Canada’s re­liance on oil im­ports

Coun­try’s im­port­ing of for­eign oil won’t change any time soon GUEST COL­UMN

Lethbridge Herald - - Reader's Forum - Mark Milke and Len­nie Ka­plan CANA­DIAN EN­ERGY CEN­TRE

When fore­cast­ing fu­ture oil con­sump­tion around the world, many peo­ple have opin­ions and agen­das. Fore­casts rooted in facts and tech­no­log­i­cal ca­pa­bil­i­ties are more rare.

An ex­am­ple of an in­formed opin­ion comes from Va­clav Smil, pro­fes­sor emer­i­tus of the Univer­sity of Man­i­toba’s Fac­ulty of En­vi­ron­ment.

Smil is an ex­pert in en­ergy tran­si­tions. He would pre­fer a move away from fos­sil fu­els and he ac­cepts that car­bon emis­sions con­trib­ute to global warm­ing.

How­ever, Smil’s data-based, em­pir­i­cal work, and his re­sult­ing view on a pos­si­ble tran­si­tion from such fu­els to oth­ers, was summed up in his re­cent pa­per for the Univer­sity of Saskatchew­an’s John­son Shoyama Grad­u­ate School of Public Pol­icy: “De­sign­ing hy­po­thet­i­cal roadmaps out­lin­ing com­plete elim­i­na­tion of fos­sil car­bon from the global en­ergy sup­ply by 2050 is noth­ing but an ex­er­cise in wish­ful think­ing that ig­nores fun­da­men­tal phys­i­cal re­al­i­ties.”

That con­text is crit­i­cal for Cana­di­ans. It means that the key choice is more straight­for­ward: For the next few decades at least, Cana­di­ans will con­tinue to use oil. The only ques­tion is where it will come from — do­mes­tic or for­eign sources, or both (most likely), and in what pro­por­tions.

Our guess is that most peo­ple don’t know just how much for­eign oil has been im­ported into Canada, into which prov­inces and where it orig­i­nates. While some peo­ple rhetor­i­cally “op­pose” oil — Cana­dian ex­trac­tion and con­sump­tion — the re­al­ity is that do­mes­tic oil con­sump­tion needs will be met ei­ther by Cana­di­ans or with im­ported oil.

Canada im­ported over 8.7 bil­lion bar­rels of crude oil from other coun­tries be­tween 1988 and 2019, an av­er­age of nearly 749,000 bar­rels a day over the pe­riod. Those for­eign bar­rels of oil were worth $477 bil­lion in nom­i­nal dol­lars (and $587 bil­lion in in­fla­tion-ad­justed dol­lars).

Many of the source coun­tries have changed over the decades. Ini­tially, much of the oil ar­riv­ing in Canada came from the United States, Nor­way, the United King­dom and Al­ge­ria. Those are the top four sources of for­eign oil when all three decades’ worth of oil im­ports are tal­lied up.

But be­tween 2010 and 2019, the two top sup­pli­ers alone — the United States and Saudi Ara­bia — ac­count for $100 bil­lion worth of oil im­ports ($75 bil­lion from the U.S and $25 bil­lion from Saudi Ara­bia). That ac­counted for 46 per cent of the $220 bil­lion in oil im­ports in the last decade.

Al­ge­ria and Nor­way were next with oil sales to Canada worth $17.1 bil­lion and $16.8 bil­lion, re­spec­tively, with mul­ti­ple other coun­tries sup­ply­ing the rest in smaller amounts. Rus­sia, for ex­am­ple, ex­ported $2.2 bil­lion worth of oil to Canada in the last decade.

Nar­row down oil im­ports just to 2019 and the Amer­i­cans and Saudis are even more dom­i­nant. They shipped oil worth $13.8 bil­lion and $3.1 bil­lion re­spec­tively into Canada, or 89 per cent of $19 bil­lion in to­tal oil im­ports last year.

Where did the $477 bil­lion in oil im­ports be­tween 1988 and 2019 end up?

Fully $225 bil­lion or 47 per cent flowed into Que­bec. Next was New Brunswick with $129 bil­lion or 27 per cent (ex­plained in part by a re­fin­ery in Saint John). The other prov­inces took the re­main­ing 26 per cent.

A num­ber of fac­tors ex­plain Canada’s level of crude oil im­ports, in­clud­ing the type of oil a re­fin­ery pro­cesses and on­go­ing pipe­line con­straints. Given such com­plex­i­ties and the need for open mar­kets and flex­i­bil­ity of sup­ply, it would be a mis­take to ad­vo­cate pro­tec­tion­ist mea­sures.

But where gov­ern­ments can make it eas­ier for Cana­di­ans to de­velop do­mes­tic oil sup­plies, be it in New­found­land and Labrador, Que­bec (which has re­serves), Saskatchew­an, Bri­tish Columbia or Alberta, it would be rea­son­able to do just that.

Mark Milke and Len­nie Ka­plan are with the Cana­dian En­ergy Cen­tre, an Alberta gov­ern­ment cor­po­ra­tion funded in part by taxes paid by in­dus­try on car­bon emis­sions. They are au­thors of “For­eign oil im­ports to Canada: $477 bil­lion be­tween 1988 and 2019.” Dis­trib­uted by Troy Me­dia.

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