For months, it has been on the lips of Alberta Premier Alison Redford: a national energy strategy, drawn up between Canada’s Premiers.
But just what is a “National Energy Strategy?” In The Globe and Mail, Joseph Aravi offers some guidance:
“An energy strategy is a long-term and adaptive framework for guiding decisions about energy development and delivery. It is a deliberative process that encourages involvement from all key stakeholders and gives each a legitimate role in addressing the tradeoffs that are key to the decisions at hand. It is a way to organize information and dialogue about energy options and consequences. And it is a way to structure choices about energy in a manner that facilitates, and more efficiently incorporates, learning.”
Aravi notes that a National Energy Strategy needs to address Canada’s energy needs over the long-term, and can’t just rely on one particular energy source at one particular point in time. In essence, such a strategy would need to encompass the oilsands in Fort McMurray, natural gas in northern BC, offshore oil deposits in Newfoundland, shale gas in Quebec, hydro electricity across Canada. It also needs to prepare for an eventual transition to next-generation energy technologies.
There’s little arguing with much of that. But as such a national energy strategy pertains to the energy realities of the next thirty to fifty years, Canada’s national energy strategy will almost invariably be largely centered around oil and other fossil fuels.
So as Redford continues to try to push her national energy strategy forward — and spar with it over BC Premier Christy Clark — Albertans have every reason to proceed with some caution. After all, history has shown us that national policies or strategies very rarely take Alberta’s interests into account.
Albertans have yet to forget about Pierre Trudeau’s National Energy Program, and the havoc it wreaked on western Canada. It imposed a “made-in-Canada” oil price that was well below world prices. It increased the taxes on operating revenues of oil and gas companies. It sought to claw away royalty revenue from western Canadian oil production. Most damaging, it severely limited export permits for western Canadian oil, while subsidizing the purchase of foreign oil (purchased at world prices) for use in eastern Canada.
The National Energy Program cost Alberta alone anywhere from $50 billion to $100 billion, and (in combination with NDP provincial government policy) set back the Saskatchewan oil and gas sector by literally decades.
Redford and her fellow Premiers haven’t been particularly forthcoming on what form the proposed National Energy Strategy will take. If it sacrifices Alberta’s interests for the benefit of Ontario and Quebec, it should be dismissed out-of-hand.
But as it turns out, whether such a National Energy Strategy is a genuine effort to advance Canada’s goals, or whether it’s hijacked for the benefit of Ontario and Quebec, depends fairly heavily on the completion of the Northern Gateway Pipeline.
Very recently, Enbridge — the company planning to build this pipeline — were given approval to reverse the flow of its Line 9 pipeline between Sarnia, ON and Montreal. Previously, flow from the pipeline progressed west from Motnreal. Now, it will flow east from Sarnia. It’s a good deal for everyone involved: western Canadian producers will have far greater access to eastern markets, and Ontario and Quebec would currently be able to purchase this oil at the West Texas Intermediate price.
Unless, of course, the Northern Gateway Pipeline is built. At that point, western Canadian oil will have far greater market access. Instead of pricing Albertan oil on the WTI index, producers would now be able to sell it at the higher Brent crude price.
It doesn’t take a scholar in Canadian history to predict that political decision-makers in Ontario and Quebec wouldn’t quietly allow something like this to take place. Even while publicly promising to shift away from fossil fuels to so-called “renewable energy” — something Ontario Premier Dalton McGuinty has been, and remains, unable to actually do — Eastern Canadian leaders may find themselves quite incentivized to stand in the way of not only the Northern Gateway Pipeline, but also of the Kinder Morgan pipeline, which Christy Clark is now preparing to oppose as well.
It seems that even with Alberta standing among Canada’s fastest-growing provinces, there are no shortage of provincial leaders clinging to their view of Alberta as a hinterland province. They may be quite prepared to short-circuit Alberta’s quest for greater market access to keep themselves in a position to buy western Canadian oil at a preferential price.
Without the Northern Gateway and Kinder Morgan pipelines, Alison Refford’s National Energy Strategy could yet become a National Energy Program. One way or the other, Albertans can never allow that to happen again.