Skip to main content


The U.S. petroleum industry is touting the development of Canada's oil sands as a boon for the American economy and the source of some 343,000 jobs south of the border, as it battles climate change legislation that could hammer crude imports from Alberta.

The American Petroleum Institute, which represents oil sands heavyweights like Exxon Mobil Corp. and Royal Dutch Shell PLC, has long argued the oil sands represents a secure source of oil for the United States.

Now it is making the economic argument that the Alberta development represents one of the largest construction projects in North America - requiring $379-billion (U.S.) in investment over the next 14 years - with benefits flowing on both sides of the border.

"Clearly, Canadian oil sands development is a win-win for both Canada and the United States," said Jack Gerard, the institute's president.

The Washington-based lobby group commissioned a report about the effects of oil sands expansion in the U.S. from the Calgary Energy Research Institute (CERI), a non-profit research body that receives financial support from the Canadian-based oil industry and several provincial and federal governments.

CERI projects oil sands production should climb from 1.2 million barrels per day currently to about four million barrels a day by 2020. Between now and 2025, the industry is expected to invest between $20-billion and $30-billion annually to build the additional capacity, it states.

While most of that money will be spent in Alberta and other provinces, particularly Ontario, the report says U.S. companies would benefit from higher overall economic activity in Canada, as well as direct purchases of capital equipment and financial services from the Alberta-based oil companies.

It forecast the oil sands development would add $40-billion to the U.S. economy by 2020.

"The oil sands reserves play an increasingly important role in the economic development of Alberta, Canada and the United States," the CERI report states. "What is often not clearly understood is that the large investment in the oil sands industry contributes to increased economic activity in the rest of North America by stimulating demand for goods and services across a wide range of industries."

It says oil sands projects, which include the largest surface mines in the world, have equipment needs to match. Companies buy steel products from Alberta, Ontario and the U.S., as well as trucks, shovels, hopper cars, conveyor equipment, pumping equipment and some boilers and chemicals. The CERI study does not include the economic spinoffs from investments in new pipelines and refinery upgrades that will be needed to bring the increasing supplies of Canadian crude to U.S. markets.

The U.S. oil industry is fighting to ensure that climate change legislation now before Congress does not impose undue burdens on Canadian oil imports, either through mandates for low-carbon fuels or through emission caps that penalize refiners who process bitumen from the oil sands.

Canadian companies are also battling to head off overly onerous emission regulations in Canada, which, they say, could stifle growth in a key engine of the domestic economy. Critics argue that governments should force the oil sands companies to cover the full cost of production, including the elimination of greenhouse gas emissions that contribute to climate change.

"What good is an economic boom if it drives you over a cliff?" said Rick Smith, executive director of Environmental Defence, a Toronto-based environmental group.

"By so thoroughly hitching Canada's economic wagon to the tar sands, we are missing out on the bigger, longer term economic boom, which is the new green economy. And we're going to end up being the peddlers of a product that nobody wants 20 years from now."

Report an error

Editorial code of conduct

Tickers mentioned in this story