Gary Mar to Congress: oil sands will create 624,000 jobs in US

Alberta’s representative in Washington, Gary Mar, testified to the US House Committee on Energy and Commerce at a Feb, 10 hearing entitled: “The Effects of Middle East Events on US Energy Markets”

While  Mar made the usual Alberta/Canada pitch about the security of Canadian energy supplies, he also made the case of oil sands as “technology oil” that will create US jobs — a point that seems to be mentioned by advocates of oil sands in Washington more and more often. From Gary Mar’s testimony to the House Energy and Commerce Committee:

Oil sands is “technology oil” and its development makes extensive use of U.S. products, technologies and expertise, creating a significant number of jobs throughout the U.S.  A recent study by the Canadian Energy Research Institute (CERI) estimated that over the next 15 years, the development of Alberta’s oil sands will boost U.S. GDP by an average of $31 billion per year, creating over 624,000 jobs in the U.S., just over half of which will becreated in the next four years.

He also provided a chart with economic benefits broken down by state (page 10 of testimony). Mar also made Alberta’s case on issues such as water and greenhouse gases.

As the US State Department considers whether to permit TransCanada’s proposed Keystone XL pipeline from Alberta to Texas, Rep. John Shimkus (R-IL) also made the jobs argument:

Shimkus: There’s no bigger job creator in the state of Illinois right now than this pipeline and the direction straight to the Wood River Refinery, which is right outside my district. Two billion dollar pipeline, $2 billion expansion of a refinery, the jobs. Of course, another great Illinois company, Caterpillar, is being used extensively up there. (…)  And if we don’t do this pipeline, that pipeline could go west and guess where? To China, which is part of our debate yesterday, whether we want to create jobs in China, or whether we want to create jobs in the United States.

In his opening remarks, the chairman of the House Committee on Energy and Commerce, Fred Upton (R-FL), said:

Events in that part of the world can disrupt oil production, or in the case of Egypt, jeopardize the transport of that oil to end users.    The stronger the global demand for oil, and the smaller the cushion provided by spare capacity, the more likely any actual or threatened disruption of supplies will destabilize markets and elevate prices.

Fortunately, not every oil-producing nation carries with it these challenges.   In fact, America’s single greatest source of oil imports is our great ally Canada.  Of course, any additional oil production helps keep prices down, but production that comes from a reliable source like Canada also serves as a calming influence on world markets.

According to a recent study conducted for the Department of Energy, the Keystone Pipeline project could “very substantially reduce U.S. dependency on non-Canadian foreign oil, including from the Middle East.”   And construction of the pipeline would create jobs to boot.   Unfortunately, a number of environmental organizations are pressuring the administration to say no to a project most of us consider a no-brainer.

Upton also asked Mar how much of the planned increase in oil sands production (from one million barrels per day to an estimated 3.3 million in 2019) would go to China if Keystone XL is not built.

Upton: What is likely to happen if the U.S. doesn’t permit the Keystone Pipeline to be built?

Mar: We will continue to use existing pipelines.

Upton: What will happen to the bulk of that new production?

Mar: There has been investment by many companies from around the world. Not just American companies are invested in the oil sands. State-owned enterprises from China have invested themselves in the oil sands. Stat Oil Hydro of Norway…

Upton asked how much of future production increases would go to China if the Keystone XL pipeline is not built. Mar gave an estimate of over one million barrels a day, if a proposed Enbridge pipeline gets built to the West Coast:

The proposed Gateway pipeline would have the capacity to take 525,000 barrels a day from Alberta to the West Coast. A proposal for oil by rail has the capacity to take an additional 200,000 barrels a day. And the currently existing Kinder Morgan trans-mountain pipeline has a current capacity of 300,000 barrels per day, which would be a total of just over a million barrels a day , total. There is currently also a proposal to expand Kinder Morgan pipeline. So  that gives you some sense of the volumes that could be moved to the West Coast.

The bulk of the hearing was devoted to the issue of domestic drilling, and domestic regulation but there were a few exchange on oil sands. A Democrat,  Rep. Gene Greene of Texas, also spoke in favor of the pipeline:

The frustrating thing is — you know, I have a district in Texas — we need to — I have five refineries, and we need the crude oil. If we don’t get it from the Gulf in all the fracking we can do — we get very little oil from the fracking, although there’s some great things going on in South Texas and the Florida shale, but still not enough. So that’s why the Canadian pipeline is important, because we need that crude oil.

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