Jobs & the Economy

Canadian oil sands development is responsible for significant job creation not only in Canada, but also in the United States.  According to a 2011 study by the Canadian Energy Research Institute (CERI), production of the Canadian oil sands currently supports 80,000 jobs and has the potential to add another 500,000 jobs by 2035. The graph below from the Canadian Energy Research Institute demonstrates that the completion of announced and proposed pipelines would facilitate the creation of these jobs.[1]

Economy

The Canadian oil sands industry is a boon to the U.S economy.  At least 2,400 American companies from 49 states are already involved in the development of Canada’s oil sands.[2]  A variety of American companies manufacture equipment and products that are then used in Canada for oil production – everything from engines made in Indiana to tires made in South Carolina.  U.S. refineries have been increasing their capabilities to refine heavier, more energy-intensive crude oils for decades and these projects are providing well-paying jobs for thousands of Americans. In addition, U.S. dollars sent to Canada to purchase energy resources can end up back in the U.S. through the purchase of finished products and other American goods.  

For every dollar the U.S. spent on imported goods in 2011, this is how much returned through exports:

Source: US Census Bureau and Statistics Canada

According to Charles Ebinger, Director of the Energy Security Initiative at Brookings, “Increased domestic oil production, coupled with growing imports of Canadian oil sands, would result in a reduction of non-North American oil imports, leading to a significant improvement in the country’s yawning trade deficit.”[3]

Given the existing pipeline capacity out of Western Canada, oil sands projects will add $30 billion to U.S. GDP between 2010 and 2013, according to the Canadian Energy Research Institute (CERI). If construction of the Keystone XL had commenced beginning in 2011, that number would have increased to $33.7 billion. Once the Keystone XL is constructed, projects initiated to fill its capacity have the potential to contribute as much as $7.7 billion to GDP per year.[4]

Supply

The United States needs more supply of all types of energy, including oil, to meet our growing energy demand. As world demand for oil significantly increases, Americans could face significantly higher oil prices unless we have adequate supplies of oil. According to recent EIA projections, even doubling the amount of renewable energy consumed in the U.S. would not be enough to match current oil consumption rates.[5]

Canada is the number one supplier of imported oil to the United States, contributing approximately 22 percent of total U.S. oil imports.[6]  That translated to 2.4 million barrels per day of crude oil and products to the U.S. in 2011, or more than twice as much per day as our second largest supplier of imported oil.[7] Resources from the Canadian oil sands alone could potentially account for as much as 36 percent of U.S. oil imports by 2030.[8]


According to the Canadian Association of Petroleum Producers (CAPP), oil sands now account for half of Canada’s total oil production. By 2025, production is expected to rise from about 1.4 million barrels per day to about 3.5 million barrels per day. The Canadian oil sands region provides plentiful energy resources and has the potential to increase fuel supply reliability to the United States and price stability to consumers.[9]



[1] Canadian Energy Research Institute (CERI), Economic Impacts, June 2011
[2] House Committee on Foreign Affairs, Hearing: “changing Energy markets and U.S. National Security, 16 Dec 2011
[3] Ebinger op-ed in the Los Angeles Times, 28 Nov 2011
[4] CERI Economic Impacts Study , June 2011
[5] EIA, Energy Consumption by Primary Fuel, 23 Feb 2012
[6] EIA, Canada Analysis, April 2011
[7] EIA, AEO 2011 data
[8] IHS CERA, The Role of Canadian Oil Sands in US Oil Supply, May 2010
[9] CAPP, The Facts About Oil Sands, Oct 2011