Question of the Month: How much Canadian oil and gas are imported into the Midwest?

Stateline Midwest Vol. 20, No. 7: July / August 2011

The U.S. is a net energy importer in terms of oil and gas trade with Canada. Canada’s energy exports to the United States were valued at $76 billion in 2009, while U.S. exports to Canada were valued at $11.5 billion.

Canada provides 21 percent of U.S. crude oil imports (nearly 2.5 million barrels a day) and 87 percent of U.S. natural gas imports. This trade relationship is important in the Midwest, where a large amount of Canadian oil and gas is refined, processed and/or used.

Illinois imports more crude oil from Canada than any other state. Much of the heavy crude is refined in Illinois before it is consumed there or in other states. Minnesota and Ohio are the second- and third-largest crude oil importers in the region.

In 2007, Canada was the top energy exporter to five states in the region: Illinois, Iowa, Minnesota, North Dakota and Ohio. Several factors cause the wide variation in Canadian energy imports to the 11 Midwestern states (see table for data).

With natural gas, for example, the number of pipelines, along with the location of pipeline hubs, accounts for some of the differences. Crude oil imports vary due to differences in the refinery capacity of different states, as well as the capability of those refineries to process Canadian crude.

Canada’s proven oil reserves of 176 billion barrels are second only to those of Saudi Arabia. Most of the reserves are contained in the province of Alberta’s oil sands — the third-largest proven oil resource in the world.

In addition to the 170 billion barrels of recoverable oil in the oil sands, another 315 billion barrels can potentially be captured, but recovery is either too costly or not possible with existing technology.

Oil sand is a mixture of sand, clay or other materials, along with water and bitumen. Bitumen is heavy, extremely viscous oil that must be treated and transformed into a less viscous product in order to be usable.

Oil-sands oil has come under criticism because of environmental concerns, including the emission of greenhouse gases during the recovery process.

The Alberta government has mandatory greenhouse-gas reduction targets, and now the Canadian federal government is planning to introduce additional regulations this year geared toward reducing greenhouse-gas emissions from oil-sands production.