Shale oil extraction affects global energy outlook
By Helen Surgenor
The United States is poised to be energy self-sufficient by 2035 due in large part to shale oil exploration, according to the International Energy Agency.
“Shale is a big story and it’s going to affect patterns of world oil trade,” Spencer Knipping, oil advisor for the Ontario Ministry of Energy, told Humber News
The agency’s World Energy Outlook report indicates that shale formations throughout the United States can yield oil through the relatively new “fracking” extraction process, the Epoch Times Reports.
LISTEN: Knipping explains the fracking process
For the Canadian oil patch, the prospect of their southern cousins becoming a net oil-exporter is a sign that it’s time to increase trade with other nations, producers warn.
“In the shorter term, it’s going to be tougher for Canada because our main market today is the United States, which of course is becoming more well-endowed in terms of its crude oil supply,” Mark Penney of the Canadian Association of Petroleum Producers said in a telephone interview from Calgary .
With recently- announced plans to triple output from the Alberta’s oil sands by 2035, Canadian producers must find more world customers regardless of the challenge posed by the United States, Knipping said.
“Their production plans exceed the capacity of what the refineries in the U.S. can use,” he said.
“So they’re going to have to send their bitumen—the additional volumes that are going to be produced over the next 10 to 15 years—to other markets other than the U.S.”
Knipping and Penney agree that increased U.S. shale oil production doesn’t necessarily signal the end of the north-south Canadian oil trade .
Oil extracted from shale formations is the more desirable, light crude oil. And while the bitumen that comes from northern Alberta is considered heavy crude oil, refineries along the American Gulf Coast have already invested in heavy crude-refining equipment.
“I think there’s definitely a key role for Canada to play in meeting the United States’ demand for crude oil,” said Penney.
“Even in this scenario here, I like to think we can actually grow our exports to the United States.”