Canada's upcoming energy problems

Canada’s plans to expand energy exports are on a collision course with domestic demands. Two recent articles illustrate the schizophrenic nature of Canada’s energy plans. Unfortunately, the growing gap between rhetoric and reality will ultimately bite us in the behind.

  • The first was a column by Deborah Yedlin in the Globe & Mail which indicates that “conventional oil production peaked in North America almost 30 years ago while consumption of natural gas has consistently exceeded what has been replaced since 1996.
  • The second was an article by James McNulty in The Province describing how Canada cannot reduce its fossil fuel exports to the U.S to protect domestic supplies. He also points out that Canada is prevented from charging the U.S. “more than it charges at home” . and – we are “locked into an escalator clause that says the more we export, the more we must export” Canada’s trade negotiators stupidly agreed to these ridiculously one-sided NAFTA provisions –in contrast Mexico refused to ratify these provisions of NAFTA

Growing concern, perhaps even fear is warranted. Canada is a notoriously inefficient user of its shrinking energy resources. Canada ranks an embarrassing 27th out of 29 OECD nations in terms of energy use per capita.

This inefficiency, combined with shrinking production and NAFTA limitations on redirecting exports to domestic needs creates the almost inevitable reality of future major conflicts with our energy-sucking neighbor to the south.

It gets even worse. The huge expansion of exploration, production and distribution of oil, natural gas and coal bed methane being implemented by the Campbell and Klein governments in western Canada will just exacerbate the problem and further threaten our future energy security.

What we are not being told in the Campbell and Klein’s relentless crusade for energy profits is that NAFTA requires Canada to keep supplying the US with the same proportion of the energy we export. In other words we can’t ratchet down the energy supplied to the U.S. any faster than we ratchet down our own consumption.

Because of the escalator clause embedded in NAFTA, the more we produce for export to the U.S. now, the more we are committed to exporting later. Thus, not only will we face the environmental and economic devastation caused by the large footprint and transitory and cyclical economics of the race for energy projects, we will have to continue it into perpetuity because of the stupidity of our leaders.

While conventional sources have peaked, Canadian politician and fossil fuel executives are touting the tar sands as Canada’s ace in the hole. Fossil fuel supporters are banking on the tar sands to offset declining conventional supplies and maintain Canada as the second biggest oil supplier after Saudi Arabia.

But once again our leaders only tell part of the story. Because of the difficulty of extracting the oil, the tar sands eats up huge amounts of natural gas. So any increase in production of tar sands oil will be offset by increased consumption of natural gas, which is cleaner burning and also increasingly scarce. One industry pundit characterized the plan as ‘using gold to make lead.’

Highlighting the absurdity of Canada’s energy plans – or lack thereof – some folks are even suggesting that we build new nuclear plants to to supply the subsidized energy needed to extract the tar sands! Otherwise, every molecule of natural gas coming out of the Mackenzie Valley pipeline could get eaten up in the tar sands.

It makes no sense, and is clearly against our long-term environmental and economic interests. But that is the way our politicians make decisions about resources in Canada.

Fortunately, a growing number of British Columbian – municipalities, First Nations, ranchers, activists – are waking up to the myopia of our leaders. Dogwood Initiative is working to help them.

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