Patiently, comprehensively, Jennifer Welsh and Annette Hester take down Harper’s boasts of Canada as an energy “superpower”:
First, we produce a great deal of crude oil (and, unlike most countries, could produce more), but our natural gas production is in decline.
A decline that will accelerate as more natural gas is used to coax heavy, dirty oil from the tar sands.
And the other reason Canada is no energy superpower? No way of using energy as a way to exert influence over the world in other ways:
All of Canada’s gas exports and 98 per cent of the oil go south of the border. Unless Canada breaks the North American free trade agreement, it cannot restrict these exports — limiting out ability to use energy as a bargaining chip.
Where the oil boom is exerting a lot of influence is Canada’s own economy, suggests Eric Reguly –and not in a super way:
There is no doubt the diversification trend that created companies such as Bombardier Inc., Research in Motion Ltd., Nortel Networks Corp., Magna International inc., some of the continent’s biggest financial players (Royal Bank and Manulife Financial among them) and a car-production capability that exceeded Michigan’s has gone into reverse, in good part because of the massive amounts of capital and manpower going into the oil sands.
It also, Reguly points out, keeps interest rates high and wages outside Alberta low (where the jobs still exist, that is). GDP growth and exports are buoyant with oil prices still around $90/bbl, but what comes up does comes down:
but a global recession, higher energy taxes or the discovery of big convential oil fields could send prices plummeting. A decade ago, oil plunged to $11 (U.S) a barrel and Canada gave thanks for the fact that its industrial activities went well beyond pumping oil out of the ground.
Wonder what we’ll be able to give thanks for next time?