June 27, 2019 at 5:00 am ET
The American oil and gas industry has grown rapidly over the last decade, establishing itself as an undeniable powerhouse in the global energy race. Now the world’s leading producer of oil and gas, the United States is more fully in control of its energy security than at any other point in the past century.
Domestic production alone, though, doesn’t tell the full story when it comes to the American energy outlook. Energy is a global commodity, and the United States is — and will continue to be — an active participant in the global energy market. As domestic supply and production have expanded, the United States’ ability to export oil and gas has grown, sparking economic growth and driving an enhanced ability to boost allies and trading partners through the sale of energy resources.
One of those allies is Canada. The scale of our oil and gas trade with Canada speaks to the importance of the relationship: About 13 percent of all petroleum products exported by the United States go to our neighbors to the north, a total of almost a million barrels every single day.
American resources play an important role in Canada, but it’s far from a one-way street. Canada is also by far the United States’ single largest supplier of imported oil and gas. Forty-three percent of American oil and gas imports come from Canada. It’s an eye-catching number, but it should come as no surprise given our close trade partnership, geographic proximity and the simple fact that Canada boasts the third-largest crude reserves in the world.
North American energy security, in other words, is deeply interconnected. This is a very good thing for the United States, Canada and Mexico — another leading source of both imports and exports for American oil and gas. But this deeply beneficial interconnectedness also means that the challenges facing one nation’s energy sector are more than capable of impacting another’s energy outlook.
For a case in point, look no further than the pipeline capacity shortage currently weighing on Canada’s oil industry. Despite being home to massive reserves and production, chronic failure to build new pipelines capable of supporting the nation’s output has created severe drag and constraints on the industry’s ability to grow and, more importantly, ship needed resources to consumers and trading partners alike. It’s a serious problem, and experts project it will cost Canada nearly $21 billion in 2019.
If this sounds familiar, it’s because Canada’s pipeline problems are rooted in the same cycle of protest and delay that has plagued American pipeline infrastructure for the last decade or more.
The poster child for this institutionalized protest campaign is the Keystone XL pipeline. The project became one of the most hotly contested political issues of the 2010s in the United States, and while the debate took on a decidedly American feel as political football during presidential campaign season, it’s important to remember that the entire point of the line is to move abundant Canadian oil across the border into the United States. The battle continues to this day, and more legal challenges are sure to come.
Keystone XL is far from alone. In Canada, thousands of environmentalist protesters turned out for a rally aimed at halting progress on the Trans Mountain Pipeline just ahead of an expected decision on the project by Prime Minister Justin Trudeau. With Enbridge’s Line 3 project also delayed, producers could face shipping limitations — on both sides of the border — for the foreseeable future.
As always, the irony — or tragedy — of opposition to expanded pipeline infrastructure lies in the simple fact that modern pipelines represent the most economical, efficient and environmentally sound way to transport the resources that power our economy. As protests continue and projects lag, the tremendous advantages offered by North American energy dominance become increasingly more difficult to leverage.
Free, safe movement of oil and gas resources is essential to continuing to realize the many benefits of the interconnected North American energy economy. As the United States and North America at large adjust to new energy production and transportation dynamics, we owe it to ourselves and to our future to commit to the expansion of modern pipeline infrastructure.
Craig Stevens, a former senior adviser to U.S. Energy Secretary Sam Bodman, is the spokesman for Grow America’s Infrastructure Now, a national coalition focused on promoting key infrastructure investments.
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