23 August 2013 09:41 [Source: ICB]
US manufacturers, chemical producers among them, know that North America needs to muster all its infrastructure resources to take full advantage of the shale oil and gas boom.
That is why they have become so frustrated with the approval process for the controversial Keystone XL pipeline, which would move crude from the oil sands in Alberta in Canada to consumers in the US Midwest and the Gulf Coast.
There is frustration in North America over the lack of progress on pipelines
The pipeline would be a vital link helping to maintain the momentum of a re-energised US manufacturing economy, protagonists suggest. In Canada, the link is seen as vitally important to the future of its oil industry.
Adding infrastructure, including rail lines where oil pipelines are not available, will keep crude flowing and help Canada build on its position as the major non-OPEC exporter of crude to the US.
The shale oil and gas boom may have boosted the nation's energy security but not the need for imports.
"Oil independence from foreign imports is not achievable either in the continental United States context or the North American context," a report from the Canadian Energy Research Institute (CERI) claimed in August. "In the North American context, after accounting for Mexican and Canadian import volumes, the US still requires 2m bbls per day of crude imports to meet demand which would be sourced from OPEC and non-OPEC sources," the study, which looks out to 2022, suggested.
The next five years will be critical for Canada as the influence of the exploitation of tight oil and of shale gas on the transportation sector in the US becomes better established.
But a lessened dependence in the US on OPEC crude imports potentially opens a window of opportunity for more Canadian oil to flow south. Energy conservation and the conversion of more vehicles to run on natural gas could offer savings of 1-2m bbls/day CERI says.
"However, the rate of adoption within the transportation sector is slow and in all likelihood will not be achievable until well into the next decade."
Shale deposits in North Dakota, Texas, Colorado and Ohio have the potential to add 2.4m bbls/day of new crude production by the end of this decade. But, CERI notes, conventional oil production onshore in the US and in the Gulf of Mexico are declining "resulting in a potential loss of 1.5 million barrels per day, also by the end of the decade".
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