By Matt Koch
Venezuela’s on-going political and economic crisis emphasizes the need for the United States to continue to diversify and grow its supplies of energy, particularly from our neighbor to the north – Canada. More pointedly, it highlights the importance of expanding and building more pipelines from Canada, such as TransCanada’s Keystone XL and Enbridge’s Line 3.
While the U.S. has grown to be largest oil and gas producer in world, we still import crude oil and petroleum products to meet our needs. In 2016 U.S. net imports (imports minus exports) of petroleum from foreign countries were equal to about 25% of the petroleum consumed in our country.
Due to its vast conventional crude and oil sands resources, its proximity, and our favorable trade relationship, the amount of crude oil that we import from Canada has increased and we import more oil from Canada than from any other country.
Venezuela is the third largest exporter of crude oil to the U.S., supplying nearly 750,000 barrels per day of heavy crude oil supplies to U.S. refiners, delivered primarily by ocean tanker. As the Houston Chronicle points out, Gulf Coast refiners remain dependent on the supplies of heavy crude from Venezuela, and the political unrest and possible supply disruptions are causing concern and forcing refiners to look elsewhere for supplies, including to Canada.
While it is great that we have the ability to turn to Canada to purchase more energy, it will be even better when we have a more extensive, flexible energy delivery network that can make those supplies more readily available.
Coincidently, the amount of heavy crude oil that is expected to be delivered by Keystone XL is almost exactly equal to what we import from Venezuela. It is too bad that Keystone XL was unfairly delayed – we could certainly use it now.