It is increasingly clear that we are living in a time of peak oil. Current world consumption of oil is 83 million barrels a day– a staggering one billion barrels every 12 days.
There have been very few large new oil deposits found in the last few decades. Production of oil is on the decline in most parts of the world and for every barrel of oil we discover, we now consume three. Many analysts expect world oil production to peak in the next 5 to 10 years.
There are currently 98 oil producing countries in the world, of which 64 are thought to have passed their geologically imposed production peak, and of those 60 are in terminal production decline. (Strahan, 2007)
At the same time, political instability and war has effected access to oil reserves in most of the rest of the world: Saudi Arabia, Iran, Iraq, Kuwait, Abu Dhabi, Venezuela, Russia, Libya and Nigeria. Compared to these regions, Alberta offers a markedly stable investment climate, both politically and economically.
Global eyes are truly on Alberta.
While US domestic production has been on the decline since 1970, demand has been increasing. In 2004, the United States consumed 15 million barrels per day of imported crude, and their consumption is expected to increase to more than 22 million barrels a day by 2025. While the oil sands could supply all of Canada’s petroleum needs for the next 475 years, it will only be enough to supply all of North America’s unquenchable consumption for the next 48 years.
With new pipelines being installed straight south, it is clear that the home for most of the oil being recovered from the oil sands is in the US. As Paul Chastko comments,
Given the active participation of the U.S. multinationals in the Canadian oil industry, the proximity of the U.S. export market for Canadian crude, and the American influence over the world petroleum market, any discussion of the development of the oil sands must acknowledge the crucial role played by the United States. (Chastko, xvii)
The US has been vocal about seeing Canada as a ‘friendly ally’ in keeping North America afloat with the crude oil from Alberta.