Canadian success, American failure

Written by Mike Byfieldon March 7, 2011 Although few Canadians really grasp the fact, Canada has achieved enormous success in domestic crude oil production. In contrast, the United States has failed by any measure. Oil & Gas Inquirer’s cover story in January/February describes that success . During the first half of the 20th century, Canada struggled desperately to produce oil from its small proven reserves for two world wars. Simultaneously, the U.S. accounted for 70 per cent of world oil production in 1925, 63 per cent in 1941 and over 50 per cent in 1950. South of the 49th parallel, however, domestic reserves were not replaced despite the fact that American technology dominated the global oil industry. By 1970, the U.S. could no longer supply its own crude consumption. In 2009, Americans imported 63 per cent of their oil. Dependence on foreign energy drains their economy and jeopardizes their national security. Canada could easily have fallen down the same economic crack. Our domestic light and medium crude production peaked in 1973 and has been decreasing ever since. Fortunately, this country developed its heavy and extra-heavy crude resources, as outlined in this issue’s cover story. We’re now better off than ever, and the picture promises to improve further in future. The U.S. did not necessarily have to fall so abysmally short. Its shale oil resource, although technically daunting, has been quantified on an immense scale, easily comparable to Canada’s oilsands and heavy oil. Yet even now, the federal government in Washington continues to downplay shale oil development in Colorado and Wyoming. Ironically, innovative shale oil technology pioneered by Shell Oil in the U.S. may well be deployed more effectively in Alberta’s carbonate bitumen reserves. Canadians do not hear much good about heavy and extra-heavy crude. “Dirty oil,” sneers a tribe of critics across North America—yet they offer no alternative energy sources that would be even faintly reliable. If these perfectionist folks had been on our backs, westerners could not have built transcontinental railways and harnessed the Prairie soil to feed a hungry world. In our own time, two generations of western oilmen have performed on that same magnificent scale.