Analysing Canada’s Energy Superpower Status

The phrase "energy superepower" is still bandied about and images of a Great Canadian petro-state swaggering on the world stage might not only unsettle our trading partners but also undermine our credibility abroad as a carefully managed resource state

By Sebastian Gault

April 01, 2007

And consider the nature of Canadian federalism. In contradistinction to the federalist arrangement in Russia, Canadian provinces, not the federal government, have jurisdiction over natural
resources – despite efforts in the 1980s to encroach on this provincial prerogative, a move considered one of the absolute low points in Canadian federal-provincial relations.

And what would motivate Canada to pose as an energy superpower anyway, when all of its exported natural gas and over 99 per cent of its exported crude go to a single trading partner – the United States? What financial advantages might accrue from any coercive act of petroleum diplomacy towards its trading partner (say, suspending exports) when Canadian oil and gas are already fetching full market prices? Because any credible threat of suspending these exports would need to be backed up by a feasible plan to re-direct product elsewhere – a very unlikely possibility since Canada has yet to develop sales channels to overseas markets – absurdity is again laid bare.

In the case of Russia’s relationship with the European Union, the matter is quite different. By controlling the pipeline infrastructure transporting both domestic and Central Asian gas to Europe and, what’s more, by increasing the number of points of access between its gas supply and Europe, Russia has managed cleverly and profitably to play its western customers off each other. Its strategy has not only prevented the emergence of a unified European energy policy but has forestalled the laying of an alternative, foreign-controlled pipeline system to bring Caspian basin gas westward and disrupt Russia’s almost monopsonist (i.e. several sellers, one buyer) position there – a classic example of energy superpower maneuvering.

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Recent posts by Sebastian Gault

Seven Deadly Sins of the New Alberta Disadvantage • October, 2007

Aside from inspiring an entire cottage industry of overnight experts, one side effect of this fall’s Alberta royalty review was the practice of faultfinding – particularly of the oil & gas industry. But in accepting the overall message of the review panel that industry has been blatantly robbing past, present and future Albertans of their fair share of the economic rent from hydrocarbon production, the government may have done more than sow the seeds of its own corpulent destruction. It just might take the rest of us with it

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Analysing Canada’s Energy Superpower Status

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