The Western provinces now stand on the precipice of achieving the status they have craved since joining Confederation. However, let’s be clear: this is about oil and gas, not just oil, not just gas.
Objectively, the West is the leading edge in Canada’s pursuit of 21st-century prosperity. Will the Western provinces get their act together, or, more to the point, will the premiers and the Prime Minister find a way to do what Canada needs them to do?
A long history of West Coast differences
The political and cultural differences between Alberta and British Columbia date back to before they entered Confederation.
The Colony of British Columbia was a classic creation of the British Empire. The familiar British structures and institutions of governance were in place, just as they were in central and eastern Canada before Confederation. Settlers to British colonies were typically recruited with secure employment. They were usually employees of an industry, working in administration, logistics, or some aspect of commerce. It is fair to say they were not particularly adventurous, beyond the fact that they had travelled all the way to the West Coast of North America.
Alberta’s frontier culture versus B.C.’s imperial roots
Before and after Confederation, many Americans moved into the prairie provinces, where British institutions were not yet well-established. Albertans are often seen, not without reason, as the most “American” of Canadians, a perception rooted in the wave of settlers who brought a frontier culture and economy north from the Great Plains. All of which becomes clear when one surveys the range of historical accounts available through a Google search.
The conflict between the staid British heritage of the Colony of British Columbia and Upper Canada, and the restless energy of the American Wild West, has always been in the background of Alberta’s relationships within Canada.
B.C. and Alberta’s conflicts over pipelines do not originate with oil; they are more like siblings in a never-ending quarrel over anything and everything. That does not mean there is no substance to the pipeline dispute, it means it requires a grown-up response.
Pipeline disputes are about more than oil
Because if we did not think things could get more complicated, they have.
Venezuela, with the world’s largest reserves of heavy oil, is now a clear target of the United States. With the U.S. Navy positioned in the Caribbean Sea, clearly surrounding Venezuela, it is no joke and a clear threat to Canada’s oil and gas industry.
Venezuela, U.S. strategy and Canada’s vulnerability
It appears evident that the American end goal is unchallenged access to Venezuelan oil. The strategy resembles a return to the centuries-old model of Empire and Vassal States. The tactical move is regime change.
The United States has only 35.2 billion barrels of oil reserves, while Venezuela, ranked first, holds 300 billion barrels, and Canada, ranked third in the world, has 170.9 billion barrels. For the United States to maintain its global oil status, it will increasingly need large quantities from Canada, Venezuela, or Mexico. (It should be noted that Mexican oil production has declined in recent years.)
Should America’s domination of Venezuela come to fruition, what does this put in front of Canada, for our economic security and sovereignty? It raises difficult questions:
• Can we be sure of maintaining access to the U.S. market?
• Would we be limited to the current capacity of the Midwest refineries, as Gulf refineries expand their heavy-oil processing capabilities?
• Can we be certain that the discount we now experience will not grow even larger?
We must be honest with ourselves. Every day brings new evidence that Canada’s oil and gas future points toward the Asia Pacific region, strengthening the case for an open mind about a new pipeline to the Pacific Coast.
The 6.5-billion-person underserved market is far more attractive, as is a market where buyers are focused on their own countries and their own people, with no intent or interest in punishing their suppliers.
For the next half-century, oil and gas will continue to be the dominant global trade currency. This does not mean we should ignore emissions or fail to protect our coastlines, it implies that neglecting the oil and gas bounty we are blessed with would betray our grandchildren.
Asia Pacific: Canada’s real energy future
To protect Canadian sovereignty, we must significantly expand our oil and gas production and shipping capacity to the Asia Pacific region.
Thirty years ago, no one was predicting anything close to what is happening today.
One thing that has not changed is the United States itself. Since its formation, its leaders have been both expansionist and isolationist. Preferential access to resources and Fortress America are today’s manifestations of U.S. foreign and economic policy.
We should not believe this is just Trump. There is broad public support across America. Polls indicate that while many dislike his tactics, they are also no longer accepting of the Free World relying solely on the United States. They also show growing support for a more nationalist economy, a sentiment increasingly visible across most Western democracies, including Canada.
Future American leaders may not be so Trumpian, but it would be wrong to think the Fortress America approach will be abandoned as Trump leaves office.
Prime Minister Carney needs to lead a discussion that finds a path forward and addresses long-held prejudices founded on differing entry points into Confederation.
Jim Rushton is a 46-year veteran of BC’s resource and transportation sectors, with experience in union representation, economic development, and terminal management.
Photo credit to THE CANADIAN PRESS/Crystal Schick
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