Energy
House votes to block China from buying oil from US reserves
By Matthew Daly in Washington
WASHINGTON (AP) — The Republican-controlled House on Thursday voted to block oil from the country’s emergency stockpile from going to China.
The bill, one of the first introduced by the new GOP majority, would prohibit the Energy Department from selling oil from the Strategic Petroleum Reserve to companies owned or influenced by the Chinese Communist Party. It passed easily, 331-97, with 113 Democrats joining unanimous Republicans in support.
Rep. Cathy McMorris, R-Wash., the new head of the House Energy and Commerce Committee, said the bill would help end what she called President Joe Biden’s “abuse of our strategic reserves.”
Biden withdrew 180 million barrels from the strategic reserve last year in a bid to halt rising gasoline prices amid production cuts by OPEC and a ban on Russian oil imports following Moscow’s invasion of Ukraine. The monthslong sales brought the stockpile to its lowest level since the 1980s. The administration said last month it will start to replenish the reserve now that oil prices have gone down.
McMorris Rodgers accused Biden of using the reserve to “cover up his failed policies” that she said are driving up energy prices and inflation.
“Draining our strategic reserves for political purposes and selling it to China is a significant threat to our national and energy security. This must be stopped,” McMorris Rodgers said.
The measure is the first in a series of GOP proposals aimed at “unleashing American energy production,” McMorris Rodgers said as Republicans seek to boost U.S. production of oil, natural gas and other fossil fuels.
“There’s more to come. This is just the beginning,” she said.
Democrats, including former Energy and Commerce Chairman Frank Pallone of New Jersey, said Republicans were trying to fix a problem of their own making. China is among numerous potential adversaries that buy U.S. oil after the GOP-led Congress lifted an export ban in 2015.
“If Republicans were serious about addressing this issue, they would have brought forward a bill that banned all oil exports to China,” Pallone said, adding that sales from the strategic reserve amounted to about 2% of U.S. oil sold to China last year.
“If we truly want to address China using American oil to build its reserves, let’s actually take a serious look at that, rather than skirt around the issue because Republicans are scared of Big Oil’s wrath,” Pallone said.
The current process allows for crude oil sales from the strategic reserve to companies that make the highest offer, which includes U.S. subsidiaries of foreign oil companies, and they could then export that crude oil overseas. Last year, millions of barrels of oil from the U.S. reserves wound up being exported to China, including to a subsidiary of China’s state-run oil company, Sinopec.
The Energy Department said in a statement Thursday that Biden “rightly authorized emergency use” of the strategic reserve, also known as the SPR, to address supply disruptions and “provide relief to American families and refineries when needed the most.”
The Treasury Department estimates that release of oil from the emergency stockpile lowered prices at the pump by up to 40 cents per gallon. Gasoline prices, meanwhile, averaged about $3.27 per gallon on Thursday, down from just over $5 per gallon at their peak in June, according to the AAA auto club.
“By law we are required to select the highest value bid to ensure the best return for taxpayers, and since 2017 the vast majority of oil sold from the reserve is sold to American entities,” the Energy Department said. Over the last five years, less than 3% of oil from the strategic reserve has gone to China, officials said.
The House bill now goes to the Democratic-controlled Senate. Sen. John Barrasso, R-Wyo., has introduced a similar measure.
From the Canadian Energy Centre
By Will Gibson
Alberta oil sands projects poised to grow on lower costs, strong reserves
As geopolitical uncertainty ripples through global energy markets, a new report says Alberta’s oil sands sector is positioned to grow thanks to its lower costs.
Enverus Intelligence Research’s annual Oil Sands Play Fundamentals forecasts producers will boost output by 400,000 barrels per day (bbls/d) by the end of this decade through expansions of current operations.
“Existing oil sands projects deliver some of the lowest-breakeven oil in North America at WTI prices lower than $50 U.S. dollars,” said Trevor Rix, a director with the Calgary-based research firm, a subsidiary of Enverus which is headquartered in Texas with operations in Europe and Asia.
Alberta’s oil sands currently produce about 3.4 million bbls/d. Individual companies have disclosed combined proven reserves of about 30 billion barrels, or more than 20 years of current production.
A recent sector-wide reserves analysis by McDaniel & Associates found the oil sands holds about 167 billion barrels of reserves, compared to about 20 billion barrels in Texas.
While trade tensions and sustained oil price declines may marginally slow oil sands growth in the short term, most projects have already had significant capital invested and can withstand some volatility.
Cenovus Energy’s Christina Lake oil sands project. Photo courtesy Cenovus Energy
“While it takes a large amount of out-of-pocket capital to start an oil sands operation, they are very cost effective after that initial investment,” said veteran S&P Global analyst Kevin Birn.
“Optimization,” where companies tweak existing operations for more efficient output, has dominated oil sands growth for the past eight years, he said. These efforts have also resulted in lower cost structures.
“That’s largely shielded the oil sands from some of the inflationary costs we’ve seen in other upstream production,” Birn said.
Added pipeline capacity through expansion of the Trans Mountain system and Enbridge’s Mainline have added an incentive to expand production, Rix said.
The increased production will also spur growth in regions of western Canada, including the Montney and Duvernay, which Enverus analysts previously highlighted as increasingly crucial to meet rising worldwide energy demand.
“Increased oil sands production will see demand increase for condensate, which is used as diluent to ship bitumen by pipeline, which has positive implications for growth in drilling in liquids-rich regions such as the Montney and Duvernay,” Rix said.
“If Ottawa had it’s way Albertans would be left to freeze in the dark”
The ineffective federal net-zero electricity regulations will not reduce emissions or benefit Albertans but will increase costs and lead to supply shortages.
The risk of power outages during a hot summer or the depths of harsh winter cold snaps, are not unrealistic outcomes if these regulations are implemented. According to the Alberta Electric System Operator’s analysis, the regulations in question would make Alberta’s electricity system more than 100 times less reliable than the province’s supply adequacy standard. Albertans expect their electricity to remain affordable and reliable, but implementation of these regulations could increase costs by a staggering 35 per cent.
Canada’s constitution is clear. Provinces have exclusive jurisdiction over the development, conservation and management of sites and facilities in the province for the generation and production of electrical energy. That is why Alberta’s government is referring the constitutionality of the federal government’s recent net-zero electricity regulations to the Court of Appeal of Alberta.
“The federal government refused to work collaboratively or listen to Canadians while developing these regulations. The results are ineffective, unachievable and irresponsible, and place Albertans’ livelihoods – and more importantly, lives – at significant risk. Our government will not accept unconstitutional net-zero regulations that leave Albertans vulnerable to blackouts in the middle of summer and winter when they need electricity the most.”
“The introduction of the Clean Electricity Regulations in Alberta by the federal government is another example of dangerous federal overreach. These regulations will create unpredictable power outages in the months when Albertans need reliable energy the most. They will also cause power prices to soar in Alberta, which will hit our vulnerable the hardest.”
Finalized in December 2024, the federal electricity regulations impose strict carbon limits on fossil fuel power, in an attempt to force a net-zero grid, an unachievable target given current technology and infrastructure. The reliance on unproven technologies makes it almost impossible to operate natural gas plants without costly upgrades, threatening investment, grid reliability, and Alberta’s energy security.
“Ottawa’s electricity regulations will leave Albertans in the dark. They aren’t about reducing emissions – they are unconstitutional, ideological activist policies based on standards that can’t be met and technology that doesn’t exist. It will drive away investment and punish businesses, provinces and families for using natural gas for reliable, dispatchable power. We will not put families at risk from safety and affordability impacts – rationing power during the coldest days of the year – and we will continue to stand up for Albertans.”
“Albertans depend on electricity to provide for their families, power their businesses and pursue their dreams. The federal government’s Clean Electricity Regulations threaten both the affordability and reliability of our power grid, and we will not stand by as these regulations put the well-being of Albertans at risk.”
Related information
- Conference Board of Canada socio-economic Impacts of Canada’s 2030 Emissions Reduction Plan – (April 2025)
- Alberta Electric System Operator’s position on Canadian Energy Regulations
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