Diane Francis: Now more than ever, North America needs an energy revolution
A joint fossil fuel market would make the U.S. and Canada self-sufficient overnight
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This fall, Quebec’s proposal to build a $1-billion transmission line to carry additional hydro-electric power to markets in New England was rejected. Ironically, many of the anti-development organizations that opposed the transmission line also opposed the XL oil pipeline from Alberta to southern refineries and others through British Columbia.
Hydro-Québec’s rejection is another major trade setback that threatens Canada’s natural resource and energy industries, and is why the Canadian and American federal governments should embark on creating a North American energy grid to ensure energy self-sufficiency, transition to alternatives, and keep costs down for consumers. Internally, Canada should resurrect the Energy East pipeline scheme.
Maine voters’ rejection of Quebec’s NECEC (New England Clean Energy Connect) project signals that transmission lines as well as pipelines are targets. But these delivery systems are essential to running a nation, and energy is the single most important trade issue for Canada. The largest foreign supplier of energy to the United States has been Canada and for 20 years exports have totalled nearly C$2 trillion.
It’s also a critical issue inside Canada. The proposed Energy East pipeline would have taken Western Canadian crude all the way to Quebec and East coast refineries. Instead, they import oil, often from some pretty pernicious nation-states that abuse human rights, at a cost in foreign currency that’s staggering. Wrote Energy Now in 2021: “In one of the great ironies of modern Canadian life, a country with plentiful oil reserves has imported $488 billion in foreign oil since 1988. This is so, despite the presence of one of the world’s largest oil reserves from Newfoundland to British Columbia (their offshore reserves) to onshore deposits on the Prairies. Quebec has imported over $228 billion in foreign oil since 1988 — far more than any other province.
“For the record, it is not that most Quebecers necessarily prefer foreign oil imports over Canadian oil. A 2020 Ipsos poll from the Montreal Economic Institute showed that 50 per cent of Quebecers wanted the province to develop its own oil industry. Further, when asked where they’d prefer to see their oil imported from, 71 per cent of Quebecers said Western Canada. In any event, as for the present reality among the provinces, New Brunswick is next with nearly $136 billion in foreign oil imports between 1988 and 2020. That in part can be explained by Saudi Arabian crude shipped into the Port of Saint John and the Irving Oil refinery.”
Additionally, the failure to build Energy East means that Western Canadian crude must be shipped through the United States and back into Ontario along the Line 5 pipeline, which the government of Michigan is considering shutting down because of potential environmental hazards. The closure of this infrastructure would create a catastrophe for Ontario’s consumers, manufacturers, farmers, and petrochemical industrial base.
A joint fossil fuel market would make the U.S. and Canada self-sufficient overnight. In 2019, the two countries produced a combined total of almost 17-million barrels of oil a day and imported a combined 2.5-million barrels a day. Likewise, a joint power grid would benefit by providing low-emissions electricity at large, discounted volumes from Canada, mostly generated by hydro-electricity and nuclear plants to supplement and bypass dirtier alternatives in the U.S.
Such a binational energy revolution initiative must be put on the agendas of both nations as soon as possible. Russia’s war against Ukraine has disrupted energy markets worldwide and triggered a resource reset, too. It’s time for the Two Amigos of North America to collaborate to guarantee supplies, lower costs, improve reliability, accelerate the transition to renewables, and eliminate the supply chain dangers of relying on energy from Russia, Saudi Arabia and other OPEC members.
Financial Post
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