In the News April 12

Extent of Integration of Canadian Energy Sector Within U.S. Economy

For Your Information

Analyzing Economic Impacts of U.S. Oil and Gas Industry

The following short extracts are taken directly from the report of the Canadian Energy Centre (CEC), “Enhancing North American Energy Security.” For the entire article click here.

The U.S. oil and gas industry comprises establishments engaged in oil and gas extraction, drilling oil and gas wells, support activities for oil and gas operations, natural gas distribution, petroleum refineries, petroleum lubricating oil and grease manufacturing, pipeline transportation, petroleum and petroleum products merchant wholesalers, and retail gasoline stations. The U.S. oil and gas industry also includes activities related to asphalt paving mixture and block manufacturing, asphalt shingle and coating materials manufacturing, and fuel dealers. These latter activities are difficult to separate out for the oil and gas industry and are not included in this analysis. Thus, the direct and indirect impacts of the U.S. oil and gas industry detailed in this CEC Fact Sheet are somewhat understated.

There is a significant Canadian presence in the U.S. oil and gas industry. It includes the following facts:

– Between 2000 and 2019, the cumulative aggregate value of the total energy products trade between Canada and the United States was nearly $2 trillion, including $138 billion in 2019 alone.

– Crude oil (including bitumen) has been the highest value commodity in the Canada-U.S. energy products trade flow, at a total value of $1.1 trillion over the 20-year period examined, including nearly $102 billion in 2019.

– Natural gas is the second highest value commodity in the cross-border energy products trade flow, representing a cumulative total trade value of over $426 billion over two decades, and over $12 billion in 2019.

– The percentage of total exports of Canadian heavy oil (i.e., with an API gravity of 25.0 degrees or less) that has been shipped to U.S. refineries has more than doubled over the past two decades, from 25.1 per cent of all Canadian oil exported in 2000 to 55.8 per cent in 2019.

– Overall, Canadian exports of crude oil to the U.S. for processing have risen from nearly 1.3 million barrels per day in 2000 to over 3.8 million barrels per day in 2019, an increase of over 194 per cent.

In 2019, the Canadian Energy Research Institute (CERI) estimated that for the forecast period of 2019-2029, the total impact on the U.S. gross state product would amount to almost U.S.$15 billion, while the total employment impact in creating or sustaining those operations would be around 133,000 full-time equivalent jobs (CERI, 2019).

(The report goes on to detail the size of the U.S. oil and gas sector. For this information see the full report.)

Workers’ Forum, posted April 12, 2022.