Canada Frets U.S. Oil Surge, But So Far Still Sending More Crude South

By Carolyn King?

Thanks to booming domestic shale-oil production, the U.S. is relying less on foreign oil imports. But there?s one notable exception: Canada.

The U.S. Energy Information Administration said in a report Wednesday?that, even as the U.S. bought less oil from foreign suppliers overall, it imported nearly 2.5 million barrels a day from its northern neighbor during the first eight months of this year, up from 2.2 million Canadian barrels for all of last year.

The new data release?part of ?Canada Week? at the American energy-statistics agency?shows Canada, already the largest supplier of foreign oil to the U.S., grabbed a 28% share of U.S. foreign-oil imports in the January-August period. That compares with a 25% share for all of last year.

That?s good news for Canadian producers, who rely overwhelmingly on the U.S. market, sending almost 99% of their oil exports south. It also comes amid recent hand-wringing in Alberta, the source of most of Canada?s oil. Amid surging U.S. production, many Canadian executives and officials are fretting that the new output could displace Canadian crude.

The Paris-based International Energy Agency said recently here?that it expects overall U.S. oil imports to continue to fall, as surging oil and gas production lessens the country?s need for foreign supplies. The new EIA data suggest Canada, at least for now, isn?t suffering.

Still, the government of Canadian Prime Minister Stephen Harper is hedging its bets. Ottawa has been pushing aggressively to diversify Canada?s energy markets, especially in the wake of the White House?s surprise rejection earlier this year of the Keystone XL pipeline expansion project. That project would see even more Canadian crude flow to the U.S. The Obama administration has promised to review the project again.

Right now, the two countries share the world?s most significant energy-trade relationship, according to the U.S. Energy Information Administration. Trade in energy products topped $100 billion last year and involved not just crude oil but natural gas, electricity, hydro power, coal and other products. For more details on that relationship read here.

Source: http://blogs.wsj.com/canadarealtime/2012/11/28/canada-frets-u-s-oil-surge-but-so-far-still-sending-more-crude-south/?mod=WSJBlog

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