Look past Keystone, CIBC report says

April 5, 2013 at 7:51 AM
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TORONTO, April 5 (UPI) -- Advantage that Canada has in global energy markets as a neighbor to the top energy consumer might not last, the Canadian Imperial Bank of Commerce said.

A report from CIBC World Markets says shale oil production in the United States has surged from a negligible amount of domestic activity to about 30 percent of the country's market. That oil is competing with the same channels that Canada relies on for market access.

Nearly all of Canada's oil exports head to the U.S. market. CIBC said it expects China will overtake the United States this year as the leading oil consumer, however.

CIBC Chief Economist Avery Shenfeld said it's unlikely that Canada will be completely sidelines by emerging market trends.

"But it's increasingly important that Canada move on one or more of the alternative pipelines to get our product headed Asia's way," he said in a statement.

Canadian Prime Minister Stephen Harper has pressed for better access to Asian markets by supporting plans for more export infrastructure on the west coast. The government is also wooing U.S. officials to pass the Keystone XL pipeline, a project planned to deliver oil to southern U.S. refineries.

"But recent developments in the global oil industry, from Venezuela to Iraq, from North Dakota to Mexico, from California to China, suggest that Keystone is just one of several important pieces of the puzzle for Canada's energy sector," Shenfeld said.

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