Posted yesterday at 4:00 p.m.
Why buy foreign oil when you have such large reserves?
Denis Bourque
Answer: If you go to Alberta, there is a chance that you will be reminded of this well-established myth: “Ah, you Quebecers, you are happy to receive equalization, but you prefer to buy your oil of foreign dictatorships, instead of the one produced in Alberta. »
Wow, the engines! This is all completely wrong! To convince yourself of this, take a look at theState of energy in Quebec of the Energy Sector Management Chair at HEC Montréal. This very useful document contains several pleasant observations1.
First, half of the province’s energy supply comes from local and renewable sources, thanks to hydroelectricity, but also wind turbines and biomass. Few parts of the world can say the same. It deserves to be underlined.
Second, the oil we import – three-quarters of which is used in transportation – comes entirely from North America. Yes, yes, 100%.
This was far from being the case ten years ago: a large part of the oil consumed in Quebec then came from Algeria, Kazakhstan, Nigeria, the United Kingdom, Norway and even Mexico. .
But times have changed. With the shale oil boom in the United States, we now buy 47% of our oil from our neighbors. The rest (53%) comes from Western Canada, thanks to the reversal of Enbridge’s line 9B in 2015 which now flows from Sarnia, Ontario to Montreal.
It is a very good thing.
From a political point of view, “homegrown” supply that promotes national unity is certainly preferable to buying oil from foreign countries ruled by tyrants.
And from an economic point of view, it is also advantageous since oil from the West sells for less (about US$100 a barrel, compared to US$120 for American oil), in particular because of the lack of pipelines to export it.
So, couldn’t we supply ourselves entirely at home?
Theoretically, yes, because Canada exports much more oil (3.8 million barrels per day in 2019) than it imports (800,000 barrels). But in practice, it is more complicated, because of the limited transport capacity from Western Canada to the East.
Worst of all, that supply capacity is in jeopardy as the Governor of Michigan and an Indigenous community in Wisconsin are calling for the closure of Enbridge’s Line 5, which carries oil from western Canada to in Sarnia.
One can understand the fears of leaks from the 67-year-old Line 5, which crosses the Strait of Mackinac connecting Lakes Huron and Michigan. The Americans still have in mind the terrible Enbridge spill in the Kalamazoo River.
But it would be absurd to close the tap altogether. All of Canada would lose.
For the oil industry, it would be a blow.
In Quebec, the effect at the pump for motorists would not be huge. But we would see a lot more tankers navigating the St. Lawrence River to bring us oil from overseas, as was the case before the reversal of line 9B.
On the other hand, it would be silly to build another oil pipeline from scratch (like the defunct Energy East project) when we can renovate line 5, which has been around for a very long time. It is in this sense that Ottawa must plead with the United States.
It is not with the policy of “Not in my backyard” that we can move forward collectively.