The National Post is Canada’s second largest national paper. Terence Corcoran is the editor and columnist for the Financial Post section of the National Post.
Canada hardly rates a mention in Daniel Yergin’s new book
When a “global energy superpower” starts delivering tough talk to its potential customers, that superpower had better be sure that people will listen. It has also better be sure it is in fact a superpower; otherwise, it may find itself talking tough to the wind.
In recent weeks, Canada — a self-proclaimed global energy superpower — has been trying to throw its weight around over the Keystone XL pipeline, TransCanada Corp.’s $7-billion project to ship oil sands production from Alberta to Texas. In Houston on Tuesday, Natural Resources Minister Joe Oliver let the Americans know that Canada had other options. “What will happen if there wasn’t approval [of Keystone] — and we think there will be — is that we’ll simply have to intensify our efforts to sell the oil elsewhere.”
Canadian oil executives, who have a lot invested in the superpower notion, are also issuing aggressive-sounding statements aimed at the United States. A headline in The Globe and Mail Friday sounded like a threat: “Oil patch to U.S.: OK pipe or lose our oil.” The story didn’t quite back up the headline, but the sense was that Canada was developing alternatives and that China is the big alternative.
If this was intended to spook the United States into approving Keystone XL, it may not be the best strategy. Mr. Oliver said Canada would “simply” have to intensify sales efforts elsewhere. There will be nothing simple about getting oil to China. Pipelines to the West Coast will have to be built over First Nations territory and through wilderness controlled by foreign-funded environmental groups. Opposition to tankers is strong.
China isn’t at Canada’s doorstep. And the Communist regime in China knows that if the U.S. doesn’t want Canadian oil sands production, then Canada has no option but to sell to China. Becoming a global energy superpower will require better negotiating positions than are shaping up around the oil sands.
Another factor playing against Canada’s claims to global prominence is the rapidly changing world energy order. Most expert assessments foresee dramatic changes in supply, technology and prices, with very little favouring Canada. Shale gas and shale oil developments in other parts of the world, from the U.S. to China and Europe, suggest the world will have plenty of supply and low prices (see Lawrence Solomon in an accompanying commentary). Where does that leave Canada’s relatively expensive oil sands?
While Canadian government and industry officials have a lot invested in the idea of energy superpowerdom, few outside observers share the vision. Canada barely rates a mention in The Quest: Energy, Security and the Remaking of the Modern World, Daniel Yergin’s new book on the world energy market. A few pages are devoted to the oil sands, mostly to review the high costs and technical difficulties.
For the rest of this article, please go to the National Post/Financial Post website: http://opinion.financialpost.com/2011/11/04/terence-corcoran-the-energy-superpower-that-isn%e2%80%99t/