Released May 19, 2022 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--With OPEC producers accounting for only a fraction of total U.S. imports, the provincial leader of oil-rich Alberta, Canada, said he was curious why Washington D.C. is not leaning on its northern neighbor for energy security.
The U.S. Senate Energy Committee hosted ministers from Alberta to discuss the mood in the room following the Russian military invasion of Ukraine in late February.
Russia is a world leader in crude oil and natural gas production, as well as exports of refined petroleum products. Some of those products are necessary to make consumer staples such as motor gasoline.
Nearly three months into the conflict, Russia has become something of an international rogue. Many of its long-standing energy consumers have flocked to the exits to avoid getting caught with untradeable or sanctionable goods.
Neither Canada nor the U.S. were major importers of Russian crude oil, though the U.S. was a regular importer of refined petroleum products before Washington imposed a ban in the wake of the invasion.
It is Canada, meanwhile, that is the leading crude oil exporter to the U.S. by far. For the week ending May 6, Canada sent an average of 3.3 million barrels of oil per day (BBL/d) across the border. The No. 2 exporter, Mexico, sent only around 693,000 BBL/d by comparison. Saudi Arabia was a distant third with about 300,000 BBL/d in crude oil exports.
Click on the image at right for a U.S. Energy Information Administration (EIA) chart showing U.S. imports from Canada of crude oil and petroleum products.
Alberta Premier Jason Kenney testified that he was therefore perplexed about U.S. President Joe Biden's frequent pleas to OPEC to open the spigot to arrest the inflationary pressures from the higher-for-longer outlook for crude oil prices.
Click on the image at right for an EIA chart showing U.S. imports from OPEC countries of crude oil and petroleum products.
"If you remember one fact from today's hearing, I hope it's this: The province of Alberta is the largest source of U.S. energy imports, by far," Kenney said. "U.S. energy security depends on Alberta."
Energy security has become a top policy concern for many economies in the wake of the Russian invasion of Ukraine. In the U.S., a top crude oil and natural gas producer in its own right, calls to enhance energy security have run parallel to calls for energy independence.
The issue is highly politicized and highly partisan. Leaders on the right in the Republican party joined Kenney in blaming Biden for misguided energy policies.
U.S. Senator John Barrasso (R-Wyoming), pointed to an op-ed in the Wall Street Journal that said Biden was "dancing" with Venezuelan President Nicolas Maduro in his effort to compensate for the loss of Russian oil.
"Funding despots isn't in the national interest," Barrasso said.
The right wing of U.S. politics has a very short memory, however. Former U.S. President Donald Trump cozied up to OPEC members and Russia when a price war caused crude oil prices to plummet, threatening jobs in the U.S. oil patch.
Despite human rights concerns and the links to the slaying of Washington Post columnist Jamal Khashoggi, Trump said that Saudi Arabia was "very responsive to my requests to keeping oil prices at reasonable levels."
Trump was impeached, meanwhile, after congressional leaders alleged he obstructed justice in a probe into Russian meddling in U.S. elections. Trump was impeached again for allegedly inciting an insurrection against his own government.
That makes the criticism of Biden a bit ironic. Jobs in the oil patch, meanwhile, are rising along with crude oil prices. Rig counts and production are also accelerating.
For the Democrats, meanwhile, the theme was something of the same, though the messaging came from the committee chairman, Senator Joe Manchin (D-West Virginia), who has been something of a thorn in the side of his own party by standing in the way of several of Biden's initiatives.
Even though Manchin would advocate for more cross-border pipelines, such as the Keystone XL artery, he sought to tamp down his partisan rhetoric when addressing North American energy.
"I'm not holding this hearing to re-litigate the past," he said. "We are here to advance a stronger and cleaner U.S.-Canada energy partnership for the future."
Biden, nevertheless, has waffled on his energy policy. At times, he's been pressing hard for greater momentum in the energy transition. Other times, he's called on OPEC to pump more, while at the same time delaying leases for the right to drill offshore.
Canada, for its part, is essentially land-locked in North America without the pipelines needed to facilitate more crude oil exports, so Kenney's argument makes sense. Canada's only real export option for crude is the U.S. The possible expansion of the TransMountain crude oil pipeline network, however, would see more Canadian barrels go to Asian economies rather than its southern neighbor.
Regardless, the Russian military invasion of Ukraine was the catalyst for the synthesis of a new world order of sorts. No matter the blame, economies of scale will need to take a hard look at what energy security means in a changing, yet still globalized, energy sphere.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
The U.S. Senate Energy Committee hosted ministers from Alberta to discuss the mood in the room following the Russian military invasion of Ukraine in late February.
Russia is a world leader in crude oil and natural gas production, as well as exports of refined petroleum products. Some of those products are necessary to make consumer staples such as motor gasoline.
Nearly three months into the conflict, Russia has become something of an international rogue. Many of its long-standing energy consumers have flocked to the exits to avoid getting caught with untradeable or sanctionable goods.
Neither Canada nor the U.S. were major importers of Russian crude oil, though the U.S. was a regular importer of refined petroleum products before Washington imposed a ban in the wake of the invasion.
It is Canada, meanwhile, that is the leading crude oil exporter to the U.S. by far. For the week ending May 6, Canada sent an average of 3.3 million barrels of oil per day (BBL/d) across the border. The No. 2 exporter, Mexico, sent only around 693,000 BBL/d by comparison. Saudi Arabia was a distant third with about 300,000 BBL/d in crude oil exports.
Alberta Premier Jason Kenney testified that he was therefore perplexed about U.S. President Joe Biden's frequent pleas to OPEC to open the spigot to arrest the inflationary pressures from the higher-for-longer outlook for crude oil prices.
"If you remember one fact from today's hearing, I hope it's this: The province of Alberta is the largest source of U.S. energy imports, by far," Kenney said. "U.S. energy security depends on Alberta."
Energy security has become a top policy concern for many economies in the wake of the Russian invasion of Ukraine. In the U.S., a top crude oil and natural gas producer in its own right, calls to enhance energy security have run parallel to calls for energy independence.
The issue is highly politicized and highly partisan. Leaders on the right in the Republican party joined Kenney in blaming Biden for misguided energy policies.
U.S. Senator John Barrasso (R-Wyoming), pointed to an op-ed in the Wall Street Journal that said Biden was "dancing" with Venezuelan President Nicolas Maduro in his effort to compensate for the loss of Russian oil.
"Funding despots isn't in the national interest," Barrasso said.
The right wing of U.S. politics has a very short memory, however. Former U.S. President Donald Trump cozied up to OPEC members and Russia when a price war caused crude oil prices to plummet, threatening jobs in the U.S. oil patch.
Despite human rights concerns and the links to the slaying of Washington Post columnist Jamal Khashoggi, Trump said that Saudi Arabia was "very responsive to my requests to keeping oil prices at reasonable levels."
Trump was impeached, meanwhile, after congressional leaders alleged he obstructed justice in a probe into Russian meddling in U.S. elections. Trump was impeached again for allegedly inciting an insurrection against his own government.
That makes the criticism of Biden a bit ironic. Jobs in the oil patch, meanwhile, are rising along with crude oil prices. Rig counts and production are also accelerating.
For the Democrats, meanwhile, the theme was something of the same, though the messaging came from the committee chairman, Senator Joe Manchin (D-West Virginia), who has been something of a thorn in the side of his own party by standing in the way of several of Biden's initiatives.
Even though Manchin would advocate for more cross-border pipelines, such as the Keystone XL artery, he sought to tamp down his partisan rhetoric when addressing North American energy.
"I'm not holding this hearing to re-litigate the past," he said. "We are here to advance a stronger and cleaner U.S.-Canada energy partnership for the future."
Biden, nevertheless, has waffled on his energy policy. At times, he's been pressing hard for greater momentum in the energy transition. Other times, he's called on OPEC to pump more, while at the same time delaying leases for the right to drill offshore.
Canada, for its part, is essentially land-locked in North America without the pipelines needed to facilitate more crude oil exports, so Kenney's argument makes sense. Canada's only real export option for crude is the U.S. The possible expansion of the TransMountain crude oil pipeline network, however, would see more Canadian barrels go to Asian economies rather than its southern neighbor.
Regardless, the Russian military invasion of Ukraine was the catalyst for the synthesis of a new world order of sorts. No matter the blame, economies of scale will need to take a hard look at what energy security means in a changing, yet still globalized, energy sphere.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
