I think it has to do with the fact that we don't have the market within the country for additional refining capacity, Also it is cheaper to import oil/gasoline than refining it from crude.
Here is a list of the 19 refineries across Canada
Canadian Refineries
This is an interesting Chart of refining capacity with time
So Canada had many more refineries but in the past they had small capacity.... So strategic refiners were upgraded in capacity whereas the weaker refineries were shut down.
Here is a chart of existing Oil and Gas pipelines in Canada.
As you can see we don't have a pipeline that spans the whole country for oil... we do for Natural Gas...almost anyway. Alberta and Northern British Columbia has a plethora of pipelines but that is representative of the fact that this is where our oil and gas resources are located in the country.
Here is where we have Oil and Diluent terminals located
Crude Oil storage terminals
There is no storage facility east of Manitoba
Here is the storage by Province
Manitoba:.............. 3,000,000 barrels
Saskatchewan: ..... 5,300,000 "
Alberta ................ 82,900,000 + 3,800,000 under construction
British Columbia ... 2,800,000 + 4,100,000 under construction
In lieu of pipeline transfer of oil, there has been an increase in rail transport of oil
Crude oil rail transport terminals
Ninety percent of those terminals are west of Manitoba. This is a more expensive way to transport oil but there is little choice with no increased pipeline capacity.
this is an overview of Canadian oil production
Canadian oil production
Here is something that most Americans do not know
Petroleum production in Canada is a major industry which is important to the economy of North America.
Canada has the third largest oil reserves in the world and is the world's fourth largest oil producer and fourth largest oil exporter.
In 2017 it produced an average of 667,747 cubic metres per day (4.2 Mbbl/d) of crude oil and equivalent. Of that amount, 64% was upgraded and non-upgraded bitumen from oil sands, and the remainder light crude oil, heavy crude oil and natural-gas condensate.[1]
Most of Canadian petroleum production is exported, approximately 482,525 cubic metres per day (3 Mbbl/d) in 2015, with almost all of the exports going to the United States.[2]
Canada is by far the largest single source of oil imports to the United States, providing 43% of US crude oil imports in 2015 Canada is invisible to most Americans... especially where oil is concerned and our resources/culture in general.
I did not know this: USA OIL TARIFF
Financial Post June/2019
CALGARY — A little-known tariff is costing Canadian oil companies $60 million a year and though it predates Donald Trump’s presidency, it’s likely to persist even if the new North American free trade agreement comes into force.
Oil might be the last export category that traders would expect to pay tariffs on — after all, Canadian oil supplies have been touted as a pillar of U.S. “energy security” by multiple U.S. presidents — but Global Affairs Canada, which manages the country’s diplomatic relations, said companies sending crude over the border in recent years are annually spending a total of amount $60 million in tariffs and duties, an amount that has remained more or less steady through the industry’s ups and downs. And this is an reason why Canada is irritated with trade with the USA.... from the same article above
Despite the need down south for Canadian oil, the U.S. Customs and Border Protection (CPB) has carried out an increasing number of audits on shipments, demanding proof of origin for the crude moving between the North American Free Trade Agreement’s partners, and applying those aggravating duties to Canada’s largest export category. The USA does not pay world price for Canadian oil.... We get only the Western Canada Select price
Here is a summary of the per barrel price that the USa pays for Canadian oil
That is quite a saving for the USA PLUS the fact that they charge a tariff on our oil. can you imagine... in late 2018 they were get our oil for about $10/barrel.... is it any wonder why the Canadian Oil industry has been so depressed???
Why can the USA do this.... because Canada has no other market for our oil.
You can imagine how excited the USA is that Canada is pursuing the build of other pipelines to the east and to the Pacific ocean.
They have Canada under their economic thumb and there is suspicion that groups in the USA are actively supporting groups in Canada that oppose pipeline expansion.... it is felt in Canada that the USA WANTS our resource land-locked and for their use only (aside for Canadian use) ....why not? They are getting a hell'va deal don't you think.
Anyway.... I hope this helps your understanding of Canadian oil and our irritation in trade issues.
UE |
