Canadian Oil Sands FAQs
Canadian oil sands are a major energy source, greatly helping to meet America's growing demands. Many Americans do not realize that the United States already imports more oil from Canada than from any other country. Our North American neighbor currently supplies more than 20 percent of our imported oil, half of which comes from the oil sands of Canada.
The following are frequently asked questions and answers about Canadian oil sands:
What are oil sands and how are they used? Oil sands are naturally occurring mixtures of sand, clay, water and a form of petroleum called bitumen—which can be upgraded to make synthetic crude oil and refined to make asphalt, gasoline, jet fuel and some chemicals.
How abundant are Canada’s oil reserves, and what portion comprises the oil sands? Canadian oil reserves are vast and are second only to those of Saudi Arabia, using current technological assessments. According to the Canadian Association of Petroleum Producers, oil sands now account for more than half of western Canada’s total oil production. By 2025, production from Canadian oil sands is expected to rise from about 1.3 million barrels per day to roughly 3.5 million barrels per day.
Why is Canadian oil important to the United States? Canada and the United States have an excellent trading and political relationship. Canada’s reliable and plentiful oil is crucial to improving our nation’s energy security and to meeting its growing energy demand.
Canadian oil sands development is a huge boost to the U.S.' economy. It is expected to create more than 340,000 new American jobs between 2011 and 2025.
How much of its oil does Canada export to the United States? Canada sends more than 99 percent of its oil exports to the United States—the bulk of which goes to Midwestern refineries. By getting more oil from Canada, Midwest refineries move from the back of the crude oil supply line to the front—making them far less vulnerable to supply disruptions caused by geopolitical upheaval or storms in the Gulf of Mexico.
How do oil sands factor into the American energy mix? According to the Energy Information Administration (EIA), a division within the Department of Energy, Canada is the top supplier of imported oil and natural gas to the United States. Of the Canadian crude oil brought into this country, approximately half is derived from oil sands. A May, 2009 report by Cambridge Energy Research Associates concluded that if oil sands development is maximized, the amount of oil the Unites States imports from Canada could potentially double by 2035.
Are there economic benefits associated with producing crude derived from Canadian oil sands?A recent study commissioned by the American Petroleum Institute (API) and conducted by the Canadian Energy Research Institute, "Canada's Oil Sands and Economic Impact on the United States' Economy," says greater production of Canada's oil sands is expected to stimulate economic activity in both countries, creating more than 340,000 new jobs in our country alone.
As oil sands production and investment rises, the demand for American goods and services also increases, adding an estimated $34 billion to the Gross Domestic Product (GDP) in 2015, and $42.2 billion by 2025.
For every dollar America spends on Canadian oil, almost 90 cents returns to the United States through Canadian purchases of U.S. goods and services. No other trade partner provides such a strong return.
The benefits of oil sands development do not fall to only one industry or to any one area in the country, but are broadly shared across many industrial sectors and regions. Millions of dollars are being invested to expand refineries and to build new pipelines that will transport and process Canadian oil.
Are there environmental concerns regarding the use of crude derived from oil sands? The extraction and processing of oil sands do, on average, result in higher greenhouse gas (GHG) emissions than does the refining of light, sweet (low-sulfur) crude oil, which, in its natural state is much simplier to refine. But many of the heavy, high-sulfur crudes currently being produced in the United States and around the world. On a life cycle GHG-emission basis (i.e., the process from the oil well to the gas tank), oil derived from Canadian oil sands is comparable with the other complex crudes currently being refined in the United States. We believe the United States is well equipped to manage the emissions from crude derived from oil sands, and will use greater care than if it were processed in regions of the world with less stringent environmental standards— not to mention the environmental costs of transporting the crude elsewhere.
What steps are being taken to limit the environmental impact of the practice? The oil and natural gas industry remains committed providing the energy our nation needs to power its economy in a reliable and environmentally responsible manner. To this end, the oil and gas industry has invested $58 billion between 2000 and 2008, which is 44 percent of all low and zero carbon technology investments. This investment in our environment is more than the federal government and all other industries combined.
Does the use of oil sands affect the quality of the refined product? Using oil sands as a feedstock does not affect the quality of the refined products. In fact, gasoline and other fuels made from oil sands are already being used in the United States today. Each project is required to adhere to applicable federal, state and local regulations and permitting conditions. Furthermore, refiners and pipeline owners are making large investments to increase the capacity and employ the flexibility necessary to process oil sands. They are also working to ensure that their final products meet all required specifications.