Wikileaks, NAFTA, and oil: here we go again.

Recent Wikileaks cables have come out showing Alberta Government’s plans to provide the U.S. with a greater and stronger route for energy supplies.

An excerpt from the Calgary Herald article on this:

WikiLeaks cables released over the past few weeks show the Alberta government promised senior U.S. government officials as far back as 2003 that there would be abundant electricity exports available from Alberta, but that limited power line transmission was the major impediment to the juice flowing south.

A 2003 cable from Paul Cellucci, U.S. ambassador to Canada at the time, says then-Alberta energy minister Murray Smith -who went on to serve as Alberta’s representative in Washington -promised the U.S. government that additional electricity generation from oilsands projects would provide abundant supply to ship stateside in future years.

The electricity exports were dependent, however, on new power line transmission capacity coming online, the cables note.

“Smith and others also want to make sure that the (United States government) is aware that over time there will be tremendous electricity cogeneration available as a result of the huge thermal needs of the oilsands refining process,” says the 2003 cable.

“This could over time make significant new electricity exports available to the United States, but at least for now there is limited capacity to move this west and then south through British Columbia and on to our Pacific Northwest.”

This, along with the announcement made in 2003 by Smith that all development of the power grid would be payed for by the owner of the grid: Alberta, has some people in the province upset. Which is curious to me.
Ron Leipert, Alberta’s Energy Minister, has continued to say to this day that, “anybody who thinks we’re going to be exporting power is living in a different world. I don’t know where this bogeyman stuff is coming from.” Yet, Alberta does export a great deal of energy. Billions of gallons of oil goes south every week. If you read carefully above, you would also see that the power grid built to supply the U.S. with energy is to be used to refine the very oil Alberta’s oil sands produces to sell to America.
America’s big to-do about decreasing reliance on foreign oil doesn’t really apply to Alberta, or anywhere else in Canada for that matter. NAFTA made sure of that.
A great read on NAFTA’s energy policy is Chapter 7 in Hufbauer and Schott’s NAFTA revisited: achievements and challenges. The book itself provides a fairly good breakdown of NAFTA and what the impacts are and the chapter on energy is fairly detailed in both history and current impacts.
A shorter and more digestible analysis is available through Gordon Laxer of the Parkland Institute. His article, “Canada’s energy needs come first”,  gives a great overview of some of the most pressing issue facing Canadian/Albertan energy security, but for me the key piece is this:
Western Canada can’t supply all of Eastern Canadian needs, because NAFTA reserves Canadian oil for Americans’ security of supply. Canada now exports 63 per cent of our oil and 56 per cent of our natural gas production. Those export shares are currently locked in place by NAFTA’s proportionality clause which requires us not to reduce recent export proportions. Mexico refused proportionality. It applies only to Canada.
The end of all of this back story is that we should hardly be surprised that in 2003 the Alberta government engaged in quiet talks to secure a stronger and more reliable source of energy (fracking to get “clean coal”) to the states for a very very low price.
 I am glad to see this information coming out and I hope that more Canadians and Albertans take greater notice of where the resources they pay a dear price to exploit are going and who they are serving. It is a key issue, and increasingly will change lifestyles worldwide. Already, consumers see gasoline become increasingly more expensive. Soon, the questions of why gasoline in Canada is so expensive when the government has consistently told us we are sitting on vast quantities of it will yield answers – answers that will unfortunately not be able to reverse the decisions already made.
We cannot undo NAFTA’s proportionality clause – regardless of prices here at home or even shortages – we must continue to provide the U.S. with the same quantity as we have in peak times. I think the past just caught up to us.
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