The People of America's Oil and Natural Gas Indusry

Canada and the US: Energy Security and Job Creation

Jane Van Ryan

Jane Van Ryan
Posted February 25, 2011

The U.S. State Department is evaluating a permit application to extend TransCanada's Keystone Pipeline to refineries in the U.S. Gulf Coast. If the project is approved, the pipeline would transport oil-sands derived oil from Alberta, Canada, to U.S. Gulf Coast refineries where it can be turned into products for American consumers. Although the pipeline has been on the drawing board for years, its importance to the United States is becoming clearer with every passing day.

In terms of energy security we are fortunate that the largest oil importer to the United States is right next door. As Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council, reminded his readers in a Feb. 22 blog post, Canada is the United States' "number one source" for oil:

"[J]ust one nation among the top five that export oil to the U.S. is in the Middle East. In fact, our oil imports from Canada not only are nearly double the level of imports from Saudi Arabia, but we import more oil from Canada than from all Persian Gulf nations."

Keating added that the construction of the pipeline extension "certainly would be a plus for U.S. entrepreneurs, small businesses and consumers who need affordable, reliable energy to run their enterprises and homes." Oil sands development in Canada is creating more than 342,000 new U.S. jobs between 2011 and 2015, according to a study by the Canadian Energy Research Institute.

About 13,000 of the pipeline construction jobs are expected to require the services of union laborers, prompting the support of union leaders and workers:

On average, the United States receives more than 2 million barrels of oil a day from Canada, accounting for about 12 percent of oil we consume. About half of it is derived from oil sands. With more oil sands development, Canada could provide more than a quarter of America's daily energy needs by 2030. The amount of crude Canada can give us in the future could be as much as 5.7 mbd according to Cambridge Energy Research Associates (CERA). That is enough to meet more than all of the oil consumed by the 15 Midwestern states today, or enough to supply almost two-thirds of all the gasoline used in the United States today.