THE ALBERTA OIL SANDS FROM BOTH SIDES OF THE BORDER

The United States produces less than half of the oil it consumes, a dependence unlikely to subside without drastic improvements in domestic production, development of renewable resources, and greater energy efficiency. All three of these actions, even if ultimately meaningful, will take time to produce results, SO the United States is likely to continue to depend on outside suppliers. The most tempting of these suppliers is Canada, especially its massive oil sands in northeastern Alberta Province. In this article I ask why that is true and, more important whether the arrangement is mutually beneficial. The answers are strongly related to location; that is, the location of supply and the location of demand. The view from the south favors Canada above all other countries as a likely source for meeting the growing U.S. oil needs, yet not without accompanying unintended consequences. When viewed from the north, the monetary attraction of the oil sands is weakened by the environmental costs that are likely if their development expands as expected. Weighing these perspectives, the question is whether the combination of demand and environmental concerns leads to, accelerates, or discourages development. Viewing such a prospect from both sides of the border challenges the view that development of natural resources is always inevitable or wise, regardless of apparent profitability and need. Much depends on location.