Fuelling Fortress America

March 10, 2006

As Prime Minister Stephen Harper takes his turn at steering the Canadian ship of state, Ralph Klein’s latest healthcare proposals may not be the only thorny problem originating from his home province. The Athabasca tar sands project in Alberta, coupled with the lack of a made-in-Canada energy strategy, could soon prove to be an albatross for the new Harper government.

Unbeknownst to most Canadians, Canada is now the number one foreign supplier of oil to the United States. Given the uncertainties of Middle Eastern and Venezuelan supplies, the U.S. has rapidly increased oil imports from Canada, facilitated by the proportional sharing clause on energy in the North American Free Trade Agreement. Since the signing of NAFTA in 1994, oil exports to the U.S. have skyrocketed from 44% to 63% of total Canadian production while natural gas exports have shot up from 41% to 56%.

Canada has become the leading energy satellite of the U.S. at a time when America has reasserted itself globally with imperial ambitions, as witnessed by the ongoing war in Iraq. Furthermore, the fact that securing energy supplies has risen to the top of U.S. national security agenda during George W. Bush’s presidency, has put Canada in a strategic but also delicate and vulnerable position.

Meanwhile, Canada’s own energy security is at risk. Expanding exports to the U.S. has rapidly depleted our conventional reserves of oil and natural gas. It is now estimated that Canada has less than a 10-year proven supply of both conventional oil and natural gas. Despite having the second largest proven petroleum reserves in the world, Canada is already compelled to import nearly 50% of the oil needed to fuel our homes, cars and industries. Quebec and the Maritimes import 90% of their oil needs. The more we supply the U.S., the more we endanger our own energy security.

Enter the Athabasca tar sands of northern Alberta, covering almost one quarter of the province. The largest known hydrocarbon deposit of unconventional oil supplies discovered, it is estimated to contain between 175 and 200 billion barrels of recoverable oil using existing technologies. The tar sands, however, could contain as much as 2.5 trillion barrels of oil, but new and questionable technologies would be required to access these reserves at enormous monetary and environmental costs. As a result, the Athabasca tar sands has become the centrepiece of a continental energy plan to send massive new oil and gas supplies to the U.S. Three major crude oil producing projects are in operation with another six planned over the next 20 years.

As the largest single emitter of greenhouse gases, the tar sands also puts Canada in a bind over our Kyoto commitments. Three of the top 5 Canadian polluters are tar sands operators. If present trends continue, Canada will be 44% above its permitted Kyoto levels by 2010. Either the Harper government will let the tar sands run amok [supported by generous federal subsidies to Big Oil] and thereby cast Kyoto to the wind, or it will get serious and reign it in.

Moreover, tar sands developments will require huge amounts of natural gas to extract the deeper reserves of oil from the bitumen and process it as crude oil. For this purpose, a pipeline corridor through the Mackenzie Valley is currently being proposed to transport natural gas from the Arctic. In other words, one of Canada’s last remaining frontier sources of natural gas, a relatively clean fuel, will be tapped to help extract dirty crude oil. It’s like turning gold into lead. And for what purpose? So Canada can feed the U.S.’s insatiable demand. Alberta, the North and First Nations people are already bearing the destructive ecological and social consequences. Critics in Alberta are starting to call for a moratorium on new tar sands projects.

Today, the Alberta energy corridor to the U.S. poses a dilemma for Harper’s government. On the one hand, the rapid tar sands development is destined to fuel the industrial and military interests of the U.S., thereby putting Canada’s own energy security in jeopardy, while reinforcing our dependence. On the other hand, while it may be possible to constructively develop the tar sands to contribute to Canada’s long-term energy needs, including the transition to a soft path energy future, Canada has developed no such strategy.

Ever since the National Energy Program was dismantled and the National Energy Board stripped of its mandate and powers, there has been no made-in Canada energy policy. In contrast to the 1980s, development of a truly national policy would require federal-provincial partnerships. No level of government appears to be conducting research and education to mobilize Canadians to demand policies in response to the looming planetary energy crisis. The Harper government will be increasingly challenged to develop a new Canadian energy security strategy, one that meets the interests of all Canadians.

Tony Clarke, director of the Polaris Institute; Bruce Campbell, executive director of the Canadian Center for Policy Alternatives, and Gordon Laxer, director of the Parkland Institute in Alberta, who have just released Fuelling Fortress America: A Report on the Athabasca Tar Sands and US Demands for Canada’s Energy.