When Donald Trump approved the Keystone XL pipeline to bring tar sands oil to U.S. Gulf Coast refineries he showed he considers Canadian oil to be American. It will “reduce our dependence on foreign oil”, he opined. In this rare case, perhaps inadvertently, Trump’s assumption is based on fact. NAFTA’s energy proportionality rule gives the U.S. virtually unlimited first access to most of Canada’s oil and natural gas even if some Canadians are running short and freezing in the dark. Not only that. Ottawa must not alter the proportion of tar sands oil in its export mix, nor the portion of exports from fracked oil and natural gas. This means that although bitumen is one of the world’s most carbon intensive fuels, Canada can’t phase it out faster than conventional oil.
Gordon Laxer, author of a forthcoming report “Escaping Mandatory Oil Exports”, outlines how and why Canada needs to dump NAFTA’s energy proportionality rule, like Mexico did in 1994. If left in place during current NAFTA negotiations, the rule will hinder or prevent Canada from quickly phasing out the production of the dirtiest oil and gas. This is a serious impediment because oil and natural gas are produced mainly for export to the U.S., and are Canada’s largest and fastest growing source of greenhouse gases, cause of coastal destruction and trampling of Indigenous rights. Canadians must remove this obstacle to our transition to a socially just, low-carbon future.
Gordon Laxer, PhD, is the founding Director and former head of Parkland Institute (1996-2011). He is a Political Economist and professor emeritus at the University of Alberta, and is the author or editor of six books, including “Open for Business: The Roots of Foreign Ownership in Canada”, which in 1991 received the John Porter Award for best book written about Canada. His latest book “After the Sands: Energy and Ecological Security for Canadians”, was a finalist for the 2016 John W. Dafoe prize in non-fiction books and winner of the Errol Sharpe book award.
This event is being organized and supported by the Council of Canadians, the Canadian Centre for Policy Alternatives and West Coast Environmental Law.
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