Latin oil supplies for U.S. start to dry up

[Geee]

Washington Times:

The political and environmental debates swirling around the proposed $7 billion Keystone XL pipeline from Canada to Texas miss a crucial point, energy analysts say: The Canadian oil is needed to replace fast-dwindling production from two other major suppliers of oil - Mexico and Venezuela.

The United States remains the largest consumer of oil in the world, requiring more than 8 million barrels a day of fuel imports to feed its appetite, with nearly half of that coming from oil-rich neighbors in Latin America as recently as 2005.

But oil production south of the border has fallen off dramatically, and Canadian crude in recent years quietly overtook imports from Mexico, Venezuela and even Saudi Arabia to become the most important outside source of oil for the U.S.

The trend toward replacing unstable sources of oil in Latin America and the Middle East with reliable and friendly sources in Canada was heartily welcomed in political circles until the pipeline controversy broke out last year. After trying to delay a decision until after the presidential election, the White House agreed in a compromise with congressional Republicans to determine within the next two months whether to proceed with the pipeline.

Because nearly all of Canada’s production will come from the Alberta tar sands served by the Keystone pipeline, energy analysts say, the pipeline extension will be needed to ensure that promising trend continues and that the U.S. does not go back to relying inordinately on unstable and hostile suppliers.

“As traditional supplies of heavy crude from countries such as Mexico and Venezuela decline, Canadian oil sands become more important,” said Lucian Pugliaresi, an analyst with the Energy Policy Research Foundation Inc. Canada ships about 2.5 million barrels a day of crude to the U.S., more than twice as much as Mexico and Venezuela combined.