|
ANWR, U.S. takeovers revive grumblings in Canada over its open energy border Gary Park explains that Canadians’ opposition to drilling in ANWR is part of a bigger picture of disgruntlement Gary Park PNA Canadian Correspondent
Voices that have been silent for the past decade are beginning to rumble across the land again as Canadians weigh the cost of an open energy border with the United States.
With domestic consumers paying more than ever to run their cars, heat their homes and keep their lights burning, there is a growing clamor for made-in-Canada energy prices and a limit on foreign — read American — ownership of sources of supply.
Topping a growing list of grievances are:
• Government, aboriginal and environmental opposition to President George W. Bush’s push to open the Arctic National Wildlife Refuge.
• The North American Free Trade Agreement which offers guaranteed access to U.S. markets. In exchange NAFTA Article 605 says Canada can reduce exports to the U.S. only if domestic supplies are cut by a proportional amount and requires Canada to keep supplying oil through existing pipelines.
• An unparalleled wave of U.S. takeovers of Canadian-owned oil and gas producers, which is close to C$25 billion since 1995, with the associated loss of control over those resources. An estimated 40 percent of Canada’s oil reserves and production have disappeared from public scrutiny, since U.S.-based companies are not required to publish complete information on their Canadian operations. High price for free trade “We are paying a high price for free trade,” says Larry Pratt, a former political science professor at the University of Alberta. “The 49th parallel is vanishing, creating a new integrated continental oil and gas market in which Canadian energy industries are used to feed an ever-growing American demand.”
For producers, the rewards have never been greater, with U.S.-bound exports of oil and gas running above C$30 billion a year and E&P companies wallowing in unimagined cash flows.
For the Alberta government, which dominates Canada’s oil and gas production, the results are staggering — a C$7.3 billion budget surplus for 2000-01, with petroleum revenues at C$10.3 billion, up C$6.2 billion from the budget forecast.
Beyond that, the level of enthusiasm tapers off, as consumers grapple with home heating costs that have soared 250 percent in the past year.
When the first free trade pact was signed in 1989, few Canadians cared about losing energy sovereignty because Canada was apparently blessed with an endless supply of oil and gas.
Now that domestic prices have gone through the roof, there is a clamor to charge Americans higher prices. But NAFTA’s anti-gouging section says there can be no made-in-Canada price for oil. Nothing can be done to protect Canadian energy users, even in times of crisis.
It’s widely acknowledged that extricating Canada from Article 605 would be next to impossible, short of sending the U.S. into a rage. So, for now, Canada has no option but to continue sending more than 50 percent of its oil and gas south.
A study commissioned by The Council of Canadians and Edmonton-based think-tank Parkland Institute calls for Canada to de-link itself from Bush’s call for an expanded continental energy market.
“The continental market — allegedly the most efficient use of our resources — has revealed itself to be prohibitively expensive. We need out,” the study says.
It proposes a “re-regulation” of the industry for the first time in 16 years, with domestic oil prices determined by world prices, but gas prices based on domestic supply-and-demand rather than U.S. market conditions.
They’re the sort of extreme measures that are unlikely to get much of a hearing from the Canadian government and emphatically none at all from Alberta or the industry. On the other hand, there are the first signs of disquiet over Canada-U.S. energy relations within federal circles. Alternative to ANWR And ANWR has become the major irritant.
The first opposition surfaced during the U.S. elections, when Environment Minister David Anderson declared he was “utterly opposed” to opening up ANWR at a time when Canada’s preference for an Al Gore presidency was undiplomatically leaked.
But Anderson gave arm’s-length treatment to demands from opposition political parties and environmentalists that Canada should withhold approval of any Arctic pipeline route through Canadian territory unless the ANWR plans were scrapped.
Attempts at fence-mending started in early February, when Chretien wangled the first invitation by a foreign leader to meet with Bush in Washington — a tradition that seemed to be in jeopardy as Bush showed more interest in Mexico than his other NAFTA partner.
A combination of the Bush charm offensive and a degree of contriteness by Chretien seemed to outwardly smooth over the bumps, especially when Chretien eagerly embraced Bush’s pitch for a continental energy policy.
Even so, the Canadian line on ANWR appears to have hardened, backed by implacable opposition from the Yukon government and aboriginals, although Natural Resources Minister Ralph Goodale has tried to shift the attention of the Bush administration away from ANWR by suggesting the Alberta oil sands (with 300 billion barrels of recoverable oil), East Coast offshore and Arctic offer the same security of supply as ANWR and are all much closer to Lower 48 markets. Company takeovers cause anxiety Meanwhile, the torrent of takeovers is causing anxiety in surprising places in Canada. Peter Lougheed, a former Alberta premier and a vigorous proponent of free trade in the 1980s, said he’s “very concerned about the economic implications of takeovers in terms of the independence of Canada.”
Retired Supreme Court of Canada justice Willard Estey was more blunt in his assessment. “We are witnessing the quiet hijacking of Canadian companies by foreigners.”
Bob Blair, a former chief executive officer of pipeline giant Nova, said the loss of control over major corporations is a “very serious matter ... we are allowing something to happen far too easily.”
It was U.S. dominance of the petroleum industry in the 1960s and 1970s that resulted in the creation of Petro-Canada as a state-owned enterprise to use taxpayers dollars in wresting control of many large oil companies from foreign-dominance and saw the introduction of a National Energy Program, partly to promote frontier development by Canadian-based companies.
While Petro-Canada is now only one step away from being fully privatized, the National Energy Program has been scrapped and foreign takeovers are no longer subjected to federal review unless competition in the marketplace is threatened, Goodale has hinted at a degree of unease within government circles. A line in the sand At the same time he has become a full participant in continental energy policy discussions, he has drawn Canada’s line in the sand.
“We are not interested in subjugating our interests to anybody else’s and language that implies a North American energy policy tends to carry that impression,” he said.
Rather than creating a continental policy, Goodale said he was more interested in expanding and improving continental energy markets.
“We live right next door to the biggest economy on the face of the Earth,” he said. “Having that close a connection with the United States is at one and the same time a huge advantage and also a huge challenge.”
Goodale said he expects the U.S. to aggressively pursue its economic agenda, bearing in mind its economic and security concerns over tight energy supplies that have caused prices to rise in the past year.
“And we have to be equally vigilant, equally astute and aggressive in making sure that Canada’s economic, social and environmental interests are properly advanced,” he said.
Even among Canadians, national self-doubt and self-deprecation are seen as part of the national psyche — almost badges of honor.
In a competition on national radio, Canadian Broadcasting Corp. once asked listeners to complete the phrase: “As Canadian as ...”
To no-one’s surprise, it was swamped with lines like “As Canadian as maple syrup” and “As Canadian as ice hockey.”
But the winning submission read: “As Canadian as possible under the circumstances.”
Once in a while, Canada’s leaders try to influence the circumstances.
| 