Canadian oil sands and Midwest prosperity

By The Madison County Record | Jul 15, 2009

To the editor:

The vast resources of the Canadian oil sands will play a crucial role in enhancing our nation's energy security. Together with western U.S. oil shale and crude oil and natural gas resources off the shores of the U.S. and onshore Alaska, these North American supplies can serve as the bridge to a future economy powered by alternative energy sources.

Oil and natural gas company investments to develop, transport and refine Canada's enormous oil sands resources are important to increase supply flexibility and North America's energy security and reliability, while reducing the risk of supply disruptions. Critical refining investments will increase fuel supplies for key regions like the Midwest.

Investments in pipelines and refineries tied to oil sands are producing thousands of well-paying American jobs, contributing additional tax revenues, and helping secure energy supplies. By getting more of their oil from Canada, Midwest refineries would move from being at the back of the crude oil supply line to the front.

Additionally, with a secure, nearby source of crude oil, Midwest refineries would not be as vulnerable to supply disruptions caused by geopolitical upheaval or storms in the Gulf of Mexico.

Illinois leads the Midwest in crude oil refining capacity with four refineries: two located near Chicago; one in the Illinois suburbs of St. Louis, and one in Robinson, near the Indiana border. Until about 1970, Illinois was among the top oil-producing states, but today crude oil production is minor; Illinois refineries rely on crude oil received mostly from Canada and the U.S. Gulf Coast.

Illinois is also an important transportation hub for crude oil moving throughout North America, as several major crude oil pipeline systems terminate in the state.

A recent study by the Council on Foreign Relations highlighted the value of close ties with a friendly neighboring country that does a considerable amount of business with the United States, stating that "a greater fraction of money used to buy Canadian oil will likely later be spent directly on U.S. goods and services and hence contribute directly to U.S. growth."

Some have been critical of the environmental impact of using Canadian oil sands as part of our energy solution. However, Cambridge Energy Research Associates (CERA) found that the environmental concerns about Canadian oil sands may be overstated, and that the "well to wheels" greenhouse gas emissions from oil sands are comparable with other sources of crude oil.

It also notes that up to 37 percent of U.S. oil imports could come from crude derived from Canadian oil sands by 2035, and that technological advances in the Canadian oil sands has allowed Canada to become the world's second largest holder of recoverable oil reserves, behind only Saudi Arabia.

Further, the Canadian government stated that the average greenhouse gas emissions per barrel in the oil sands industry has decreased 38 percent since 1990 due to technology advancements.

It would be difficult to think of a better partner in our energy security efforts than our friendly, stable neighbor to the North.

Canada sends more than 99 percent of its oil exports to the United States. In 2008, that amounted to two billion barrels per day. Half of the crude oil imported is from oil sands. As the top supplier of oil to the United States, Canada will be a major player in the energy and economic transformation in the years to come.

Joe Calomino
State Director, Americans for Prosperity

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