Newfoundland oil, not oilsands oil

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By Gordon Laxer

In Saint John, N.B., Prime Minister Stephen Harper exclaimed that with TransCanada’s proposed Energy East Pipeline, “We’re not just expanding our markets for our energy projects. … We are also, at the same time, making sure that Canadians themselves benefit from those projects and from that gain energy security.”

Instead of always promising energy security to the United States, it’s refreshing to finally hear Harper talk about energy security for Canadians. This country is vulnerable to the next international oil supply crisis because it still imports almost half the oil Canadians use.

Atlantic Canadians are particularly exposed, depending on imports for more than 80 per cent of their oil from dodgy sources like Algeria, Saudi Arabia and Angola, to heat their homes and fuel their cars through long icy winters.

Would TransCanada’s Energy East oil pipeline finally give Atlantic Canadians the energy security they need?

Not necessarily.

TransCanada is teaming up with Irving Oil to build an ice-free, deepwater port in Saint John to receive the world’s largest oil tankers and export Western Canadian oil to the globe’s most lucrative markets.

East Coast consumers would love to get cheaper Western oil, but Alberta’s oilsands oil producers have the opposite intent. They want to reach tidewater to get the world oil price. It is clear that the oil on TransCanada’s proposed line would go to the highest bidder and that Ottawa will not determine that it must meet all of Atlantic Canadian’s oil needs before allowing exports.

But do Atlantic Canadians really need to pipe in oil all the way from far off Alberta when Newfoundland’s offshore oilfields produce just under 200,000 barrels of oil a day, enough to meet all the oil used in the four Atlantic provinces? It may make corporate sense. Does it make common sense?

Wouldn’t East Coasters be most energy secure if they relied totally on their own oil?

Absurdly, Newfoundlanders don’t get the oil they produce. The majority of it is exported and the U.S. gets first access to it through the North American Free Trade Agreement’s proportionality clause.

The clause was crafted to serve the interests of big, mainly foreign petro corporations in exporting as much Canadian oil and natural gas to the U.S. as possible.

It was written before the end of the age of cheap oil and before we realized the coming catastrophe of climate change.

But U.S. President Barack Obama’s temporary halting of TransCanada’s proposed Keystone XL pipeline broke the bargain that underlay NAFTA — guarantee the access of Canadian energy exports to the U.S. in return for U.S. first access to Canada’s energy resources. It’s clear that the U.S. can block Canadian energy exports at will. Why should we continue to give the U.S. unlimited access to our energy when that blocks Canadians from gaining energy security by relying on their own oil?

NAFTA’s proportionality clause was never in Canadian’s interest, only in corporate oil’s interest.

If Washington attempts to use NAFTA to stop Atlantic Canadians from getting first access to their own oil, Canada can give six month’s notice to end NAFTA, as Obama and Hilary Clinton threatened to do in the 2008 Democratic party primaries.

Canada needs to supply Canadians with their own oil, so that when this country gets serious about weaning Canadians off their very wasteful use of oil, Canada’s oil production would fall at the same rate.

We can’t control how much carbon energy other countries burn and waste, but we can control how much we do.

Most Atlantic Canadians live on a coast or near one. There is no need for a pipeline to bring most of them oil when it can be shipped in. Why build a pipeline then, with its risks of spills and invasions of First Nations lands?

Tankers must be double hulled and are safer than oil pipelines. Tankers can be phased out as East Coasters’ oil use falls, whereas a pipeline will demand oilsands oil to fill it for half a century.

Newfoundland oil for the region would

follow the underwater cable bringing Labrador’s electric power to Nova Scotia and help knit stronger ties among Atlantic Canadians.

Russ Girling, CEO of TransCanada Pipelines, rhetorically calls his proposed Energy East line a nation-building project like the Canadian Pacific Railway and the Trans-Canada Highway.

It is no such thing. It is merely an Alberta oilsands oil exporting line for transnational oil corporations dressed up in nationalist clothing.

The long-term solution for energy security is to phase out oil’s use and rely instead on electricity produced by renewables.

Use Newfoundland’s declining oil output to transition the four provinces to a low-

carbon society. Refuse to be an export outlet for oilsands oil that spews carbon into humanity’s common atmosphere and fouls the landscape wherever it flows.

If Harper really cares about Atlantic Canadians’ energy security, he would say yes to Atlantic oil for Atlantic Canadians and no to a spill-prone oil pipeline from Quebec to Saint John.

Gordon Laxer is a political economist and

the founding director and former head

of the Parkland Institute at the University of Alberta.

Organizations: TransCanada Pipelines, Energy East, NAFTA Irving Oil First Nations Canadian Pacific Railway Trans-Canada Highway Parkland Institute University of Alberta

Geographic location: United States, Newfoundland, Saint John Alberta Canada Algeria Saudi Arabia Angola Ottawa Washington Nova Scotia Quebec

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Recent comments

  • david
    August 19, 2013 - 13:50

    Oh, and as for your ignorant quip about the "..spill-prone oil pipeline..." how much more "prone" was drilling in the Gulf of Mexico for BP? Eejot.

  • david
    August 19, 2013 - 11:00

    Tell you what, go raise the risk capital to find the next offshore'll likely need $300 -$400 million, and even then with no guarantee of even one economic discovery. Compare that to buying a lease in northern Alberta with a known, proven resource under you feet. Decisions, decisions....!! I take it that the "political" part in your title is a lot more pertinent than the "economist" part. Even your fellow, much-derided economists are embarrassed by this one.....