Comments on: Canada’s Oil Supply 2nd only to Saudi Arabia http://lifeontheroad.com/2007/10/15/canadas-oil-supply-2nd-only-to-saudi-arabia/343.html Discussion and opinions about the trucking industry Mon, 26 Jul 2010 14:57:38 +0000 hourly 1 http://wordpress.org/?v=3.0 By: E. Phil Haley http://lifeontheroad.com/2007/10/15/canadas-oil-supply-2nd-only-to-saudi-arabia/343.html/comment-page-1/#comment-364 E. Phil Haley Mon, 15 Oct 2007 06:40:45 +0000 http://lifeontheroad.com/2007/10/15/canadas-oil-supply-2nd-only-to-saudi-arabia/343.html#comment-364 Canada is and, for the last 8 years, has been the number one supplier of oil to the U.S. market. Canadian imports represent 17 percent of U.S. imports and 11 percent of U.S. consumption. There are many reasons that foreign investment into Canadian oil production has increased; not the least of which is a stable tax environment (Check out what's happening here in Alaska this week as our Governor seeks to increase, once again, the Producers Production Tax). Where we get our oil, however, doesn't diminish the impact middle-eastern oil plays in the world market. If the Saudi's, for example, were, for whatever reason, to radically reduce their supplies of crude, of which very little finds its way to U.S. refineries, the European and Asian producers would then seek their supply elsewhere. This would result in a sharp rise in the prices that U.S. refiners would have to pay for crude and cause a rise in prices. The price of crude, no matter where it comes from, is regulated in world, not local, markets. The Canadian Tar Sands project has been around for many, many years but its only during those times when crude oil prices are high that its operation is feasible. Having delivered equipment to the project in Ft. McMurray, Alberta, which has been intermittently operated since 1967, and having seen one of the newer centrifuges being delivered to the site from Edmonton (I couldn't miss it; it was 300 feet in length, 30 feet in diameter and weighed in around 1,000,000 lbs.), I can tell you that this project is both massive in scope and incredibly labor and fuel intensive. The MacKenzie river natural gas pipeline is being built primarily to provide the massive amount of natural gas needed to heat the centrifuges used to separate the oil from the mined sand. All that said, I agree that we should support both Mexican and Canadian producers in every way that we can. The fact that the U.S. is such a large consumer of their production gives us some leverage with both of their governments because, without us, they would incur much higher shipping costs to reach other markets. I can think of ways in which this leverage can be used to our advantage and I'm sure that you can, as well. As far as Biofuel standards go; the American Society for Testing and Materials (ASTM) sets fuel standards. ASTM D 975 is the standard for petroleum based diesel fuel and ASTM D-6751 is the standard set for pure biodiesel used in 80/20 blends of petro- and biodiesel (B20). According to the National Biodiesel Board: "Most major engine companies have stated formally that the use of blends up to B20 will not void their parts and workmanship warranties. This includes blends below 20% biodiesel, such as the 2% biodiesel blends that are becoming more common." Canada is and, for the last 8 years, has been the number one supplier of oil to the U.S. market. Canadian imports represent 17 percent of U.S. imports and 11 percent of U.S. consumption. There are many reasons that foreign investment into Canadian oil production has increased; not the least of which is a stable tax environment (Check out what’s happening here in Alaska this week as our Governor seeks to increase, once again, the Producers Production Tax). Where we get our oil, however, doesn’t diminish the impact middle-eastern oil plays in the world market. If the Saudi’s, for example, were, for whatever reason, to radically reduce their supplies of crude, of which very little finds its way to U.S. refineries, the European and Asian producers would then seek their supply elsewhere. This would result in a sharp rise in the prices that U.S. refiners would have to pay for crude and cause a rise in prices. The price of crude, no matter where it comes from, is regulated in world, not local, markets.

The Canadian Tar Sands project has been around for many, many years but its only during those times when crude oil prices are high that its operation is feasible. Having delivered equipment to the project in Ft. McMurray, Alberta, which has been intermittently operated since 1967, and having seen one of the newer centrifuges being delivered to the site from Edmonton (I couldn’t miss it; it was 300 feet in length, 30 feet in diameter and weighed in around 1,000,000 lbs.), I can tell you that this project is both massive in scope and incredibly labor and fuel intensive. The MacKenzie river natural gas pipeline is being built primarily to provide the massive amount of natural gas needed to heat the centrifuges used to separate the oil from the mined sand.

All that said, I agree that we should support both Mexican and Canadian producers in every way that we can. The fact that the U.S. is such a large consumer of their production gives us some leverage with both of their governments because, without us, they would incur much higher shipping costs to reach other markets. I can think of ways in which this leverage can be used to our advantage and I’m sure that you can, as well.

As far as Biofuel standards go; the American Society for Testing and Materials (ASTM) sets fuel standards. ASTM D 975 is the standard for petroleum based diesel fuel and ASTM D-6751 is the standard set for pure biodiesel used in 80/20 blends of petro- and biodiesel (B20). According to the National Biodiesel Board: “Most major engine companies have stated formally that the use of blends up to B20 will not void their parts and workmanship warranties. This includes blends below 20% biodiesel, such as the 2% biodiesel blends that are becoming more common.”

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