In a perfect world, the U.S. would be 100% oil independent. In today’s less-than-perfect world, tapping Canada for some of our energy needs would seem to be the next best thing.
Canada, after all, is our friend and our neighbor. And, it just put the finishing touches on a $1.2 billion pipeline that will move oil from Alberta, across the U.S. border, through Minnesota and into Wisconsin, where it will either be refined or transported to other U.S. markets. The U.S. section of the pipeline was one of the larger construction projects in Minnesota’s history. Which would make you think that the U.S. is committed to Canadian crude oil for the foreseeable future.
Yet, at the same time workers were welding the final stretch of pipeline, Canada’s ambassador to the United States was in Washington speaking out against a proposed policy that could severely limit how much Canadian crude oil makes it to the U.S.
He was talking about the Low Carbon Fuel Standard, which as CEA President David Holt recently outlined on this blog, would effectively block energy resources from Canada and Mexico from entering the country, creating a vacuum likely to be filled from much more distant sources in Africa and the Middle East. The standard, which has already been adopted in California and is being seriously considered by 11 other states, applies a misguided measure of a fuel’s carbon footprint, factoring in the way it is extracted, but failing to account for the fuel that it takes to transport it. Saudi crude oil would win, even though it takes a lot of fuel and money to transport it. Canadian crudes lose, even though they’re right in our own backyard. Of course, as we’ve noted before, many U.S. grades of crude oil would lose too, all because of an overly simplistic formula for determining carbon profiles.
For all the talk of conserving energy, it is astonishing how rarely we talk about all the energy we use transporting oil from halfway around the world. We use fuel to transport fuel from far away, even though we have fuel here at home and right over our borders. And then we promote measures like the Low Carbon Fuel Standard that sound good but actually encourage our use of far-away oil. How do we think all that oil gets here?
Much of our work here at CEA focuses on identifying the most practical policies for serving the country’s significant energy needs. Sometimes the issues are complicated. But sometimes they seem rather simple. There is oil close to home and oil much further away. You can move oil from nearby via pipeline. But you need a massive tanker to get it across an ocean.
Incidentally, Canada already has a backup plan in case the Low Carbon Fuel Standard becomes law across the U.S. Plans are reportedly underway to build another pipeline, this one to the west coast of Canada, where tankers could ship its oil to Asia. Sound a little roundabout to you?
