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Canada, not Venezuela, the solution for U.S. energy security

Why is Biden negotiating with a hostile and oppressive government?
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Canada and the United States are close allies sharing a vast, interconnected energy system that reliably supplies the United States with the majority of its oil imports.

The United States needs long-term solutions to replace energy imports from Russia.

 But rather than working to fast-track increased oil deliveries from Canada, among other negotiations, the administration of President Joe Biden is reportedly in talks to ease sanctions on Venezuela, where the government stands accused of a litany of human rights abuses.

The United States has restricted oil from Venezuela since 2019 as part of a bid to pressure authoritarian leader Nicolás Maduro to leave power.

Meanwhile, Canada and the United States are close allies sharing a vast, interconnected energy system that reliably supplies the United States with the majority of its oil imports.

Biden should look to Canada to improve U.S. energy security instead of negotiating with a hostile and oppressive government.

Here’s why:

Venezuela’s government is accused of harming its citizens

Venezuela “is facing a severe humanitarian emergency” under Maduro, according to Human Rights Watch. In late 2021, the International Criminal Court opened an investigation into Venezuela’s possible crimes against humanity.

“The exodus of Venezuelans fleeing repression and the humanitarian emergency represents the largest migration crisis in recent Latin American history,” Human Rights Watch said in its World Report 2022.

The and its security forces are responsible for offences – including jail sentences, “forced disappearances,” and executions outside the justice system – against their opponents, Human Rights Watch says.

Because of poor governance, innocent Venezuelans are suffering.

The World Food Programme estimates that one in three Venezuelans is food insecure and in need of assistance. UNICEF reported that 5.8 per cent of children screened between January and June 2021 had acute malnutrition, including 1.5 per cent with severe acute malnutrition.

UNICEF also reported that as of September 2021, 73 per cent of Venezuelans didn’t have continuous access to water.

Venezuelan oil worse for environment and world

Venezuela and Canada are both home to vast deposits of heavy and extra-heavy oil – the kind consumed primarily in the massive U.S. Gulf Coast refining cluster.

Canadian heavy oil has helped replace declining imports from Venezuela amid what IHS Markit in 2020 called “decades of decline and decay.”

The pipeline would have been a direct bullet line to the U.S. Gulf Coast from Alberta. But Biden cancelled the project within hours of taking office, based on Canadian oil’s perceived impact on climate change.

There is evidence that Venezuelan oil can have a greater emissions footprint and, unlike Canada, little evidence that Venezuela is working to make improvements.

Limited data is available on emissions per barrel or total emissions from Venezuela’s oil industry. But some insight comes from a respected 2018 study led by researchers at Stanford University.

They found Venezuela’s emissions per unit of oil to be higher than Canada’s on average (20 grams of CO2 equivalent per MJ of energy compared to about 18 gCO2e/MJ).

Researchers also found that in terms of the range of emissions intensity, the high end for Venezuela was much more than in Canada (about 32 gCO2e/MJ versus about 23gCO2e/MJ).

They noted that Canada was one of just a handful of countries with “higher quality data,” meaning that their estimate for Venezuela is likely incomplete.

The study also uses data from 2015 and significant progress has since been made in Canada to reduce emissions intensity.

In Canada’s oil sands, where most of the country’s oil is produced, average reported emissions per barrel decreased by 27 per cent since 2013, according to BMO Capital Markets.

And according to a by consultancy IHS Markit, total oil sands emissions – not just emissions per barrel – are on track to start decreasing in the next five years, even as production continues to grow.

But as the energy crisis spurred by Russia’s invasion of Ukraine shows us, environmental performance is not the only metric by which oil producers should be measured.

Consider environmental, social and governance (ESG) ratings, which account for a variety of metrics including greenhouse gas emissions, water use, Indigenous engagement, worker safety, diversity and inclusion, and regulatory processes.

Of the world’s largest oil reserve holders, Canada ranks number one in ESG performance while Venezuela ranks 17, according to BMO’s analysis of global databases.

The United States will require oil imports for decades to come

Imports of oil and oil products will be critically important to the United States long into the future, even as more renewable energy comes online, according to the U.S. Energy Information Administration (EIA).

 

EIA data shows that the U.S. imported about 6.5 million barrels per day in 2021. That’s projected to rise to 7.3 million barrels per day in 2030 and eight million barrels per day in 2040 before dropping modestly to 7.5 million barrels per day in 2050.

In 2021, more than 50 per cent of U.S. imports of crude oil and petroleum products came from Canada. The recently-completed Line 3 Replacement Project helps strengthen this energy security. The cancellation of Keystone XL does not.

Canada is the clear choice over suppliers like Venezuela to meet U.S energy needs, as a trusted ally with shared values and goals on reducing greenhouse gas emissions.

Deborah Jaremko is director of content for the Canadian Energy Centre, an Alberta government corporation funded in part by taxes paid by industry on carbon emissions.

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