Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
OTTAWA – Canada may be unique among nations: It possesses a scarce and valuable resource hugely in demand that it’s unable or unwilling to sell, putting the country’s economic future at risk.
This conclusion arises out of World Energy Outlook 2012, published Monday by the Paris-based International Energy Agency. The report projects a radically different energy future from the conventional assumptions that many Canadians still embrace.
“Energy developments in the United States are profound,” the report observes. Hydraulic fracturing and other unconventional forms of extraction, coupled with improving energy efficiency, will make the world’s largest economy also the world’s biggest oil producer by the end of the decade.
Within two decades, the U.S. will be virtually energy self-sufficient and a net oil exporter. The most reliable market for Canadian oil could soon become much less reliable. Even if President Barack Obama does approve the revised Keystone XL pipeline proposal next year, a continued American market for oil sands bitumen is uncertain.
But good news: Demand for oil from China, India and other large emerging economies will grow unabated. IEA projections show Canada nearly tripling its oil sands production between now and 2035.
The authors of the report assume that Canada will have the infrastructure in place to ship the oil to meet demand. That’s a big assumption.
Opposition to the proposed Northern Gateway pipeline is intense. Aboriginal groups in British Columbia appear dead-set against it, Premier Christy Clark is demanding concessions, and NDP Leader Adrian Dix, who is favoured to win the provincial election in May, is opposed, full stop.
If, as seems increasingly likely, the Northern Gateway pipeline never gets built, there are alternatives: building a new pipeline along an existing route to Vancouver; sending the oil east rather than west; relying more heavily on rail; or some combination of the three.
The fact remains, however, that age-old assumptions of endless American demand for Canadian oil now appear increasingly out of date, and we are ill-equipped to meet demand from emerging markets.
For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/news/politics/canada-must-get-its-oil-to-emerging-markets/article5226135/