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Canada's oil ethics confused

Frances Russell

Winnipeg Free Press

September 14, 2011


DOES it make sense to you that a nation would require its own citizens to use insecure and "unethical" oil to ensure it can export secure and "ethical" oil to its neighbour?

No? But that's what's happening to Canadians.


The Canadian government labels "ethical" the gooey bitumen dug from northern Alberta's landscape to contrast it to the "unethical" oil pumped from the ground by Middle East autocracies like Saudi Arabia, Angola and Algeria to beat back the growing international environmental attack on the tar sands, especially in the U.S.


The ethical-unethical oil construct is the brainchild of conservative pundit Ezra Levant. Levant's idea poses its real ethical dilemma to Canada itself.

Here's why. According to Statistics Canada, Canada exported 68.6 per cent of its "ethical" oil production to the U.S. in 2009, an increase of six per cent since 2005.


That same year, Canada imported about 50 per cent of its domestic oil consumption from offshore, the bulk of which is "unethical," according to Levant's standards, because it comes from OPEC, the Organization of Petroleum Exporting Countries.


OPEC includes such autocracies as Algeria (23.2 per cent of our imports) Angola, (9.6 per cent) and Saudi Arabia (7.8 per cent) as well as Venezuela, Libya, Iran, Iraq and Nigeria.


Canada also imports some oil from Russia and other non-OPEC producers. Canada's imports from the North Sea (Norway and Britain), which accounted for 31.1 per cent of Canada's supply in 2009, are "ethical."


Without its "ethical" oil exports to the U.S., Canada would be self-sufficient in oil, University of Alberta political economist Gordon Laxer, founder and co-director of the university's Parkland Institute, points out. And he goes much further.


Referring to Prime Minister Stephen Harper's 2006 boast that Canada is "an energy superpower," Laxer cites some salient facts. "When you cannot safeguard your citizens from freezing in the dark, nor control how much you export, nor set the price at which citizens buy back their own energy from foreign transnationals, you know you aren't a superpower."


This is the straitjacket Canada wrapped around itself when the Brian Mulroney's Conservative government locked us into the North American Free Trade Agreement. NAFTA gives the U.S. energy security by denying energy security to Canadians.


Canadians no longer really own and control their own resources because they don't even have first call on them. Canada cannot reduce its exports to the U.S. unless it cuts its own consumption by the same amount. Unlike the U.S., Canada does not maintain a Strategic Oil Reserve to tide it over disasters such as pipeline disruptions, wars, embargoes or natural disasters. Not only does it lack refinery capacity, it even lacks a national oil pipeline.


In 1961, the Diefenbaker government introduced Canada's first national oil policy. It divided Canada into two regions. West of the Ottawa River was supplied by Alberta oil at a price higher than the world price. Quebec and Atlantic Canada were supplied by imports. After the first oil price shock in 1973, the Trudeau government embarked on a policy of Canadian energy self-sufficiency and told the U.S. it would be phasing out its exports.


Between 1973 and 1981, Canada reduced its exports by two-thirds and sent western oil as far east as Montreal. That changed in 1989 under the Mulroney government. Oil exports to the U.S. rose. The Enbridge pipeline, which had been delivering western oil to Montreal, was reversed to bring Middle Eastern oil not just back to Montreal again, but also into Ontario.


Things may soon get even worse for Canadian energy security. Enbridge plans to re-reverse its western pipeline, not to deliver western Canadian oil once again to eastern Canada, but to send it to Maine to be shipped by tanker to U.S. oil refineries in Texas and Louisiana.


The U.S. doesn't need Canada's oil, Laxer says. In fact, it's the U.S. who is the real energy superpower. With 4.6 per cent of the world's people, it produces 10 per cent of the world's oil. But because it gobbles up 23 per cent of global oil production, it hides its own bountiful energy supplies.

"When all forms of energy are considered -- oil, natural gas, coal and energy to produce electricity -- America is the world's greatest energy producer," Laxer continues. "It's second in natural gas and coal, and first in electricity. U.S. oil output is third, not that far behind that of Saudi Arabia and Russia." Because America is not only an energy superpower but also an empire, it feels entitled to ensure its security by "grabbing someone else's oil," he concludes.


Canada has fallen from nation back to colony. There's nothing ethical about that.

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