Wouldn’t it make most economic sense to just sell to our own countries in that case if there’s some standardized barrel price?
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Part of the reason as well is that trade in north america is very much north to south and not east to west. Petro products come up to Vancouver from the states since that is geographically more efficient. Canada sends a lot of crude south to be refined and nat gas as well which is then exported. It all depends on the type of product and where it is located. Then it is a big web of pipelines, trains and trucks to move it around.
Oil isn’t just one thing, or even one type of thing. It’s a mixture of molecules called hydrocarbons (made of carbon and hydrogen) which can be refined into fractions based on their size (gasoline, kerosene, lubricating oils, bitumen and so on).
Oils found in different places are made of different mixtures of these fractions so if you need oil to be turned primarily into gasoline, oil from one source might not be as suitable as oil from another.
Lots of different grades of oil and in both countries building new refineries is almost impossible due to environmental stupidity. Not every refinery can refine every oil. This was the big thing with the Keystone pipeline, take heavy Canadian oils sands oil to the gulf where they are designed to refine it and then ship to the international market as opposed to shipping west on trains to tank it elsewhere. Buy Warren Buffett owns trains and Democrats so we couldn’t have that.
All oil is not created equal.
It has to be processed and depending how ‘heavy’ it is, and the impurities, needs specific refining.
Some refineries hand heavy oil well while others are into refining higher quality oil.
Sometimes especially in big countries it makes more sense for one geographic area to import from another country than from elsewhere in its own borders.
This came up when (I think it was) India put a ban on exporting wheat a couple years ago. Economists were explaining that for some regions it might be more expensive to buy and ship wheat from elsewhere in the country rather than importing it from a closer neighbor on a direct route.
[Here’s a picture of all pipelines in North America](https://www.pinterest.ca/pin/574983077426214563/). Only one pipeline goes from Alberta (Canada’s oil source) to the east and it goes from Medicine Hat and not Fort MacMurray. There’s one other west-east line but it passes through the US before entering Canada again.
When we think of Canada’s oil we think of Alberta. But the first oilfield in North America was discovered in Ontario… and it was really really small. As it turned out, most eastern oilfields were quite small. So small that pipeline infrastructure was developed to import oil from Texas… and that was as early as 1920.
Alberta’s first oilfield was discovered in 1947. This is the Leduc #1 Oilfield. And it was huge. Soon after it was found that massive oilfields existed all over Alberta and that this province was sitting on one of the world’s largest oilfields. If they made pipelines heading east they would find themselves in direct competition with Texas who produced a product that was cheaper to make and easier to refine. The Americans also provided a lot of finished oil products that came in these pipelines.
So there was never a financial sense to build pipelines east… when all the customers were to the south. So all pipelines from Alberta traveled south and that’s how it was for a long time. Alberta’s oil would head south to American refineries and then get refined and sold to Ontario and Quebec.
[A little under 15 years ago the Energy East project was proposed](https://en.wikipedia.org/wiki/Energy_East). With the US blocking a new pipeline south over political reasons companies saw a bit of a “revenge plot” by supplying Canadian Irving refineries in New Brunswick with all Canadian oil (thus cutting into American sales to Canada). The project was cancelled by Prime Minister Trudeau within his first year in office after a few municipalities and 180 indigenous groups sought to kill the project.
Canadians had no interest in developing new pipelines. In the same year Trudeau bought the TransMountain Pipeline from Kinder Morgan. This pipeline has now been said will never turn a profit over its life.
Canada and the US are really big and close over a lot of it. Vancouver and Seattle are 230km apart. Vancouver and Toronto are 4200km apart. Toronto and Detroit are 350km apart.
Free trade agreements lock in current output. If output increases, that’s locked in. It guarantees a customer, but fundamentally gives the US control.
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