On Monday U.S. President Trump tweeted that “OIL (ENERGY) IS BACK!!!!” He’s right: oil is no longer being given away for free. Benchmark prices have clawed their way above US$30-a-barrel for the first time since early April. But few would be convinced that THE NORTH AMERICAN OIL INDUSTRY IS BACK!!!!
The devastating effects of the pandemic — forced production shut-ins could put Canada and the United States on a regressive path toward dependency on “foreign oil,” a historically disparaging term.
Let’s flip the calendar back to 2008 or so. The United States had sent about 150,000 troops to Iraq, where the post-Saddam-Hussein war was still raging. America was “addicted to oil” as President George W. Bush had proclaimed. At the high point of U.S. dependency, in 2008, about two-thirds of that addiction was fed by imported oil. Excessive dependency on foreign oil was also costly.
A dozen years ago, oil prices averaged US$100 per barrel. Daily foreign imports of 12.9 million barrels of crude oil and petroleum products were costing the country close to US$500 billion a year, a transfer of wealth that foreign petro–states were happy to ring into their treasuries.
Then came one of the fastest and largest energy transitions in history: The North American shift to shale gas, tight oils and oilsands. The combined U.S.-Canadian supply growth of 10 million barrels per day, all in the span of a decade, pushed foreign oil out of the continent faster than a virus in a night club.