CAMBRIDGE, Mass. (May 19,
2010) - The Canadian oil sands have increasingly become an
important source of global oil supply growth and are now poised to
become the number one source of U.S. crude oil imports in 2010,
according to new research from the IHS CERA Canadian Oil Sands
Dialogue. Oil sands imports could ultimately increase to a
range of 20 percent to 36 percent of U.S. oil and refined product
imports by 2030 from the 2009 level of 8 percent, according to the
Dialogue's first report, The Role of Canadian Oil Sands in U.S.
Oil Supply.
"The fact that oil sands by themselves-were they a country-are
set to become the largest single source of U.S. crude oil imports
this year, emphasizes the importance they have attained as a supply
source for the United States," said IHS CERA Chairman and Pulitzer
Prize-winning author of The Prize, Daniel
Yergin. "This ranking demonstrates the impact of investment
and innovation over the last decade. It also shows how integrated
Canada and the United States are in terms of energy, as in their
overall economies."
Oil sands production, combined with exports of Canadian
conventional crude oil, has already put Canada in the position of
number one foreign supplier of oil to the United States. Over the
past decade, production from oil sands more than doubled from
600,000 barrels per day (bpd) in 2000 to 1.35 million barrels per
day (mbd) in 2009, more than offsetting declines in conventional
Canadian production. But the potential is much larger and oil sands
growth could be three or four times greater than today to a range
of 3.1 mbd to 5.7 mbd by 2030, according to the report.
While oil demand in the United States is not likely to return
to its 2005 peak, the U.S. will maintain its position as the
world's largest oil market over the next two decades, the report
notes.
"The oil sands will play a key role in meeting future
world oil demand," said IHS CERA Managing Director Jim
Burkhard. "Oil will continue to play a critical role in U.S.
energy supply and the oil sands offer the possibility of increasing
oil supply security while offsetting reduced supply from some of
the United States' traditional suppliers."
In addition to their contribution to energy security, oil
sands projects constitute billions of dollars in spending, and the
economic benefits radiate far beyond the borders of Alberta,
creating jobs in both the U.S. and Canadian economies, according to
the report.
Energy trade is an important part of the overall relationship
between the United States and Canada, each of which is the other's
largest trading partner. Canada and the United States have a highly
efficient and integrated energy trade in oil, natural gas and
electric power via an interdependent network of transmission grids
and pipelines.
"The growth of oil sands production in the past decade is a
testament to Canada's open investment climate," said IHS CERA
Director, Jackie Forrest. "The oil sands are among a group of oil
development opportunities that are accessible to oil
companies-projects in which firms can openly and securely
invest."
Oil sands, like other complex oil projects, face the challenge
of high development costs, the report notes. However, a comparison
of the economics of some of the largest sources of new supply-ones
with the greatest ability to add new productive capacity over the
next 5 to 10 years-shows that numerous projects are in the same
range as oil sands.
The Role of Canadian Oil Sands in U.S. Oil Supply
identifies the environmental questions around oil sands
development.
Environmental footprint concerns related to oil sands
development include water and land use and the reclamation of
tailings-the fine silt-like waste material produced during oil
sands production. At the project level, government regulation of
oil sands activities is highly developed and is as robust as in
many other oil-producing regions in the world, the report finds.
However, high growth will require further advances in water
management practices and the pace and scale of tailings management
and site reclamation.
IHS CERA's previous multiclient study, Growth in the
Canadian Oil Sands: Finding a New Balance found that the total
"well-to-wheels" greenhouse gas emissions from oil sands-from
extraction and processing through combustion of its refined
products-are approximately 5 to 15 percent higher than the average
crude oil processed in the United States. But comparison to an
average can be misleading, the report noted. Emissions from oil
sands can be higher, lower or on par with other crude oils
processed in the United States.
The Role of Canadian Oil Sands in U.S. Oil Supply
notes that innovation is a central element of the oil sands story.
The pace of technological innovation in the production of oil sands
has been substantial in the past, with major technological strides
in optimizing resources, innovating new processes, reducing costs,
increasing efficiency, reducing GHG emissions, and reducing its
environmental impact. However, new techniques and technologies will
be needed to continue to grow production sustainably. Cooperation
between the Canadian and U.S. governments and the private sector
will continue to be crucial to the continued advancement of new
technologies, the report finds.
The Role of Canadian Oil Sands in U.S. Oil Supply is
the first report from the IHS CERA Canadian Oil Sands
Dialogue, which brings together a wide variety of stakeholders
to participate in an objective analysis and open exchange on the
benefits, costs, and impacts of various choices associated with
Canadian oil sands development. The dialogue addresses a range of
topics that have the potential to shape the future growth of oil
sands. The report is the first of four to be released this
year.