Oh Canada! Conservative Pro-Business, Anti-Tax Party Takes the Helm, Largest Supplier of Oil to U.S. will Not Block Northern Gateway Tanker Traffic.

Why both nations have the ability to stimulate economies quickly...

Canadians held elections on Tuesday, putting the conservative Tories Party firmly in control of the government. According to Reuter’s, Prime Minister Stephen Harper, now has a Party majority in the Canadian Parliament, and plans on moving forward with a pro-business agenda, starting with oil.

Canada’s oil industry should benefit – The oil sands industry has “massive resources” in Alberta, and has realized a “surge in income” with rising crude prices (Globe and Mail).

Canada, according to the Reuters report, is the largest exported of oil to the U.S., and interestingly, there are seven provinces where oil and natural gas are produced.
U.S. Domestic Production in Alaska, has been stalled by the EPA, and although the U.S. has imposed bans on drilling, an article form Institute for Energy Research.org notes that other oil producing countries are not following suit – including Mexico, China and Cuba, with the later drilling within 40 miles of the U.S. Coast.

The largest Oil Producing States in the U.S. are Texas, North Dakota (who’s recent surge in crude production places is bound to overtake production in both) Alaska and California (Alaska Daily News).

Understanding that between the Canadian and the hampered U.S. oil Industry, (which is capable of being self-sustaining), the need for importing crude from the Middle East is questionable. Should the U.S. bans on drilling (offshore, shale fields etc.) be lifted or modified to allow for production, and should the U.S. invest in more refineries, the price per barrel would fall dramatically. Referring to the pre-2008 election in the U.S. when oil prices had skyrocketed (not as severely as today) several Texas Republican House Members stayed in session while the Democrats under Nancy Pelosi’s leadership, shut down the house, and literally shut off the lights, as the days then weeks went on, the Speaker called the house back into session, and began discussions on lifting of oil drilling bans. The result, within a week, prices has fallen, based on the speculation that oil would be flowing through the U.S.

What the Canadian’s apparently understand is business and national survival are part and parcel, while the United States is, at the present time, apparently less concerned about the price of gasoline pushing past $5.00. Although Canadians do pay more for gasoline, it is, one would suggest, a lack of refineries in both nations that presents the biggest problem. Though one can hardly blame those in the oil industry who would build more refineries, as the ability to drill for oil, and then refine and shore up supplies of gasoline (driving down the cost at the pump), may not be in their financial best interest given the fickle nature of the governments ban on drilling, when the mood suits - the fact remains we need more refineries online.

As the U.S. focuses on “Green Businesses”which are yet proven to be capable of meeting consumer demands, We currently have 137 oil refineries online (EIA.DOE.gov), and the only new refinery planned (or funded by the U.S. Government) is in Columbia (the nation to our south) Apparently, no new refineries have been built in the U.S. Since 1976 and without the ability to refine the oil into gasoline and other products, the prices will remain sky high.

Canada, however is not standing still, with the latest planned refinery in Edmonton approve this year, as they have far fewer refineries than the U.S. at 10 total,one would think that between the two nations oil supplies, it would behoove both to boost refinery capacity in order to really stimulate the economies – instead of laying off refineries and exporting the oil elsewhere: as of 2008, the U.S. was exporting 1.8 million barrels ad day.

More drilling, more refineries, less exports, more domestic stimulus – Perhaps our Northern Neighbors will get it right, and in some perfect universe where the EPA and the minds of the Congress and a pro-economy Executive branch meet, so will the U.S.