The Kind of Superpower Canada Needs To Be
- Jul 7, 2018 1:05 am GMT
In 2006 Prime Minister Harper proclaimed Canada an energy superpower because of its vast oil, gas and uranium reserves.
Unfortunately this is neither the reality, nor what the world is demanding.
Wikipedia defines a superpower as, a state with a dominant position in the international system which has the ability to influence events and its own interests and project power on a worldwide scale to protect those interests.
Canada is none of these things.
As the National Energy Board (NEB) points out, Canada is an oil price taker, rather than a price setter. Although it is the sixth largest oil producer, it produces only about four per cent of total daily production, so it has little influence on the world price of oil.
The country’s Natural Resources Minister claimed earlier this year that If we do not take heed of warnings and diversify our markets for energy by building infrastructure like pipelines, then our resources will be stranded and we will lose jobs and businesses in Canada.
As William Marsden of Postmedia News points out the argument goes, because western oil is landlocked it’s not fetching international prices and therefore is being sold at a discount. If Canada could build more pipelines such as Keystone XL or the proposed Northern Gateway through British Columbia, it would reach tidewater ports where it would attract world prices, the so-called Brent and West Texas Intermediate prices.
According to the Natural Resource Minister, the consequence of this lack of diversity is a loss of “$50 million every single day —$18 to $19 billion every year.”
The title of Marsden article is “Claims that landlocked oil costing Canada billions in revenue are ‘bogus’, economists say” and in it he points out world prices are based primarily on quality and so Canada’s bitumen, which has the lowest quality of the heavy oils, naturally fetches lower prices.
New markets don’t change the fact Canada is offering an inferior product and as to having the ability to influence events and its own interests the Northern Gateway and Keystone XL pipelines have both run into stiff opposition calling into to question whether either, let alone both, will ever be built.
As to gas, the NEB states: The Canadian natural gas market operates in the context of the greater North American market. Over the past 10 years, natural gas prices have fluctuated based on seasonal effects and supply constraints. The significant emergence of shale gas production beginning 2008 has resulted in the commodity cost of natural gas declining to 2003 levels.
As is evident from the following graphic, since 2006, when the Prime Minister proclaimed Canada a superpower, in part based on its natural gas reserves, the price per BTU has plummeted. As of today, Bloomberg sets the price at 3.84 USD/MMBtu, about half what it was when the Prime Minister made his declaration in July and a third of the price a few months earlier.
Here too overseas markets are seen as a panacea.
As to nuclear power, the industry has cratered subsequent to the Fukushima Daiichi disaster that was precipitated by a subduction zone earthquake.
Ironically Canada had the opportunity to address the industry’s principle drawbacks, waste and proliferation, based on the same natural force.
The subductive waste disposal method, for which U.S, New Zealand and Canadian patents were held in Canada by this author, would have eliminated the world’s inventory of spent nuclear fuel and excess nuclear weapons material in the subduction zone descending beneath Vancouver Island. Although this solution was depicted as the state-of-the-art and most viable answer to the problem, it was never implemented because Atomic Energy of Canada Limited, a Crown corporation, wanted to concentrate the power and opportunity of the spent fuel market in its own hands and went so far as to rule out its competition on fallacious grounds that it would violate the London Dumping Convention.
Just as the nuclear industry is declining because it failed to address its problems so too will the fossil fuel industry ultimately break down.
Silvio Marcacci points out on these pages that fossil fuel divestment is spreading faster than any previous campaign, even apartheid. And points to the pending $6 trillion carbon bubble that could lead to rapid devaluation of fossil fuel stocks that could happen if the international community heed’s the IPCC’s carbon budget warning, or if the 60 carbon pricing systems worldwide take hold and force proven assets to stay in the ground, unburned.
What the world is in need of is a clean energy superpower and on this front too Canada is failing.
Dr. Rob Gross, the Director of the U.K. Imperial College Centre for Energy Policy and Technology points out that what is needed most for a climate policy to work, is innovation that generates affordable clean energy that all 7 billion humans will want to adopt, not out of altruism or coercion, but out of self-interest.
Canada has such innovators and the intellectual capacity to address the problem but instead its leaders try to casts doubt (and here) that there is a problem, brand environmentalists enemies of the state or worst of all use the environment as little more than a tool to solicit political donations.
M.I.T. economist Daron Acemoglu and the Harvard political scientist James A. Robinson, argue in their book Why Nations Fail: The Origins of Power, Prosperity, and Poverty that, “Nations thrive when they develop “inclusive” political and economic institutions, and they fail when those institutions become “extractive” and concentrate power and opportunity in the hands of only a few.”
By this definition Canada is more failed state than superpower and this is underlined by the fact its innovators have to rely on the vagaries of crowdfunding campaigns (and here) to finance their efforts to address the most important issue humanity has ever faced.
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