Yesterday's fuel, yesterday's deal

Gordon Laxer

The Globe and Mail

March 25, 2009

 

Suncor’s proposed buyout of Petro-Canada is being touted as a match made in Canada to create a national champion that will kick-start the oil sands. Paula Simons of the Edmonton Journal bet that Pierre Trudeau’s ghost was smirking somewhere to see his dream realized. Should advocates of Canadian energy security, domestic control and transitioning to a conserver society throw confetti at the corporate wedding?

 

As he drives the last nail in the coffin for Canada’s 1970s-style resource nationalism, it’s ironic to see Rick George, CEO of Suncor, wrap himself in the Canadian flag.

 

Despite the spin, Petro-Canada’s death moves us further toward ensuring American, rather than Canadian, energy security.

 

“This will obviously be a company that is very focused in Canada, very focused in oil sands,” he said. Exactly right. But, where are the tar sands focused?

 

With six new pipelines heading south, they are aimed straight at giving a fix to America’s energy addiction. More and more of Canada’s dwindling supplies of natural gas are burned up to heat dirty, tarry sands for export.

 

This is the contrary to the reasons Petro-Canada was created, supported and paid for by Canadian taxpayers. “Buy Petro-Canada and pump your money back into Canada”; “Petro-Canada: It’s Ours”; “Canada First”: It’s hard to believe those were Petro-Canada’s advertising slogans 25 years ago. Or that Harvie André, then the Tory energy critic and implacable foe of the National Energy Program, acknowledged that “the NEP is a successful policy. The people like it.” Or that 84 per cent of Canadians, including a majority of Albertans, enthusiastically supported the federal government’s 1980 goal of Canadianizing the oil industry, partly through public ownership.

 

Set up in 1976 during an international oil-supply crisis, Petro-Canada was the flagship in a broader policy to “act for the people” and ensure energy security for Eastern Canadians who relied on imports from risky OPEC exporters. (They still do.) Its mandate was to promote the national interest through conservation, moving Canadians away from oil, finding new supplies and providing a public “window” on a very secretive oil industry. Then, as now, the public widely distrusted the oil barons.

 

While Canadianization was incredibly popular, Petro-Canada’s presence was greeted with fear and derision by the minions of Texas’s subsidiaries in Calgary. They quickly dubbed Petro-Canada’s new Calgary headquarters Red Square, and set out to dismantle the Canada-first energy policy that the company promoted.

 

They had their man in Brian Mulroney, who agreed to the energy-proportionality clause guaranteeing that Americans, rather than Canadians, got first access to the majority of Canada’s oil and gas. Petro-Canada’s purpose had been gutted. Proportionality, the de facto, mandatory-exporting clause, appeared first in the Canada-U.S. free-trade agreement that went into effect on Jan. 1, 1989, and is now in the North American free-trade agreement. It applies only to Canada, since Mexico refused it.

 

Few will mourn Petro-Canada’s passing. Mr. Mulroney’s Conservatives divested it of its public-interest purposes and forced the company to act like just any other greed-driven private oil company. Timing and forethought are not Canada’s forte. The Suncor takeover is a backward-looking deal that signals 20th-century thinking – producing more and more fossil fuels.

 

Governments in Canada have not recognized what others see – that a unit of energy saved is better than a unit of energy consumed. While other countries are transitioning toward conservation and renewable energy, Alberta and Canada are digging themselves into the fossil fuel belt, which will soon resemble America’s industrial rust belt.

 

By setting up Petro-Canada, this country caught the previous wave of resource nationalism, during the last energy supply crisis. Everyone was nationalizing, and deglobalizing the transnationals in the 1970s. What goes around comes around. The world is on the cusp of another round of energy supply crunches. If there were sufficient quantities of easy oil left, would the transnationals be in the tar sands, the deep ocean and the Arctic?

 

With today’s great recession, renationalization is back in vogue, especially in energy. If George Bush could nationalize banks and insurance companies, anyone can do it. Seventy-eight per cent of the world’s oil is now controlled by nationally owned government entities. This is an era of rethinking the system.

 

This generation will have to invent a new version of Petro-Canada to deal with the end of cheap oil, energy insecurity and looming climate-change disasters.

 

Free-market privateers will resist the needed paradigm shift to a conserver society. It’s in their profit-driven DNA to sell as much of the destructive fuels as possible. But it’s not in the public’s, nor in nature’s interest, to allow them to do so.

 

With Petro-Canada’s passing, we now need 21st-century “public interest” ownership: non-profit, enviro-energy entities controlled by provincial and federal governments and co-operatives, with rules of incorporation mandating them to wean consumers off fossil fuels and encourage them onto renewable alternatives.


Farewell to poor, old, bureaucratic Petro-Canada. It never lived up to its original promise.

 

Hello to its successors – new, conserver energy companies aimed at serving the public good and cutting energy waste with a location commitment to Canada, and to protecting nature.