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Room 306 West Block

February 7, 2008

08:30 hrs to 10:30 hrs


Hon. Dennis Bevington, M.P. Moderator


[Please note: this is shortened version of the transcript]



THE MODERATOR: [...] Thank you very much. We’ll now move to Dr. Gordon Laxer.


DR. LAXER: Yes. Thanks for this.


THE MODERATOR: I might add that our MP for International Trade, Peter Julian, has just joined us.


DR. LAXER: Very good. Hi, Peter.


HON. MR. JULIAN: Hi, Gordon. Good to hear your voice.


DR. LAXER: Yes. The Parkland Institute has been working on a Canadian energy security strategy for two or three years now and we have a comprehensive plan to work on different aspects of it. We certainly recognize that Canadians, like other people in the world, must cut fossil fuel consumption both for the reasons of peak oil and for greenhouse gases.


And we also recognize that to move to a post carbon society, we’re not going to be just replacing fossil fuels with alternative energy and still burning the same amount of energy. We’re going to have to move to a lower energy society and emphasize the important things of life rather than this incredible consumption of energy.


But in Canada, we have policy impediments -- this is my main message that I want to bring today -- to substantially cutting fossil fuel consumption in Canada because rather than what the government call Canada's energy superpower status, Canada is a resource satellite of the United States, and this makes it very difficult to cut consumption the way we should.



Here is the perversity of the Canadian situation versus the American one. If the United States cuts fossil fuel consumption, they increase their energy independence and cut their dependence on Middle East oil. In contrast, if Canadians cut consumption, all we do is increase exports to the United States. The reason we do that is threefold. There’s NAFTA, the proportionality clause which only applies to Canada -- Mexico wouldn’t sign this --which says that Canada must continue to export the same percentage of energy as we have in the last three years even if we have shortages in Canada.


So we’re now exporting two-thirds of our oil and 60 percent of our natural gas. The second reason is that we’re building pipelines, five new pipelines to the United States. We don’t even have enough pipelines to go to Eastern Canada. Premier Stelmach, Premier of Alberta, was in Washington a couple of weeks ago saying, “Well, if the Americans won’t buy our dirty oil from the Tar Sands, we’ll sell to India and China.” Well, we don’t even have any pipelines to go to Oceanside, so that’s an idle and silly threat. We are locked into that. And third is the ownership structure. Most of the oil and gas industry is transnationals and largely U.S. based. So any kind of consumption savings that we did in Canada, the surplus would just be exported to the United States.



So it's going to be hard to convince Canadians that we should be cycling or walking or buying Smart cars so that more Americans can drive SUVs and Hummers.


What is the solution to the Canadian situation? What we said in the short run that we need strategic petroleum reserves. Canada is the only industrial country that doesn’t have strategic petroleum reserves. The government says, “Well, we don’t need them because we’re an exporting country and we’ve got all this oil and the Tar Sands.” Well, that doesn’t do us any good because we can’t get that western oil to eastern Canada. We don’t have enough pipeline capacity .


So every European Union country has strategic petroleum reserves. Every country in the International Energy Agency except for Canada has SPRs. Even an increasing number of oil-exporting countries have them, including Saudi Arabia, Norway, Iran, Britain -- well, Britain is just moving from the status of being an exporting country to being an importing one -- Mexico. So our two other NAFTA partners have strategic petroleum reserves.


All the Anglo sphere countries other than Canada, Britain, Australia, New Zealand, the United States, have strategic petroleum reserves.

And usually Canada is an avid joiner -- this is something from Stephen Staples -- in these international conventions. Here, we are the odd country out and we have put ourselves, even though we export more oil than we import, we have put ourselves into an importing position country because we import 40 percent of our oil from foreign countries, and that supplies 90 percent of the oil in Atlantic Canada and Quebec and over a third in Ontario.


That is because we are so focussed in Canada on helping to mitigate the American insecurity of supply. So we have now put ourselves as dependent upon Middle East oil as the United States when we have no need to be doing this. We could be an energy-secure country.


The long-term solution is to go back to the situation before 1989, the Free Trade Agreement, which said that Canada will not export energy unless we have a 25-year supply, proven supply of oil and natural gas, and that would apply to electricity as well.


So the long-term solution is to move towards a Canada-first -- move back to a Canada-first energy strategy, and then when that happens we can then cut -- if we cut consumption in this country, then that will cut production. That is the big problem that doesn’t exist now, the relationship between Canadian consumption and Canadian production.


And the reason why production is so important is that this is the largest single source of increases in greenhouse gases; is in actually the production of energy in Canada, not in its consumption.


So the Tar Sands, as in Alberta, as conventional oil is being depleted, we are ramping up the Tar Sands production and that produces almost three times the amount of greenhouse gases. It does other incredible environmental damage in terms of water, tailing ponds, loss of species, health effects for native people; there are all kinds of things.


But the other thing it does is it uses an incredible amount of energy to produce energy. So we’re going through our last supplies of natural gas in Canada, as Dennis Bevington started off with this presentation, in order to produce. So we’re taking the cleanest of the fossil fuels to produce one of the dirtiest, the Tar Sands oil. So what can we do with it? So we can export 75 percent of it to the United States. That is the insanity of this thing.


So you have to burn one-eighth the energy equivalent in natural gas to produce oil in the surface means, but we’re going more and more to the in situ which is the deep Tar Sands, and that, you have to burn a quarter as much natural gas to produce an equivalent barrel of oil. So we need to bring back consumption and production and get control of it. We have to move to a Canada-first policy in order to meet our international obligations on climate change so we don’t increase greenhouse gases.


And I agree with Larry Hughes that energy security is the big question around which we should frame this and tie that in to the environment because the interesting thing is in Canada, when you say energy security for Canadians, you’re actually saying energy independence. When the Americans talk about energy security, they’re not talking about that. Very often they’re talking about going and getting other people’s oil.


But in Canada, we who have been economic nationalists in the past have used certain terminology when we fought the Free Trade Agreement, but when you get into the question of security -- and it is a real question for Canadians anyways because we live in this northern country where people can actually die in winter if there’s energy supply cuts. People can freeze in the dark. When you use the term security, it’s a language which the right wing and the Conservatives and the mainstream sort of use, and it’s very difficult for them to counter our arguments when we put this in terms of security.


So the Parkland Institute is developing a Canadian energy security strategy. We just came out with this report on strategic petroleum reserves. We are going to be coming out with a report on the proportionality clause and also on the whole pipeline situation.

So thank you for this opportunity.

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