As far as bumper stickers go, the one decrying the Trudeau-era National Energy Program is probably one of the most memorable. A youngster reading it aloud would likely get a mouthful of soap but the message instructing its tailgating readers to let Easterners freeze in the dark could not have been clearer. Going far deeper than a reaction to an unpopular oil nationalization policy, the sticker underlined how closely Albertans are tied to oil for their livelihoods and highlighted regional tension between Canadian fossil fuel producers and consumers that still affects national politics and policies.

Expounding on this relationship as well as the bumper sticker, a University of Alberta academic raised some eyebrows this March with a national op-ed called, “It’s Not Nice to Let Eastern Canadians Freeze in the Dark.” The article, combined with political economist Gordon Laxer’s original, less provocatively titled paper: “Freezing in the Dark: Why Canada Needs Strategic Petroleum Reserves,” was enough to spur another Edmonton scholar to build a mathematical model arguing against it.

“Because we have this abundance, we think we don’t have to worry. But the problem is we import half of our oil so we act like an oil-importing country,” says Laxer. As a consequence, not having a strategic petroleum reserve (SPR) “puts us in a more vulnerable position than any other country.”

By “us,” in this case, he meant Eastern Canadians.

Laxer has a concept of national energy security undermined by a regional oil producer-importer divide. He calls for an active government policy to insure Eastern Canadians against the looming era of “more frequent and more severe oil supply shocks.” These shocks could be political, he says, citing a possibility of Iran being bombed and closing the Strait of Hormuz or they could be natural, such as hurricanes or other forms of severe weather.

In order to safeguard its member countries from such possibilities, the International Energy Agency directs its signatories to have a 90-day supply of petroleum on hand. However, as a net exporter of oil, Canada is exempt from this legal requirement. This status masks the reality that Eastern Canada is a net importer of oil and, as such, is very vulnerable to global oil supply shocks, says Laxer. In light of Eastern Canada’s dependence on foreign oil, most of which comes from OPEC countries overseas, either an oil reserve or an oil pipeline similar to the TransCanada gas network should be adopted into policy.

As the director of Parkland Institute at the University of Alberta, a left-leaning think tank often thought to embody the opinions of campus environmentalists, Laxer did not have to travel far to find opposition. A stone’s throw away, at the U of A School of Business, Joseph Doucet takes on the SPR with the fundamental questions of any economist worth his salt. What are the costs and what are the benefits?

Pages: 1 2