From the Canadian Energy Centre

By Deborah Jaremko

Complementary production in Canada and the U.S. boosts energy security

The United States is now the world’s largest oil producer, but its reliance on oil imports from Canada has never been higher.

Through a vast handshake of pipelines and refineries, Canadian oil and U.S. oil complement each other, strengthening North American energy security.

Here’s why.

Decades in the making

Twenty years ago, the North American energy market looked a lot different than it does today.

In the early 2000s, U.S. oil production had been declining for more than 20 years. By 2005, it dropped to its lowest level since 1949, according to the U.S. Energy Information Administration (EIA).

America’s imports of oil from foreign nations were on the rise.

But then, the first of two powerhouse North American oil plays started ramping up.

In Canada’s oil sands, a drilling technology called SAGD – steam-assisted gravity drainage – unlocked enormous resources that could not be economically produced by the established surface mining processes. And the first new mines in nearly 25 years started coming online.

In about 2010, the second massive play – U.S. light, tight oil – emerged on the scene, thanks to hydraulic fracturing technology.

Oil sands production jumped from about one million barrels per day in 2005 to 2.5 million barrels per day in 2015, reaching an average 3.5 million barrels per day last year, according to the Canada Energy Regulator.

Meanwhile, U.S. oil production skyrocketed from 5.5 million barrels per day in 2005 to 9.4 million barrels per day in 2015 and 13.3 million barrels per day in 2024, according to the EIA.

Together the United States and Canada now produce more oil than anywhere else on earth, according to S&P Global.

As a result, overall U.S. foreign oil imports declined by 35 per cent between 2005 and 2023. But imports from Canada have steadily gone up.

In 2005, Mexico, Saudi Arabia, Venezuela and Nigeria together supplied 52 per cent of U.S. oil imports. Canada was at just 16 per cent.

In 2024, Canada supplied 62 per cent of American oil imports, with Mexico, Saudi Arabia and Venezuela together supplying just 14 per cent, according to the EIA.

“Light” and “heavy” oil

Canadian and U.S. oil production are complementary because they are different from each other in composition.

Canada’s oil exports to the U.S. are primarily “heavy” oil from the oil sands, while U.S. production is primarily “light” oil from the Permian Basin in Texas and New Mexico.

One way to think of it is that heavy oil is thick and does not flow easily, while light oil is thin and flows freely – like orange juice compared to fudge.

The components that make the oil like this require different refinery equipment to generate products including gasoline, jet fuel and base petrochemicals.

Of the oil the U.S. imported from Canada from January to October last year, 75 per cent was heavy, six per cent was light, and the remaining 19 per cent was “medium,” which basically has qualities in between the two.

Tailored for Canadian crude

Many refineries in the United States are specifically designed to process heavy oil, primarily in the U.S. Midwest and U.S. Gulf Coast.

Overall, there are about 130 operable oil refineries in the United States, according to the American Fuel and Petrochemical Manufacturers.

The Alberta Petroleum Marketing Commission (APMC) estimates that 25 consistently use oil from Alberta.

According to APMC, the top five U.S. refineries running the most Alberta crude are:

• Marathon Petroleum, Robinson, Illinois (100% Alberta crude)
• Exxon Mobil, Joliet, Illinois (96% Alberta crude)
• CHS Inc., Laurel, Montana (95% Alberta crude)
• Phillips 66, Billings, Montana (92% Alberta crude)
• Citgo, Lemont, Illinois (78% Alberta crude)

Since 2010, virtually 100 per cent of oil imports to the U.S. Midwest have come from Canada, according to the EIA.

In recent years, new pipeline access and crude-by-rail have allowed more Canadian oil to reach refineries on the U.S. Gulf Coast, rising from about 140,000 barrels per day in 2010 to about 450,000 barrels per day in 2024.

U.S. oil exports

The United States banned oil exports from 1975 to the end of 2015. Since, exports have surged, averaging 4.1 million barrels per day last year, according to the EIA.

That is nearly equivalent to the 4.6 million barrels per day of Canadian oil imported into the U.S. over the same time period, indicating that Canadian crude imports enable sales of U.S. oil to global markets.

Future outlook

Twenty-five years from now, the U.S. will need to import virtually exactly the same amount of oil as it does today (7.0 million barrels per day in 2050 compared to 6.98 million barrels per day in 2023), according to the EIA.

From the Daily Caller News Foundation

By Curtis Schube

One of the first executive orders President Trump issued was “Unleashing American Energy.”

It begins an effort to undo the harm caused by the Biden administration’s unprecedented assault on the American energy sector. It overturns President Biden’s own destructive executive orders, including those canceling oil leases and prioritizing environmental regulations over the good of the economy and producing reliable energy.

It also orders that unduly burdensome energy regulations be rescinded. Trump’s EO forthrightly states that its goal is to encourage energy production “to meet the needs of our citizens and solidify the United States as a global energy leader.”

This executive order takes the nation in a whole new direction. It orders the agencies to audit their policies to weed out burdensome regulations that impact energy development. It terminates the infamous Green New Deal. It prioritizes employment and economic impacts in energy policy. It also revokes a Jimmy Carter Executive Order to reduce the burden on environmental studies that notoriously hold up energy projects.

One reform that met less pomp and circumstance, but is not lacking in impact, is permitting reform. President Trump’s Order instructs agencies to “eliminate all delays within their respective permitting processes including … the use of general permitting and permit by rule.”

This type of permitting reform should impact all American lives for the better. We all know how difficult permits can be to obtain, even if on a smaller scale than energy. When making an addition to a house, for example, one must submit it to government and pray that everything is correct.

Then, the waiting game begins as the government reviews the application, requires possible alterations at the its whim, then, eventually at some point, the project can move forward. It can be expensive and time consuming, and sometimes may deter people from even trying.

The same applies on a larger scale. Permits for major projects, like an oil well, can take years, even a decade or longer, to jump through all of the hoops. And, as the federal government is the gatekeeper to many different varieties of activities that require a permit, whoever is in charge of the executive branch can cripple a project.

Permits by rule and  general permits simplify the process drastically and ease the burden on both the applicant and the government. They are simple and predictable. For both types of permits, the government will first pre-determine the required criteria for someone to meet before the permitted conduct can commence. The government will promulgate the standards for all to see and know.

The applicant, knowing exactly what is required to perform the permitted conduct, can get a project moving quickly. For a general permit, no contact with the government is even needed. A permittee can begin a project so long as it satisfies the pre-set standards.

For a permit by rule, the applicant simply has to certify to the government, in writing, that all the criteria have been met. In response, the government can only check to see if the correct certifications are made and then either approve it or return the certifications with an explanation of which ones are not met. This is done in a short period of time, such as 30 days.

In both cases, the government has no discretion on a case-by-case basis. Instead of focusing its efforts as a gatekeeper for permits, the government will only focus on permittees who have not met the criteria, but after the permittee has begun its project. The government’s role is focused on enforcement actions.

Both sides benefit from this system. For those who behave correctly, the permitting process does not hold up projects. For the government, the resource drain for overseeing permitting is drastically reduced. The government only has to focus its attention on the minority of parties.

This system also has a built-in deterrent. If a permittee were to begin a project, only to have the government shut the project down at a later time through an enforcement action, the permittee would lose a significant investment.

The true benefit is to the American people. If energy companies can have a quick and expedited form of permitting, then the supply of energy can expand quicker. This makes the cost of energy, and all products, cheaper. In the wake of natural disasters, rebuilding can happen quicker. Infrastructure can be put in place faster. The benefits go on and on.

Permitting reform, such as that referenced in President Trump’s Executive Order, is a fantastic first step toward a more efficient government. His agencies should take full advantage and convert as many permits as possible to a permit by rule or general permit as soon as possible.

Curtis Schube is the Executive Director for Council to Modernize Governance, a think tank committed to making the administration of government more efficient, representative, and restrained. He is formerly a constitutional and administrative law attorney.