US energy self-sufficiency: Should Canada worry?

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The International Energy Agency predicts the United States will be capable of meeting its own energy needs by 2035, but that doesn’t necessarily mean its top crude supplier – Canada – has reason to panic.

Keywords: International Energy Agency, IEA, World Energy Outlook, Saudis, oilsands, oil sands , manufacturing, pipelines, TransCanada, Enbridge, Venezuela, Nigeria, Mexico, oil, exports, imports, shale rock,

US energy self-sufficiency: Should Canada worry?

No need to panic, thirst for Canadian oil will not likely be quenched

CALGARY — The International Energy Agency predicts the US will be capable of meeting its own energy needs by 2035, but that doesn’t necessarily mean its top crude supplier – Canada – has reason to panic.

“The United States, which currently imports around 20% of its total energy needs, becomes all but self-sufficient in net terms – a dramatic reversal of the trend seen in most other energy-importing countries,” the Paris-based group said in its World Energy Outlook.

( See US energy self sufficient by 2035: IEA)

Technological advances have helped unlock vast oil supplies from shale rock formations such as the Bakken in North Dakota and Montana.

The increased output, along with stepped up fuel efficiency measures in the transportation sector, mean US oil imports will wane to the extent that North America will become a net exporter around 2030.

The US is expected to overtake Saudi Arabia as the globe’s top oil producer before 2020 until about the middle of the next decade when the Saudis take back their top spot.

Canada supplied the US with about 2.4 million barrels per day, or 29% of its net oil imports, in 2011, according to the US Energy Information Administration. The next-biggest supplier on that list was Saudi Arabia, with about 1.2 million barrels a day, or 14%, followed by Venezuela, Nigeria and Mexico.

Lanny Pendill, an energy analyst at Edward Jones in St. Louis,, said he doubts US thirst for Canadian oil will be quenched any time soon, no matter how optimistic the domestic production forecasts.

“There’s a big difference between the U.S. being oil independent and being energy independent,” he said.

“Energy is all-inclusive – think coal, nuclear, petroleum, wind, solar, hydro, you name it. The UD becoming oil independent, to me, is a long shot.”

The US oilfields growing most rapidly are mainly churning out light, sweet oil – not the heavy, tougher-to-refine stuff produced in Alberta’s oil sands.

The rub is that refinery complexes in the US Midwest and US Gulf Coast are geared to run heavy crude and are increasingly looking for Alberta supplies to supplant declining ones from Mexico and Venezuela.

“There’s a chance that the US finds itself in a situation where based on the current refinery setup, that there’s a surplus of light sweet. There’s a chance for that, but you still need the heavy that the U.S. is not producing,” said Pendill.

A federal decision is expected shortly on TransCanada Corp.’s controversial Keystone XL pipeline expansion, which would enable significantly more oilsands crude to flow south of the border.

Even still, there’s been a big push for Canada to look beyond the US as an export customer to energy-hungry markets elsewhere in the world, particularly in Asia.