May 19, 2024
The mirage of Canadian oil independence
To an important extent the kinds of crude oil Canadian refiners need and can process are not the kinds produced in Western Canada.
To an important extent the kinds of crude oil Canadian refiners need and can process are not the kinds produced in Western Canada.

A frequently heard complaint these days is that Canada should stop importing crude oil and rely on domestic production entirely to meet our needs. Public figures as disparate as Derek Burney and Elizabeth May would have us restrict or even ban crude imports in order to insulate ourselves from the risks of international trade. We have heard such calls for “energy independence” since the 1970s and since the 1970s they have been mistaken.

The average person in Canada knows very little about energy markets beyond what he or she experiences when filling up the car’s gas tank. Some facts would help the policy discussion. Canada is the fourth largest oil producer in the world, with production averaging 4.5 million barrels per day in 2018. The crude oil we produce varies considerably in quality. About 67 per cent of our production is synthetic crude oil and bitumen from the oilsands, while only 22 per cent is light and medium crude oils, and 11 per cent is heavy crude.

Canada has 16 refineries located in seven provinces, with over two-thirds of refining capacity located in Central and Eastern Canada, a long way from most of the crude oil production. Canadian refineries today process less than 30 per cent of the country’s crude oil output. The remainder is exported, almost entirely to the United States. Most Canadian refineries outside Atlantic Canada operate to meet the needs of domestic consumers, with relatively few exports of refined products. In 2017, more than half of the feedstocks that refineries used were light and medium crudes, about a third were synthetic crude oil and bitumen, and one-tenth was heavy crude. In other words, to an important extent the kinds of crude oil Canadian refiners need and can process are not the kinds produced in Western Canada.

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See Also:

(1) ‘Devastation on all fronts’ : For Canada’s oil town, severe flooding just one in a series of disasters

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