 2016 — boosting shipments from an average of 39,000 bpd in 2015 to 84,000 bpd last year — as American suppliers shipped their barrels elsewhere. Nigerian oil imports also rose 80 per cent year over year to 73,700 bpd in 2016.
Similarly, Saudi Arabia has increased oil shipments to Canada from 73,000 bpd in 2014, to 84,000 bpd in 2015 and close to 87,000 bpd in 2016.
OPEC supplied just under 33 per cent of oil to Canada last year, from around 26 per cent in 2015, NEB data shows.
Refineries in Eastern Canada process those barrels of overseas crude, while western Canadian oil imports are comprised primarily of a thinning agent used to dilute oilsands crude called diluent or condensate.
Milutinovic attributed the decrease in crude oil imports from the U.S. to that country’s decision in December 2015 to lift a decades-old ban on oil exports. Oil exports to Canada had been allowed under the North American Free Trade Agreement but now, Milutinovic said, American oil producers have more export options.
The NEB economist expects oil import volumes to remain relatively consistent over the next several years, unless oil producers in Western Canada send more of their crude eastward on rail cars.
Transcanada Corp. has proposed a $15.7-billion, 1.1-millionbpd pipeline called Energy East between Alberta and New Brunswick to boost Canadian oil exports and eliminate the need for foreign oil imports, but that pipeline is waiting for regulatory approval and isn’t expected to be in service until 2021 at the earliest.
However, University of Calgary economics professor Trevor Tombe said Energy East won’t necessarily displace all of those imported barrels in Eastern Canada.
“The refineries in the East may choose to make the investment to upgrade their equipment to process heavier oil but it’s a business decision — it may make sense or it may not,” Tombe said.
“It may be that the bulk of the oil on Energy East may be exported abroad.”
We did see a decline in 2016 ... that was more than offset by imports from other countries.