What are Canadian Energy Stocks

Canada ranks 5th in energy production and provides around 6 percent of the global energy supplies. Only Russia, the United States, China and Saudi Arabia turn out more energy products in total. However, the country holds the first place for production of natural uranium (1/3 of global supply or 33 percent of total energy stock of the country) and the first place for the production of hydro-electricity, which is 13 percent of the global supply). The country also produces natural gas (30 percent of the energy supply), coal (6 percent of the energy supply) and petroleum (23 percent of the supply). Canada is one of the global leaders in employing alternative energy sources, including hydroelectricity. Although the generation of renewable energy resources, particularly wind power, is high on the agenda, the country still lags in this field.

Canada is a net exporter of energy products, but that does not prevent it from importing large amounts of energy, particularly coal and oil. Although the country has extensive resources, situated in Alberta prairie province, they are too far from the industrial hubs Ontario and Quebec, whose refineries have problems processing the crude oil from tar sands, produced in Canada. Although Canada boasts the longest oil pipeline in the world – the Enbridge Pipeline System at 5000 kilometres – it transports the Western-Canada produced crude oil only as far as the central parts of the country. Thus, the fields in the eastern parts of the Unites States are a more convenient source of energy supply to Ontario.

The largest coal electric plants are located in Genesee, AB and other areas close to Toronto. In 1947, the domestic demand for coal was drastically lowered after the finding of the petroleum fields of Leduc, Alberta and also due to the imports of cheaper oil. In the 1950s, most of the energy needs (heating, transportation, and industrial production) were met by petroleum and natural gas resources, rather than coal.

As crude oil rose in price in 2008, Canada gained a considerable advantage, making use of its extensive tar sands reserve. The hotspots of that dynamic economic rise became Calgary and Fort McMurray (situated on the territory of North Alberta). The most promising Canadian energy sector stocks an interested investor might want to add to their portfolio are Encana, Suncor Energy Inc, Petro-Canada, Canadian Natural Resources Ltd, Imperial Oil Ltd, Talisman Energy Inc., Nexen.

Due to the fact that more than 99 percent of the oil exports of Canada go the United States, the growth of oil exports is tied to the stability of the US economy. Many economists predict a jobless recovery during 2010, and it may be wise to wait for a better opportunity to invest in energy stocks.



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