“The border is 16 miles away, and in between, there are 4,000 Angus cattle and 3,000 acres of farmland and that’s about it,” said Kenny Clark, a mechanic and oil worker who lives in Loring with his wife, two children and parents.
Soon, there might be one more thing: TransCanada’s Keystone XL pipeline. The company wants to run its controversial new pipeline not far from this outpost.
In its May 4 application to the U.S. State Department for a permit to cross an international boundary, TransCanada said it would run a 1.2-mile segment of steel pipe into Phillips County, Mont., traversing the first 0.93 mile on Bureau of Land Management land and the next 0.27 mile on state land.
If the U.S. government gives TransCanada the go ahead, the Keystone XL pipeline will give another boost to U.S.-Canada trade relations. Canada — not China — is the largest U.S. trading partner. And oil and gas accounted for more than a third of the $316.5 billion of U.S. imports from Canada in 2011.
The oil in TransCanada’s existing Keystone and proposed Keystone XL lines alone could outstrip the value of all U.S. imports from Brazil and, depending on the price, roughly equal those from France or Taiwan.
The United States is a natural destination for that oil. “The best market is the one right next to us demanding 10 million barrels of oil every day,” TransCanada chief executive Russ Girling said. “It makes no sense having tankers moving to the U.S. from Europe and the Middle East and tankers going to Asia from America.”
The large volume of oil moving to the United States from Canada is a good thing in the eyes of many U.S. experts on national security and oil industry lobbyists, who have been promoting the idea of increased U.S. reliance on North American sources of oil rather than on imports from places like Venezuela or Saudi Arabia. Canada is already the United States’ largest source of foreign petroleum, accounting for about a quarter of U.S. crude oil imports.
But reduced reliance on imports from outside North America would not insulate the United States from geopolitical crises in other oil-producing regions. When it comes to oil prices, the increased reliance on Canada will make little or no difference. The price of crude oil is a function of world supply and demand. And if a geopolitical crisis choked off some of the world’s oil sources, other consuming countries would scramble for supplies, and prices would soar globally, including the price of Canadian oil. The U.S. tab for importing oil would increase as a result.
Even so, many trade experts say, boosting U.S. imports from Canada is good for the U.S. economy because for every dollar of exports to the United States, Canada buys 85 cents’ worth of U.S.-made products. That includes goods such as U.S. iron and steel, automobiles, refined petroleum products, fruits and juices, plastics and the supersized Caterpillar dump trucks that haul away oil extracted from the tar sands of Alberta.