Canada embracing its inner oil

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Global energy superpower versus inward-focused fortress. It’s hard to believe these are the energy visions of Canada and the United States, and that it’s Canada that is going big, while the U.S. is going home.

But there you have it. After nixing the Keystone XL pipeline that would have imported lots of secure oil-sands oil from Canada, U.S. President Barack Obama made it abundantly clear in his State of the Union address that he wants a future based on U.S.-made energy, even if it takes subsidies to get there.

But not just green energy, which has been central to his energy vision in the past.

He’s now embracing natural gas from shale, a fossil fuel deplored by his green constituents, but whose supplies are surging globally without his support, thanks to advancements made and funded by Big Oil, including Canadian companies and entrepreneurs.

“This country needs an all-out, all-of-the-above strategy that develops every available source of American energy,” Mr. Obama said in his Tuesday evening speech.

“A strategy that’s cleaner, cheaper, and full of new jobs. We have a supply of natural gas that can last America nearly 100 years.

“And my administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade … The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy.”

Meanwhile, he made no mention of the just-as-significant technological revolution in the even-more-profitable tight oil side of the business, even though it’s also creating jobs, while reversing the decline of U.S. oil production and reducing oil imports. It seems oil, in Mr. Obama’s world, remains a Republican fuel.

“We’ve subsidized oil companies for a century,” he complained. “That’s long enough. It’s time to end the taxpayer giveaways to an industry that rarely has been more profitable, and double-down on a clean energy industry that never has been more promising.”

Canada, on the other hand, is embracing its inner oil and going global with it. Under the leadership of Conservative Prime Minister Stephen Harper, it is brashly branding itself “a global energy superpower.”

Joe Oliver, Canada’s natural resources minister, says people “raise their eyebrows when they hear that uncharacteristic Canadian assertiveness,” but he argues the facts speak for themselves.

“Energy is a big part of Canada’s advantage” he said in a recent speech. “Energy now accounts for close to 7% of the GDP. Its importance as an economic driver will only increase in the future — because this country is an energy superpower in every sense of the word.”

Canada, he notes, is the world’s second-largest producer of uranium, the third-largest producer of hydroelectricity, the third-largest producer of natural gas, the sixth-largest producer of oil, and a growing producer of wind, biomass and solar.

With the U.S. snubbing Canada as an energy supplier with its decision to deny a permit to Keystone XL, Canada is reaching out to new friends. It’s welcoming Chinese investment in energy and cultivating new export markets in Asia. Mr. Harper will travel to China next month to meet with the Chinese president, Hu Jintao. The two leaders are expected to discuss Enbridge Inc.’s proposed Northern Gateway pipeline to transport oil to Asia from Alberta’s oilsands via a Canadian port.

It’ll be interesting to see how the U.S. oil community, a huge player in the globalization of the energy business, responds and adapts to all of this U.S. protectionism.

Major U.S. oil companies have been repatriating their businesses in recent years, partly in response to nationalism abroad, partly to take advantage of opportunities in unconventional oil and gas in the United States and Canada. They are big players in the oil sands and helping Canada’s push to win Asian markets.

Canada’s new energy-fuelled arrogance, on top of its sound financial system and leading economic performance, is proving too much for some Americans. In a commentary in Slate.com, Canada is described as a “jingoistic petro-state” and raises the question of whether “anti-Canadianism” around the world due to its oil sands development could replace “anti-Americanism.”

Perhaps.

But Canada’s energy vision builds well on its strengths. Mr. Obama’s could look thin if oil prices keep rising and U.S.-made supplies don’t kick in when Americans need them.

Credit News Source:

Canada embracing its inner oil | Energy | News | Financial Post

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