By Ben Geman - 05/14/12 07:11 PM EDT
[N]early all of Canada's crude oil exports, about 99 per cent, go to only one customer: the United States. US demand is dropping, in fact according to a TD Economics special report released earlier this month there has been a 30% net drop in their imports of oil and petroleum products since 2005. Their domestic supply is growing and they do have a desire to be self-sufficient. Us finding another customer won't hurt their feelings.
Our most valuable export commodity, and only one market. Does anyone want to defend that business model?
At the same time, the US has a wide range of oil suppliers to choose from – 65 countries in fact. The list includes such major petroleum exporters as Saudi Arabia, Venezuela, Mexico, Nigeria and Russia.
That's a dangerous imbalance for Canada.
Enbridge, in a move environmentalists are battling, is seeking regulatory approvals for a pipeline that would bring Canadian oil sands west from Alberta to the British Columbia coast for export.
Holder’s comments are another sign that the push to open up new markets for Canadian oil sands seems likely to continue no matter what happens to TransCanada Corp.’s Keystone XL proposal, which would bring oil sands to refineries along the U.S. Gulf Coast.
It’s a dynamic that creates challenges for Keystone’s political backers — not to mention foes of oil sands development.
The desire, which Prime Minister Stephen Harper shares, to diversify the export market away from the United States could dent the common claim by Capitol Hill’s Keystone advocates that if the United States doesn’t boost imports of Canadian oil sands via Keystone, China will get the resources.
Yet neither Enbridge nor Harper see it as an either/or. Harper, speaking in Washington recently, said the White House denial (thus far) of a cross-border permit for Keystone highlights the need to find other buyers — but added that new buyers are in Canada’s interest regardless of Keystone’s fate.
Harper, in remarks reported by Canada’s Postmedia News, said, “to not diversify to Asia, when Asia is a growing part of the world, just simply makes no sense.” Key grafs from their April write-up:
Harper was asked if Canada would drop those plans if the U.S. suddenly shifted ground and opened its arms to the Keystone XL project.
"Would approval of this change our mind?" replied Harper. "The answer is no."
"We cannot be, as a country, in a situation where really our one, and in many cases, almost only energy partner could say no to our energy products. We just cannot be in that kind of position.
"And the truth of the matter is that when it comes to oil in particular, we do face a significant discount on the marketplace because of the fact that we are a captive supplier.”