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Since the middle of the last century, the United States has been a net importer of oil (and not many years ago, it imported about two-thirds of its yearly consumption). The assumption of continued U.S. dependence on “foreign” oil provided one foundation stone for future Canadian prosperity. Canada, a self-described “energy superpower,” would always be able to send ever-larger quantities of oil to slake our neighbour’s insatiable thirst.
But what if the U.S. becomes an oil exporter, no longer needing anyone else’s oil? The change – or threat, if you prefer – for Canada would be immense. Indeed, it’s not too far-fetched to say that all the assumptions on which Canada has based its fossil-fuel industries can no longer be taken as axiomatically correct.
For the bitumen oil in Alberta, the future could be particularly murky. The oil resources there are immense, but finding markets for that oil might be very hard, indeed. Not only might the U.S. need less and less, but opposition to pipelines through British Columbia to ship oil to Asia is so intense that no guarantee exists they’ll be built for a very long time, if ever.
A series of developments is changing the U.S. oil picture. New, tough mileage regulations will make a big difference in the amount of gasoline consumed. As world oil prices remain high, conservation is cutting consumption rates.
Of far greater significance, new technologies and discoveries are opening up U.S. own-source oil. The Bakken oil field in the Midwest has gone from no production a decade ago to 500,000 barrels a day, with predictions that output could double. Texas fields are suddenly producing vastly higher volumes.
These and other new sources come from “tight oil” – oil previously thought unable to be recovered. New technologies (especially horizontal drilling) and fracking (blasting deep deposits beneath the water table) have opened up new possibilities for significantly higher domestic production of oil.
New possibilities for natural gas are even greater. Natural gas is now so cheap and plentiful that it will make new coal-fired energy plants almost impossible to build, and elbow aside oil in some areas such as fuel for vehicle fleets.
Daniel Yergin, author of The Quest, a compendious review of the world energy picture, suggests that perhaps as many as 20 billion barrels of recoverable tight oil exist in the U.S. Such deposits, he writes, would be the equivalent of 1½ Alaska North Slope deposits.
For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/news/opinions/opinion/what-if-the-us-becomes-an-oil-exporter/article2405637/