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Has U.S. fracking destroyed Canada's oil and gas industry?

By Karen Graham     Jul 27, 2017 in Science
The fracking boom in the U.S. has helped to increase oil exports and reduce America's dependence on foreign oil. However, an unforeseen consequence of America's drive to be an energy leader has hurt our neighbor to the North.
Going back to January 5, the U.S. Energy Information Administration’s (EIA) Annual Energy Outlook forecast a grim future for the Canadian oil and gas sector, one where companies in Canada would be competing with their largest market.
The report highlighted the decline in imports of foreign oil into the U.S. and the steady growth of exports in the oil and gas industry as two trends that were heavily influenced by the increase in hydraulic fracturing. And at the same time, according to the report, the amount of oil and gas piped from Western Canada was expected to decline through 2040.
The EIA's projections seem to be coming true, as a number of global oil and gas producers have pulled up stakes in Canada's oil patch, including ConocoPhillips and Royal Dutch Shell Plc. However, Petroliam Nasional Bhd.’s (Petronas) decision to back out of a giant gas-export project on Canada’s Pacific Coast could be the straw that breaks the camel's back.
However, Andrew Follett, the energy and science reporter for the Daily Caller points out that Canadian energy projects have become less competitive with the U.S. for a variety of reasons, including Prime Minister Justin Trudeau's plan of balancing energy exports with climate change.
Bloomberg reported that Petronas executives cited an "extremely challenging environment" of low prices and other changes that influenced their decision to back out of the $27 billion LNG project that Trudeau approved last year.
Perhaps even more telling is what the pullouts by the big petroleum companies are having on investments across the board. “It’s another negative data point for doing business in Canada,” Swanzy Quarshie, a Canadian investor who manages $80 million in energy assets, told Bloomberg.
“The biggest concern is the perception that investors are not seeking Canada as an investment opportunity, and what does that do to other investment opportunities?”
And we have to factor in the energy policy of the Trump administration. President Trump's almost-isolationist policies, that include demanding that companies stay in America and not build facilities in other countries, along with his plan to make the U.S. a leader in energy production has been a driving force behind the glut of oil and gas being produced in the U.S.
Additionally, investors will have to ask themselves if the recent approvals of the Trans Mountain pipeline and Pacific NorthWest LNG will help to lift Canada from the energy doldrums. Most experts are watching as the picture continues to unfold.
More about Canada, Oil and gas, Fracking, Trump, energy plan