U.S. gas prices have hit record highs and are still climbing, especially since the U.S. cut off one of its suppliers: Russia. U.S. oil producers have complained for a year that the Biden administration hasn’t made policy moves to encourage more production here at home, instead, lobbying foreign producers like Venezuela and Saudi Arabia. Similar complaints are coming from our oil-rich neighbors to the north in Canada. The province of Alberta, about the same size as Texas, is just as rich in energy resources. Lisa Fletcher reports on their unanswered offer to help.
The following is a transcript of a report from "Full Measure with Sharyl Attkisson." Watch the video by clicking the link at the end of the page.
An energy shock — the likes of which we haven’t seen since the early 1970s.
A combination of rising prices, limited supply, and a sudden war, involving sanctions on major oil producer Russia, leaving the U.S. and other nations scrambling to meet demand.
In the Canadian province of Alberta lies one of the possible answers to America’s energy needs: Canadian oil — and lots of it. Traditional pump jacks dot this landscape south of the city of Edmonton, but as you head north, an entirely different type of deposit is revealed: oil sands, extracted by giant shovels, scooping the earth and sand into trucks where they move it to crushers that process and prepare it for extraction.
Sonya Savage is Alberta’s minister of energy and a former oil executive. She's on a campaign to put her country's oil resources at the disposal of the United States.
Lisa: What can Canada do to help America's oil supply?
Sonya Savage: Here in Alberta, we sit on top of the third-largest reserves in oil in the world, the third largest reserves, and we’re right next door. They should be looking at us as the solution to energy security.
In fact, roughly 60% of America’s crude oil imports already come from our neighbors to the north. In real terms, that means about 22% of the oil used in the United States comes from Canada. And there’s room to grow.
Sonya savage: Right now we have the ability to supply an additional two to 400,000 barrels a day of oil.
That increase in production could more than offset what we had been buying from Russia — until earlier this month.
Biden: Today I’m announcing the United States is targeting the main artery of Russia’s economy. We’re banning all imports of Russian oil and gas and energy.
While the U.S. became the biggest crude oil producer in 2018, we still import oil and petroleum products from around the world, leaving American consumers exposed to the incredible fluctuations in global oil prices, driving costs at the pump up by nearly $2 in the last two years.
Ben Cahill: Even before the Russia-Ukraine war, we had oil prices essentially rise from $60 to $90 a barrel within the space of a couple months.
Ben Cahill is an energy analyst with the Center for Strategic and International Studies in Washington, D.C.
Lisa: This situation that we're finding ourselves in right now — is this an energy crisis?
Ben Cahill: It is an energy crisis. It's definitely one of the most severe energy shocks that we've had since the 1970s. I think this is an all-hands-on-deck situation. The world is looking at a pretty serious supply shock, and we're going to need volumes from everywhere.
The need for oil has led the Biden administration to ask the big oil-producing nations of the Persian Gulf-based-OPEC-cartel to produce more, even if that means buying from some countries hostile to American interests. In Canada, that’s met with frustration.
Lisa: What did you think when President Biden called on OPEC to start supplying more oil?
Sonya Savage: I thought, "What? We're right next door. We're here!" So it's extremely frustrating when we see the United States administration reaching out to Saudi Arabia to ask for more oil production, to ask OPEC for more oil production, to look at Iran, to look at Venezuela, when we're right next door here in Alberta. They should be looking at us as the solution to energy security, not around, not Venezuela.
The growing energy crisis has also led to an unexpected change from the White House.
Ben Cahill: I think America is trying to drum up supplies wherever we can. There was a big energy conference in Houston; Energy Secretary Jennifer Granholm was there. Her message was that we need to have more domestic oil production. That was a pretty big pivot for the Biden administration.
Especially considering the administration is focused on climate policy, cancelled a key U.S.-Canada oil pipeline, and put limits on some drilling.
Production in the U.S. has been rising, but it’s happening slowly. In the past week, the U.S. added 13 new oil rigs, 12 of which are in Texas, bringing the nation’s total to 663 — still well below the pre-pandemic level of nearly 800. Even so, the U.S. remains the number one producer of oil in the world.
So, how is it possible that the U.S. faces an energy crisis when it’s been so-called "energy independent" since 2019, exporting more oil and petroleum products than it imports?
Ben Cahill: I think the term "energy independence" is pretty misleading. It's kind of a misnomer. The fact is that the United States is linked with a global market for oil, natural gas, petroleum products. We import and we export. It's a very complicated system. The United States produces a lot of light sweet crude, but the refining system in the United States was built to process heavier stuff. So we tend to take imports from other countries. We export some crude volumes. The United States has become a big exporter of natural gas, but the reality is global oil market conditions affect us here in the United States, and the prices that we see at the pump reflect global oil market conditions. The goal should really be about energy security.
Here in the provincial capital, Edmonton, leaders believe that idea of energy security, only working with trusted allies, is perhaps the best reason to buy Canadian.
Lisa: What lessons should people take from the events of the last few weeks with oil and gas prices rising and oil supply being in question?
Sonya Savage: I think the takeaway lesson is that energy security, affordability, and reliability matters, and it matters a lot. You need a secure, stable source of supply coming from a country that you have good trading relationships, that it's reliable. If you don't look at energy security, you're going to be looking at supply from places like Russia, Iran, Venezuela, places where we know we should be weeding out those barrels, not increasing their production.
But increasing production both in the U.S. and in friendly nations like Canada takes time.
Lisa: Typical timeline, if we were to tell Canada today we want them to increase, how long does it take for that to actually happen?
Ben Cahill: You can have pretty quick turnaround times when prices are high and there's a strong signal to invest, but it doesn't happen overnight. From the time that you take an investment decision to ramp up capital expenditures, it might take six months or eight months or more to get that going, so it's not a light switch.
It all means the high prices are set to stay, even as our northern neighbor pushes production.
Sharyl (on-camera): Did the White House say why they're not going to Canada for more oil?
Lisa: We asked. They haven't responded.
Sharyl: Could we keep all of the oil that we produce, since we're the number one producer in the world, and not export any, and then have enough?
Lisa: Not really. It's because there are so many different products made from oil. So, for example, our refineries are really good at making diesel, more than we need, so we export that. But they're not as ramped up to make as much gasoline as we use, so we get that from other nations. Every expert we talked to said we're probably always going to buy some petroleum products from other nations, including Canada.
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