Washington

Sounds like a sweet deal

June 4 2001
Washington

Sounds like a sweet deal

June 4 2001

Sounds like a sweet deal

Washington

Andrew Phillips

One of Canadians’ least attractive national traits is our collective tendency to take smug satisfaction in the misfortunes of Americans. If there’s a problem afflicting the United States, you can generally spot the Canadian: he’s the one standing on the sidelines, affecting an attitude of moral superiority.

This rather pathetic stance has been fully on display as Americans come to grips with what their federal government officially describes as nothing less than “the most serious energy shortage since the oil embargoes of the 1970s.” The Bush-Cheney team in Washington, headed by a pair of old oil men, proposes to fight it mainly by expanding production— bringing predictable howls of outrage from conservationists and finger-wagging from north of the border. There go those fat-cat Americans, runs the refrain, addicted to cheap gasoline and tank-sized SUVs.

Serves ’em right.

The Canadian government, typically, is trying to have it both ways. Ottawa is rubbing its hands at the prospect of sending ever more oil, gas and electricity south, but can’t seem to refrain from lecturing its best customer.

Even as he welcomed Washington’s drive for a continental energy plan,

Natural Resources Minister Ralph Goodale added pointedly that “from the Canadian point of view, energy conservation, energy efficiency, are very important qualities and characteristics.

They are in fact qualities and characteristics of an advanced, intelligent society.”

One could surely assume, then, that an “advanced, intelligent society” like Canada’s would be more efficient and conservation-minded than the gas-guzzling American variety. As it turns out, one would be wrong. If anything, Canadians are even bigger energy hogs than are the Americans. Critics frequently note that the United States, with just 4.6 per cent of the world’s people, consumes a gluttonous 25 per cent of its energy. Canada, by comparison, has a minuscule 0.5 per cent (or one two-hundredth) of the global population but consumes 3.3 per cent of all the energy on Earth. Do the math: our record is worse. By another measure, Americans consume 104,247 kW-h of energy per person per year; Canadians consume 120,060 kW-h each—or 15 per cent more.

Fine, Canada is cold and spread out. We need a lot of energy to get through the winter. But the fact remains: 30 million Canadians consume substantially more than do the 59

million French, the 56 million Britons or even the one-billionplus Indians. Canadians are, it turns out, in no position to lecture anyone when it comes to wasting energy.

Which is not to say that the Bush-Cheney plan has much to recommend it. The biggest problem is that it’s a solution to a problem that scarcely exists. Aside from California’s botched exercise in privatizing electricity, leading to the state’s wellpublicized and genuinely disruptive rolling blackouts, the United States has nothing approaching an energy crisis.

Gasoline prices are relatively high (by U.S. standards), but peaked last week at an average 45 cents a litre and are generally expected to head down for the rest of the summer. And all signs are that markets are doing what they’re supposed to do: higher prices depress demand and draw out more supply.

High gasoline prices mean that sales of monster SUVs are down, while small-car sales are up. Oil companies are using their record profits to invest in new refineries for the first time in many years. Similarly, high electricity prices have set off a surge of investment: some 90,000 megawatts of new electricity is scheduled to come online by 2002, with even more on the way after that. Higher natural gas prices have sparked billions of new investment in pipelines, with some 14,500 km of new pipe to be completed in the next 18 months.

All that, more than any government plan, will solve any real or imagined energy crisis. In fact, the cannier U.S. analysts forecast an energy glut not too far down the road as high prices lead to higher profits, new investment and greater capacity. Unfortunately, Washington is using the “crisis” to loosen environmental regulations for refineries and pipelines. And it’s promoting a host of dubious subsidies, tax credits and incentives that amount to a massive handout to the energy industry—an industry that’s already doing just fine without them, thank you.

For Canada, the result is almost all good. In fact, Canada’s ample and growing energy supplies are another reason that the U.S. “crisis” is mosdy a mirage. The Americans can buy pretty much all the energy they want from Canada at the same price charged to Canadians (that was setded under the NAFTA agreement). In return, Canada gets guaranteed access to the biggest energy market in the world. Sounds like a sweet deal— and even less reason for Canadians to gloat about their neighbour’s temporary difficulties.