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North Carolina Senator Kay Hagan Makes Case for Increasing Canadian Oil Imports
September 21, 2010 10:42 AM
THERE'S OIL IN THEM THAR SANDS
The State Department is in the process of reviewing a $7 billion expansion of a TransCanada pipeline that would double the amount of oil flowing from Canada to the US.
Senator Kay Hagan of North Carolina makes the case for increasing Canadian oil imports on the basis of national security concerns.
“We need to be buying more oil from Canada,” she said while on a tour of oil sands production facilities in Alberta.
Cathy Landry, a spokeswoman for the American Petroleum Institute, agrees. As she told Minyanville, “Canada is America’s number-one supplier of imported oil and natural gas. We are going to continue to need Canadian oil. It’s reliable, it’s plentiful, and can help meet our growing oil demand, while helping to make the US more secure, as Canada is such a strong ally, so close, and such an important and reliable trading partner.”
Established bitumen reserves in Alberta are estimated at 169.9 billion barrels, and have enticed companies including Suncor Energy, Canadian Natural Resources Ltd., and Imperial Oil Ltd. (majority owned by ExxonMobil) to give the oil sands a go.
In an interview with Minyanville, Don Thompson, president of Fort McMurray, Alberta’s Oil Sands Developers Group, said, “I believe that in and of themselves, the oil sands are well-managed and well-regulated. We were attractive prior to the Gulf spill. But we believe we should earn our social license to operate based upon our own performance rather than from the misfortunes of others.”
Looking at the numbers, the oil sands, which make up the world's second-largest oil reserves, after Saudi Arabia's, seem to have more than earned their social licenses to operate.
“People get upset about process-affected water in tailing ponds,” Thompson pointed out. “But this is specifically what tailing ponds are designed for -- to separate this water for the sake of the environment. The first tailing pond in the oil sands industry has been decommissioned and will be reclaimed by the end of this year.”
Thompson also noted that oil sands provide for 70% of Canada’s oil requirements while using less than 1% of the mean annual flow of the Athabasca River for that production and that “independent benchmarking studies have shown the carbon footprint of fully upgraded oil sands crude amounts to less than that of California thermal crude which makes up some 40% of California’s crude oil production."
While there’s no such thing as a perfect solution to anything as complex as oil production and energy security, Scotty Greenwood, executive director of the Canadian-American Business Council, said at a North American energy security summit in Washington, DC, last month, "I don't think anybody is suggesting Canada resources are completely without risk. It's just different. If you had a catastrophic event with oil from a pipeline, there is zero chance it would end up in the Florida Keys."
No positions in stocks mentioned.
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