Keystone Pipeline – Where is the North American Energy Strategy Now?

james tannerEssays

How embarrassing and frustrating for Canada to have the Keystone Pipeline proposal refused by the world’s largest consumer of oil and the most aggressive resource developer the world has ever witnessed.  No, not everyone in Canada supported the Keystone Pipeline but more than a few Canadians have felt that our political agenda has been hijacked for, at least, the last 15 years. In my view Canada has been the recipient of an ideological terrorism which has been going on since the early 80s when Reaganomics was introduced.  As a result of influences from the US, we experienced an over-reliance on the benefits of free trade, resulting deregulation of strategic industries, and over-development especially of our oil resources. This sick economic theory, spread from the US, infesting Canadian politics and pushed us into a less regulated, less compassionate world.

How did this happen?

I am lucky, in a sense, because I was hired by the Alberta Government to review oil and gas economics and policy in Canada during the 80s, worked in the oil and gas business and then for approximately 15 years I worked with native communities in the tars sands region, responding to environmental, infrastructure and other over-development issues.  During those years I watched the political agenda of Canada change from what could have been a more balanced and thoughtful development strategy to the most aggressive development project Canada has ever experienced.  I witnessed the vilification of the National Energy Program and our former Prime Minister P. E. Trudeau. I watched while the mining of oil sands required the creation of vast moonscape-like pits hundreds of feet deep and the creation of huge ponds of toxic sludge that are difficult if not impossible to reclaim and billions and billions of dollars in investment.  What was the driving force behind these unbridled developments?  US OIL CONSUMPTION AND SECURITY.

The American thirst for oil has driven a large portion of world politics even before the end of the Cold War. Author Daniel Yergin is perhaps the best known for his history of oil describing its dominance of oil in US foreign policy and military strategy as far back as the World Wars. Oil became a fundamental ingredient of the American world economy.

In the early 1970s the emergence of Arab nationalism and the oil cartels of the Middle East resulted in large increases in oil prices which frightened America and shook the economy to its foundation.  The recycling of petro-dollars was even more devastating than the inflationary expenditures during the Vietnam War. Then the second oil price shock hit in 1979 and was combined with unrestrained US government spending which resulted in the recession beginning in 1981/82. Large increases in the price of oil were creating massive re-structuring of the American economy which was built on cheap oil. The expenditures on automobiles, roads, suburbs and gasoline infrastructure is the basis of the American Dream. American pride was bruised by the Middle East oil powers until Ronald Reagan arrived with the ideology of pride. The American ideology machine was in full gear with a former actor at its helm.

The result of this neo-conservatism (based on US nationalism) was a barrage of free trade and libertarian economic propaganda from the US. One of the goals of this barrage was to remove Canadian oil policies restricting US access to the vast Canadian backstop oil and gas resources of the oil sands.  One of the slogans was that Canadian oil was a secure source and to obtain that security they advocated a North American Energy Strategy. After all, it was a matter of US national security and would satisfy their need to meet the oil habit. Where is that North American Strategy now? In the 80s, the resulting free trade agreements arguably gave up our sovereignty over our oil and gas industry.  So we opened the door for development but instead of requiring the multinational visitors to our country to develop our resources responsibly our new American-loving Conservative Government of the 2000s began a deregulation process further punishing our environment and our Aboriginal peoples. In short, the excesses in our oil sands development were fueled, almost demanded, by our most important trading partner and ally. It is embarrassing that we allowed ourselves to be manipulated but even more embarrassing now to be chastised as dirty oil promoters.

Now after we have succumbed to this insidious American will – we are reprimanded by their Democratic President for not showing leadership on environmental issues like climate change.  How embarrassing. I just hope the new oil shipping railways don’t kill to many more people before proper transportation can be built.

The irony is that the Keystone Pipeline was proposed primarily to get Canadian oil to tidewater in a location with plenty of refinery capacity. (Another American driven strategy) The over-capacity of oil in Canada originally created by the greedy thirst for oil primarily from the US, now needs an outlet, to preserve our economy, our dollar and our capital base. Without an outlet the massive investments in the oil sands would become stranded. Oil prices in western Canada were ½ of world tidewater prices. The once booming economy is now struggling with resulting effects upon employment location, Canadian dollar value, and economic momentum for Canada.

So, we were fooled into over-developing our resource to ease the oil paranoia of the US. Now we are chastised for dirty oil/ global warming and told the pipeline is not in the interest of the United States of America??? Don’t try and tell me that this is just the way Capitalism works. This is just raw nationalism in the face of the so called free trade agreement and claims of national friendship, we have been had!!!!

Jim