As unrest in Libya, Saudi Arabia and other Middle Eastern countries continues to put pressure on the price of oil, the head of Imperial Oil Ltd. is backing a multi-billion-dollar pipeline expansion to bring Canadian oilsands crude to U.S. markets. The Wall Street Journal reports:
A pipeline project that's pending U.S. approval is necessary to ensure the reliability and security of oil supplies to the world's largest oil consumer, the head of Imperial Oil Ltd. (IMO) said.
Imperial Oil is a Canadian company majority owned by Irving, Texas-based Exxon Mobil Corp. (XOM), the world's largest publicly traded oil company.
The Keystone pipeline system currently transports roughly half a million barrels a day of oil from Canada's oil sands to the U.S.'s biggest commercial storage hub in Cushing, Okla. A multibillion-dollar expansion project, dubbed Keystone XL, envisions another pipeline that would double the system's oil flows from Canada, the No. 1 oil exporter to the U.S. Keystone XL would also see the pipeline extend to the Gulf Coast, which would give Canadian oil producers better market access to the largest refining hub in the U.S.
Imperial Oil CEO Bruce March noted that Canada, with its "strong and safe" democracy, represents half of the global oil reserves that are open for private-sector investment.
"That is an enormous driver, for countries, for companies… Really, for anyone that looks to meet their growing energy needs," March said in an interview Tuesday on the sidelines of the annual IHS CERA energy conference in Houston.
March's comments highlight the importance of Alberta's oil sands, not only for Canadian oil companies, but also for oil giants that see the region as the one of the last few opportunities for relatively easy access to profitable crude oil.
They also come at a time when the turmoil in Libya and subsequent disruption to oil supplies there have exposed the U.S. economy's vulnerability to rising oil prices.