North American task force to probe stronger trilateral energy ties

Suncor CEO says affordable, reliable, sustainable energy critical to economic well-being

Gary Park

Petroleum News Calgary Correspondent

An independent task force has started delving into ways to extend North American economic integration, with the prospect of a beefed up continental energy policy believed to be high on the list. Inaugural meetings were held in Toronto Oct. 17 and 18 to explore “deeper cooperation in areas of common interest” under the auspices of the Council on Foreign Relations in the United States, the Canadian Council of Chief Executives and the Mexican Council on Foreign Relations.

Co-chairing the task force are former Massachusetts Gov. Bill Weld, former Canadian Deputy Prime Minister John Manley and former Mexican Finance Minister Pedro Aspe.

Recognizing the U.S. desire for greater energy security, the Canadian Council of Chief Executives said recently that Canada “should develop and propose a resource security pact based on respect for the principles of security of access and security of supply.”

It is not clear how this would differ from the current flow of Canadian oil and gas to the Lower 48 under the North American Free Trade Agreement.

However, Rick George, president and chief executive officer of Suncor Energy, said in a speech Oct. 18 that the work of the task force is closely tied to the North American Security and Prosperity Initiative which was launched last year by the Canadian Council of Chief Executives.

He said that “based on the premise that North American economic integration is irreversible and North American security is indivisible, the CCCE strategy calls for action on five fronts.”

The council has called for:

- Reinventing borders to speed the secure flow of goods and people.

- Achieving new regulatory efficiencies that recognize that integrated markets need integrated regulatory approaches.

- Reinvigorating the defense alliance to protect our shared interests.

- Creating new institutions to help manage the many issues and obstacles that arise from economic integration.

- Enhancing resource security, most notably in the energy sector, to strengthen the link between security of supply that matters to the United States and the security of access that is so important to Canada.

U.S. demand expected to rise by 50 percent

Failure by Canada to address issues such as investing in technology to improve and expand energy sources, taking care of the environment and nurturing trade relationships could put its energy leadership at risk.

“Worse, we risk being pushed into another energy crisis that could seriously damage the North American economy and affect the quality of life we have worked so hard to attain,” he said.

Energy, more than any other economic lever, can help make Canada a better partner in North America, George said.

He noted that U.S. energy demand is projected to rise by 50 percent over the next 20 years, without any significant increase in U.S. domestic production.

“To close the gap, the United States will need to rely more on imports — and they’re looking north,” he said, noting that Canada is already the ninth-largest crude producer in the world and, unlike many other top producers, is not faced with shrinking volumes because of the oil sands.

“What’s more, Canada has the advantage of being friendly, reliable and politically stable — a combination of qualities that is rare among countries with large oil reserves,” George said.

Some observers have even suggested that if Washington subsidized oil sands development in Alberta it could easily replace the 5 million barrels per day it currently buys from the Middle East.