Canadian Oil Sands
Is there a connection between the Iowa economy and energy produced in Canada?
Yes, in the form of Canadian Oil Sands.
Overview
Oil from Canada is in such abundance it can provide the United States with nearly 170 billion barrels of oil and remain our nation's biggest supplier of imported oil.
Unbeknownst to many Americans, Canada is America's leading supplier of imported oil, and oil sands from Canada provide a major portion of this supply. Oil sands are naturally occurring mixtures of sand, clay, water and a form of petroleum called bitumen—which can be upgraded for synthetic crude oil and refined to make asphalt, gasoline, jet fuel and some chemicals. It is estimated the country has nearly 170 billion barrels of oil sands and over time, Canada could increase production from its current 1.4 million barrels per day to approximately 3.5 million barrels per day in 2025.
Stable Energy Supply for Iowa
To put the above statistics in perspective, Iowa uses more than 83 million barrels of oil annually to fuel its energy requirements.
The biggest value of Canadian oil sands to Iowa is contributing a stable source of energy. This is critical because many of the state's industries, which provide jobs for thousands of Iowans and millions in revenue, rely on oil for operations. For example, Iowa’s agriculture industry, a major source of revenue and jobs for the state, uses oil for heavy equipment (e.g., tractors, combines, mowers, balers), irrigation, harvesting, transportation, and indirectly for supplies such as pesticides.
But rising energy costs threaten the livelihood of businesses in this industry by putting a heavy burden on expenses. When energy costs rise, the state sees a higher rate of loan extensions, an increased number of operating loans and more requests for state-assistance programs to alleviate the fiscal burdens.
Thus, greater access to stable supplies of energy from Canadian oil sands would translate into more cost-effective operations for Iowa's agriculture industry, and allow farmers to grow their businesses and add jobs. This same effect could propagate across other industries in the state that rely on oil, as well as to other states - increasing the nation's overall energy and economic security.
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