Oct
22
The Canadian Boom Booms In The U.S.
October 22, 2009 | 6 Comments
The Canadian Energy Research Institute (CERI) has a new study out that finds the economic impact of oil sands development in Canada will boom in the U.S. economy and is expected to lead to the creation of more than 342,000 new U.S. jobs between 2011 and 2015. That’s up close timing and a serious number of good jobs the U.S. needs now.
The study is titled “Canada’s Oil Sands and Economic Impact on the USA,” says greater production of Canadian oil sands will stimulate economic activity in both countries. As oil sands production and investment in Canada rises, demand for U.S. goods and services increases significantly, adding an estimated $34 billion to U.S. gross domestic product in 2015 and rising to $42.2 billion in 2025. This just enhances Canada as the largest trading partner of the United States. It’s a very good thing to get some of your fuels from the good neighbors. Having been up there, what facts are to be seen in the media are mostly environmental gyrations of misinformation.
What is also overlooked is the Canadian desire to extract the full value of the resource. Particularly in Alberta the attitude is to get the whole carbon resource in value mode. Bitumen is a heavy carbon molecule and research is going to find a way to get the carbon excess back into useful products.
Meanwhile, CERI says in its study, “Oil sands reserves play an increasingly important role in the economic development of Alberta, Canada and the United States. What is often not clearly understood is that the large investment in the oil sands industry contributes to increased economic activity in the rest of North America by stimulating demand for goods and services across a wide range of industries.” That’s meaningful observation. Few people realize how important to their lives the oil sands business works both at the fuel purchase level as well as the jobs, paychecks and the investment returns side.
The U.S spokesperson, API President Jack Gerard says, “Clearly Canadian oil sands development is a win-win for both Canada and the United States. Not only is greater oil sands production crucial for U.S. energy security, it also supports thousands of American jobs and is a major contributor to our nation’s economic growth.”
The study was commissioned by the API, begging the obvious question, “Who would know if its not researched?” So you know, CERI is a non-profit Canadian energy and environmental research institute.
CERI based its assumptions on oil sands output rising from about 1.4 million barrels a day to around 4 million barrels a day in 2025. It estimated annual capital investment and operating costs needed to achieve this output – about $25 billion in new investment and $7 billion in operating costs in the peak year of 2015 – and then estimated the economic impact to Canadian and U.S. economies.
According to the study by CERI the benefits of oil sands development are broadly shared across many U.S. industry sectors and regions. Thought about, it starts with folks arranging the rights of way for the new pipelines, trenching and pipliners on to refinery builders, workers, contactors and even something for the public relations folks who oppose the whole thing. It’s a great new source of fuel, economic activity and cash flow.
Canada is by far the biggest supplier of imported oil and natural gas to the United States and growing. Companies are investing huge sums to expand U.S. refineries and build new infrastructure to transport the Canadian oil into the United States. It comes from the north – just opposite of the southern source with its hurricane risk.
The report itself occupies 56 pdf pages with the executive summary through to the results running 24 pages. That leaves about half for the intro sheets and a large appendix. This is a good pdf to have for fact checking.
Even the narrative is packed with graphs and charts. It’s a very quick read.
But one suspects that it is as all things forecasted, subject to the real world. Which if anything, tends to suggest that the numbers will be understated over time. Bitumen as a fuel source is going to last a very long time.
It’s a nice thing and a choke on the naysayers, to have a sense of what the investment, jobs and continental security is worth to the U.S and Canada. It’s best to get on with it too, as the age of oil is winding down, and if the large and heavy bitumen molecules are ever going to be worth anything, its now.
Comments
6 Comments so far
Canadian Petrodollars recycle into the North American economy at a higher rate than OPEC’s do.
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