World Pipelines North America 2021

Page 18

Gordon Cope discusses how the crossborder movement of energy products in North America faces an uncertain future in the face of environmental opposition.

T

he movement of oil, gas and refined products across the borders of Canada, the US and Mexico has been a mainstay of free trade between the three countries for several decades. The immense expansion of energy trade is now being challenged by environmental opposition, however, and the future is anything but clear.

Canada and US crude Over the course of the last decade, the movement of crude from Canada to the US has grown at a tremendous clip. In 2010, Canada supplied approximately 13% of US refinery input, but by 2019, it had grown to over one third; Canada was exporting approximately 3.8 million bpd prior to COVID. As the pandemic recedes, exports are expected to rise to 4.45 million bpd by the end of 2021. The increase in exports has been driven by several factors. Oilsands output has been discounted for the last several years due to pipeline constraints, making it much more affordable than Middle East imports. Midwestern refineries are configured to take heavy crude (it would be costly to reconfigure for US light, tight shale oil). Finally, other sources of heavy crude, such as Mexico and Venezuela, have reduced exports or fallen under sanctions. US exports of crude to Canada have also expanded. Canada’s major refineries are located in Ontario and Quebec, but crude from the US accounted for a tiny fraction of input a decade ago; by 2019, that number had swelled to 45% of feedstock (around 450 000 bpd), as light, tight shale oil from the Bakken in North Dakota made its way to market. Altogether, total petroleum trade volume between the United States and Canada doubled to 2 billion bbls per year over the last decade. Most of this is in the form of crude; almost 5.5 million bpd now crosses the border in both directions. In all, the category of petroleum trade accounts for just under US$96 billion annually, exceeded only by the auto sector, at US$102 billion.

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