simplify the economy | Why do we export our oil instead of consuming it?

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Posted at 7:00 am

Delphine Belzel

Delphine Belzel

good morning. How does Canada export its oil and also import oil?

Renee Mason

Canada is recognized as one of the largest oil producers. In 2021, the country exported more than 3.8 million barrels of crude oil per day, according to Energy Regulator Canada (REC).

Although Canada is a net exporter of oil, some provinces depend on imports to meet regional demand. Canada’s oil exports come mainly from the west of the country, while oil imports dominate in the east.

According to Pierre-Olivier Pinault, energy policy expert at HEC Montréal, access to Canadian oil infrastructure is limited to Canada’s eastern provinces: the existing pipeline network cannot transport enough oil to refineries in Ontario, Quebec and the Atlantic provinces. These provinces depend on foreign oil imports.

For example, New Brunswick, not connected to any pipeline, imported more than 260,000 barrels of crude oil per day in 2021. This was more than 50% of the country’s total crude oil imports, says the Electricity Economic Center.

In addition to the limited supply from existing pipelines to eastern Canada, the region does not have the capacity to refine Alberta oil, explains Jean-Thomas Bernard, a professor at the University of Ottawa who specializes in energy economics.

Canada had begun exploiting the oil sands at the end of the 1960s, and fearing that it would run out of oil in the wake of the 1970s oil crisis, the country increased its production, the specialist notes.

Tar sands oil is a heavy oil that requires special processing. Jean Thomas Bernard points out that refineries in Ontario, Quebec, and the Atlantic regions are not adequately equipped to process heavy oil.

Map provided by Canadian power regulator

Major oil pipelines regulated by Energy Canada

Thus, refineries in the east of the country, including the Irving refinery in New Brunswick and the Jean Gulin refinery From Valero in Quebec, it depends on imports of light oil, mainly from the United States and Saudi Arabia.

Exporting oil from Alberta to the United States is very simple: refineries in the Gulf of Mexico have the capacity to process oil from the oil sands, notes Jean Thomas Bernard. Historically, he adds, these refineries have been getting heavy oil from Venezuela.

In 2021, imports of refined petroleum products increased by 7% compared to the previous year. Alberta is the main importer: The province must import diluents that are added to heavy oil from the oil sands so that the solution is “liquid enough to be transported through the pipeline,” explains Jean-Denis Charlebois, chief economist at REC.

In Quebec, all the oil now comes from the United States and Canada.

Operation of Enbridge Line 9B has allowed the county to supply more domestic petroleum products, he says Quebec Energy State 2022a report issued by the HEC Montreal Chair in Energy Sector Management.

Gasoline demand peaked in Canada in 2019, according to Jean-Denis Charlebois. He adds that there is a downward trend in oil imports, which is explained in particular by improved access to oil facilities and the transition to renewable energies.

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