However, ground realities have undergone a complete metamorphosis over the last few years. New, emerging technology and the current market prices have made the elusive goal now very much a reality, a possibility. What was almost unimaginable until a few years back, seems very much in grasp now. Things have turned around and this new, emerging phenomenon is making long-lasting impact on the very psyche of the energy markets. This changing landscape carries immense, long term, geo-political consequences too, one could say without fear or favor.
This emerging North American energy landscape, free from dependence on Middle East, is based on a number of factors. Shale gas developments gave rise to this revolution, and it was soon complemented by tight oil in the United Sates, the oil sand of Canada and the growing energy outflow from Mexico.
But is this North American energy independence, really the target and objective of all the stakeholders in the grid? And things start to present a considerably different picture here.
When US President Barack Obama hosted the Canadian Prime Minister Stephen Harper and Mexican President Felipe Calderon at the White House last week, which some dubbed the North American Leaders Summit, the very issue of North American energy identity and regional energy independence appeared very much under the hammer. It definitely could not have been otherwise.
And it is where things began unraveling. What theoretically seemed very much feasible and plausible may not be that practical or easy to achieve — one could now say with tongue in cheek.
Immediately after the tripartite meeting, Canadian Prime Minister Harper moved to the Woodrow Wilson Center — a think tank in Washington. And it was here that when asked whether he could see Canada and Mexico contributing to a situation where North America could achieve energy “security” or “self-sufficiency” and be independent from Middle Eastern oil, Harper said: “I’ve got to say that Canada’s interests here are a little bit different, and particularly — I might as well be frank with you — in light of the interim decision on Keystone. What it really has highlighted for Canada is that our issue when it comes to energy and energy security is not North American self-sufficiency; our energy issue is a necessity of diversifying our energy export markets. We cannot be, as a country, in a situation where really our one and, in many cases, almost only energy partner could say no to our energy products. We just cannot be in that kind of position. And the truth of the matter is that when it comes to oil in particular, we do face a significant discount in the marketplace because of the fact that we’re a captive supplier.
So we have made it clear to the people of Canada one of our national priorities is to make sure that we have the infrastructure and the capacity to export our energy products outside of North America. Now, look, we’re still going to be a major supplier to the United States. It’ll be a long time, if ever, before the United States isn’t our number one export market. But for us, the United States cannot be our only export market. That is not in our interests either commercially or even, as I say, in terms of price.”
And then on the limits of the special Canada-US relationship, he emphasized: “Look, I’m a strong and firm believer in not just the economic importance of our relationship, but the security importance and the importance of the United States in the world, but we cannot take this to the point where we are creating risk in significant economic penalty to the Canadian economy. And to not diversify to Asia when Asia is the growing part of the world just simply makes no sense to Canada.
And then pointing to the US decision earlier in the year not to approve the Keystone XL pipeline, which could have carried crude from Alberta to refineries in the Gulf of Mexico, Harper was blunt and to the point: “Look, the very fact that a ‘no’ could even be said underscores to our country that we must diversify our energy export markets,” Harper told a live audience of businessmen, scholars, diplomats and journalists.
“We cannot be, as a country, in a situation where our one and, in many cases, only energy partner could say no to our energy products. We just cannot be in that position.”
Harper also added that Canada has been selling its oil to the United States at a discounted price.
“We have taken a significant price hit by virtue of the fact that we are a captive supplier and that just does not make sense in terms of the broader interests of the Canadian economy,” Harper said.
The very idea of North American energy independence may not be that easy to achieve. It may not be just around the corner as many are being led to believe today. Ottawa seemed to have learned its lessons — not inclined any further to keep all eggs in one basket.
Fair enough — indeed — but would Ottawa be really independent to delineate a course free of Washington? That remains a billion dollar question. And the answer is not so easy. A couple of years back, a senior Canadian diplomat while discussing the global water crisis commented, “You know, we are a water rich country and in case a situation arises, when there is scarcity of water next door, we very well know, a gun could be pointed in our direction and we would have to comply.”
The energy resources of Canada could be no different too. Would Harper be hence really free to chart an independent energy course — one could only wait and see!
