North America is an integrated energy market so deeply connected that it functions as one massive, interdependent system for the three “drillbit hydrocarbons”: crude oil, natural gas and NGLs. But the rapid changes happening in the market now — driven not only by supply/demand dynamics and evolving infrastructure but also regulatory policies and political pressures — mean it’s more important than ever to talk about how the ongoing relationship between the U.S. and Canada will evolve and strengthen in the coming years. That was the focus of our School of Energy Canada and the subject of today’s RBN blog. Warning: Today’s blog includes some blatant plugs for a newly available replay of our recent conference in Calgary.
Our theme for this year’s School of Energy was “Two Countries, One Market,” and we started Day 1 with a detailed look at crude oil fundamentals. The U.S. and Canada have each seen crude production increase sharply over the past 15 years. U.S. production (left side of Figure 1 below) has grown from less than 6 MMb/d in 2011 to more than 13 MMb/d this year, while Canadian production (right side) has risen from about 3 MMb/d to about 5.5 MMb/d today.
Figure 1. U.S. and Canadian Crude Oil Supply and Cross-Border Flows. Source: RBN
Despite the continuous rise in U.S. production, crude oil flows from the U.S. to Canada (top graph in middle section of Figure 1) haven’t changed all that much in the last few years. Most of the crude the U.S. sends to Canada comes via waterborne tanker from the U.S. Gulf Coast up to terminals in Montreal or New Brunswick. On the other hand, most of the growth in Canadian production has been in heavy-sour crude, which is well-suited for complex refineries in the U.S. Midwest and Gulf Coast, and those cross-border flows are up significantly from 2011 — doubling over the past 14 years (bottom middle graph).
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It's a similar story for the natural gas and NGL markets, with surging production and largely stable cross-border flows making each country heavily dependent on the other. For the U.S. and Canada, the oil, gas and NGL markets are completely and inextricably intertwined, and rely on each other to help balance regional supply and demand, and what happens in one market will directly affect the other. The U.S. and Canada form a global powerhouse in energy markets that will continue to fuel prosperity in both nations.
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About the song
“Two of Us” was written by Paul McCartney and credited to the songwriting team of Lennon/McCartney. Recorded in January 1969 at Apple Studio in London, the song appeared as the third song on side two of The Beatles 12th and final studio album, Let It Be. It was Lennon doing the spoken word intro to the song, with a reference to Charles Hawtrey, who was a British comic actor. Personnel on the record were: Paul McCartney (lead vocal, lead acoustic guitar), John Lennon (co-lead vocal, rhythm acoustic guitar), George Harrison (bass line on Fender Telecaster guitar), and Ringo Starr (drums, percussion).
Let It Be was recorded at Apple Studio, EMI, Apple Corps’s rooftop, and Twickenham Film Studios in London in February 1968, January 1969, and January through April 1970. Production duties were handled by George Martin and Phil Spector. The Let It Be album was made in conjunction with the motion picture of the same name, documenting The Beatles going back to their roots in the studio. It was released in May 1970, a month after the official announcement of the breakup of the band. It went to #1 on the Billboard Top 200 Albums chart and has been certified 4x Platinum by the Recording Industry Association of America. Three singles were released from the LP. An alternative version of the album, overseen by Paul McCartney, called Let It Be ... Naked, was released in November 2003. It featured new mixes of the songs and removed most of Phil Spector's embellishments. It went to #5 on the Billboard Top 200 Albums chart.
The Beatles were an English rock band formed in Liverpool in 1960. The core lineup of John Lennon, Paul McCartney, George Harrison and Ringo Starr would go on to change the direction of modern music and pop culture. They released 17 studio albums, five live albums, 52 compilation albums, 36 EPs and 63 singles and have sold more than 600 million records worldwide. They have won an Academy Award, seven Grammy Awards, 15 Ivor Novello Awards and a Lifetime Achievement Grammy Award and are members of the Rock and Roll Hall of Fame as a group and individually. In 1965, Queen Elizabeth II appointed each member an MBE. Paul McCartney and Ringo Starr have been knighted. The Beatles were featured in four motion pictures and 10 documentaries. John Lennon was assassinated in 1980 and George Harrison died in 2001. Paul McCartney and Ringo Starr continue to record and tour as solo artists. Paul McCartney will be on his Got Back Tour in the U.S. and Canada this fall and Ringo Starr will be on his Ringo Starr and His All Starr Band Tour in the U.S. in September.
