Froma Harrop couldn’t be more wrong about Keystone XL, Alberta oil sands

Canada supplies 45% of American crude oil imports, forecast to increase in coming decades, even without Keystone XL

Yesterday I wrote about how climate activist opposition to Keystone XL was part of a larger campaign to destroy the social license of fossil fuels. Right on cue, American syndicated columnist Froma Harrop proved my point.

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Froma Harrop, syndicated columnist. Photo: Express News.

Her Nov. 11 column she doesn’t think much of the Alberta oil sands or the Keystone XL pipeline proposal. Nor does she know much about them.

Harrop’s piece is riddled with errors, misunderstandings, and the language of the climate activists.

But her basic premise – that fracking has significantly reduced the need for Canadian oil – is the most flawed of all.

American Energy News published a story today about how Canadian oil – about 70 per cent of it is Alberta oil sands “goop,” as Harrop calls it – has been steadily increasing since about the same time as American shale producers started fracking, the early 2000s.

Canada now accounts for 45 per cent of American crude oil imports, three times the amount imported from all of the Persian Gulf countries combined, according to the US Energy Information Administration.

And the EIA predicts Canadian imports will continue increasing in coming years.

Why? Because even though Canada currently supplies 65 per cent of the crude oil consumed by the Midwest (mostly Ohio and Illinois), Texas Gulf Coast refineries require 2.7 million barrels a day of the kind of heavy oil produced in northern Alberta.

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President Barack Obama during a recent tour of Alaska.

And Canada only supplies about 10 per cent of that requirement.

At the same time, traditional supplier Venezuela is redirecting more of its heavy crude to China and Mexican heavy crude production is declining.

Canada is the logical supplier to step into the breach and the Keystone XL pipeline was the logical method of transporting it.

Harrop makes the typical activist mistake of assuming that Canadian oil will now stop at the 49th Parallel: “Many of the project’s backers have argued that pipeline or no, Canada will still extract and sell the environmentally damaging tar sands oil, so why stand in the way? Well, with the price of oil so low and the cost of moving it higher by rail than by pipeline, it’s become increasingly likely that the oil will stay in the ground — where it belongs.”

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Oil by rail train becoming more and more commonplace on American railways.

Not the case, as the EIA forecast mentioned above demonstrates. And to hammer home that point, American Energy News ran a story Nov. 10 about USD Terminals Canada’s plans to double the oil by rail capacity at its Hardisty, Alberta facility.

Canadian oil sands production is forecast to double in the next few decades. If Canada is successful in building pipelines to the West Coast (highly doubtful at the moment) or markets and tidewater in Eastern Canada (the process is just starting amidst heavy opposition) then that heavy crude may find other markets, such as Asia.

But the more likely destination is Texas Gulf Coast refineries. And as the Canadian Association of Petroleum Producers recently argued, the crude oil will get to market one way or another, probably via oil by rail similar to the unit trains of USD Terminals.

Thus far, environmentalists have not stopped one drop from crossing the Canadian-American border.

Climate activists – and their sympathizers, like Froma Harrop – should expect that trend to continue, despite any erosion of the social license for fossil fuels. Americans like to drive their SUVs and pick ups, and the US only produces half the oil it consumes.

Unless something catastrophic happens, Americans will continue to buy the crude oil they need from their oldest friends and closest allies, the Canadians.

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