The fracking boom over the past decade has turned the United States into the king of the global oil production patch. The surge is led by the big Permian shale oil basin in Texas and New Mexico. But North Dakota — the nation's second-largest oil-producing state after Texas — has also hit new output records in recent months. Oil is a significant force in Minnesota, too. Enbridge's corridor of six pipelines across northern Minnesota is the main conduit of Canadian crude into the United States. The Calgary company's plan to build a new $2.6 billion pipeline to replace its current Line 3 has been controversial. Also, Minnesota is the nation's fourth-largest ethanol maker. Corn ethanol producers and the oil industry are often at odds. Dean Foreman, chief economist for the American Petroleum Institute (API), spoke this month at Riverland Community College's annual Ag Summit in Austin, Minn. API represents all facets of the oil and gas industry. Foreman talked recently with the Star Tribune.
Q: An agriculture conference is a potentially hostile crowd given Minnesota's corn and ethanol interests. Did they throw any shade your way?
A: Just the opposite. Agriculture is our largest customer. They need safe, reliable, affordable energy. We have multiple points where we are aligned and have very common interests.
Q: Can you give me an example?
A: The enabling infrastructure that takes advantage of the shale revolution — and it is nothing short of a revolution in terms of natural gas and oil production in this country. At the ag summit, I presented statistics that showed Minnesotans have saved $2.6 billion on energy between 2010 and 2016, largely because of lower oil prices. Propane and natural gas prices are significantly down, too. And prices for all three are less volatile. That doesn't happen without the infrastructure to connect oil and gas producers with markets, and that's a challenge for both producers and consumers. Also, at the ag conference, we were appealing to a broader audience. We were talking to ethanol producers, but also to agribusiness more generally.
Q: With U.S. shale oil production surging, in the long term is there going to be less demand for Canadian oil in the United States?
A: No. Heavy oil is uniquely positioned to make certain products.
Q: And heavy oil is Canada's main product?