CALGARY, Alberta (Reuters) - Depending on how one runs the numbers, President Barack Obama is well on his way to chopping U.S. oil imports by a third.
The question is which imports his administration will cut, given that oil-supply trends in the world’s largest energy consumer have already shifted. The reductions are unlikely to be from Canada.
In a speech on Wednesday in Washington, D.C., Obama reminded Americans of the danger of dependence on foreign oil, and mentioned Canada as being among his country’s partners in its quest for energy security. With good reason.
Canada is the largest supplier of oil to the United States and one of its closest allies. Pipeline-connected supply from Canada is often considered more reliable than even U.S. Gulf of Mexico output, which is frequently disrupted by hurricanes.
If Canadian supplies were excluded from U.S. oil and petroleum imports, the numbers would show that U.S. dependence on foreign oil is already dwindling, even though there is no policy to make that happen.
Since 2008, net imports -- which are oil imports minus exports of petroleum -- have fallen 15 percent from the more than 11 million barrels that year. It is a 20 percent decline when Canadian supplies are excluded.
The trend precedes Obama’s election.
Since the high mark in 2005 of a total of 12.5 million barrels a day imported by the United States from its suppliers, net imports have fallen nearly 25 percent and, subtracting the Canadian supply, they have fallen by a third.
Obama said on Wednesday that he wants the United States to cut oil imports by a third over 10 years.
Over the past five years, Canadian oil and petroleum product shipments to the United States have surged 16 percent to 2.5 million barrels a day, according to the U.S. Energy Information Administration, coinciding with massive investments in the vast but environmentally controversial oil sands of northern Alberta.
Saudi Arabian imports have fallen 29 percent over the same period.
Even if Obama achieves his goal, Canadian shipments are bound to keep rising, said Jackie Forrest, an analyst at energy consultants IHS CERA.
“The market is big enough, even with this cut, to absorb all oil sands growth. It doesn’t change that equation,” Forrest said. “It just means that there will be less room for other exporters.”
Indeed, Canada’s overall oil output is forecast to rise as much as 43 percent to 3.9 million barrels a day in the next decade, a figure that is larger than Obama’s goal to reduce U.S. imports by 3.6 million barrels over the same period.
The U.S. initiative comes after Secretary of State Hillary Clinton delayed a decision on TransCanada Corp’s $7 billion Keystone XL pipeline, which would ship more than half a million barrels a day of Canadian crude as far south as the U.S. Gulf Coast.
Environmentalists and some U.S. politicians, who oppose the pipeline’s route across many states as well as increased oil sands development, have called for its rejection. The company contends it would create U.S. jobs and boost energy security.
The Canadian oil industry, which is looking to expand its markets, took Obama’s comments as positive.
“We’ve had a pretty significant series of signals from Secretary Clinton and now from the President, that when the U.S. looks to import oil it would prefer to be reliant on Canada rather than most other suppliers,” said Tom Huffaker, vice president of the Canadian Association of Petroleum Producers.
“It’s not a decision on Keystone XL, but I think it’s a positive signal.”
Additional reporting by Jonathan Leff; Editing by Toni Reinhold and Peter Galloway
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