Both candidates for the U.S. presidency want to revamp their country’s energy policies to strengthen the nation’s strategic self reliance and to accelerate the shift toward greener energy sources. Senator Barack Obama, the Democratic nominee, and Senator John McCain, the Republican nominee, have each made sweeping calls to reduce America’s dependence on oil from unfriendly regimes. That Canada is considered ‘friendly’ doesn’t mean smooth sailing ahead for our energy sector.
According to the federal Energy Information Administration, last year the U.S. imported nearly 4.9 billion barrels of oil and refined products, 16 percent of it from the Persian Gulf and 10 percent from Venezuela, whose president has been hostile to the United States. Canada and Mexico account for more U.S. oil imports than from the Middle East and Venezuela combined. Canada – the largest source of U.S. ‘foreign’ oil imports – shipped on average 1.8 million barrels of oil a day to the U.S. in 2007, which represents 18 percent of U.S. oil imports.
Both candidates have used the call to end America’s dependency on oil from the “Middle East” to promote their respective energy platforms.
“We are going to stop sending $700 billion a year to countries that don’t like us very much” said John McCain to cheering delegates during the Republican Convention last August. “We will attack the problem on every front. We will produce more energy at home. We will drill new wells offshore, and we’ll drill them now,” he added.
“So I think we can easily, within 7, 8, 10 years, if we put our minds to it, eliminate our dependence on the places in the world that harm our national security,” said McCain during the last of three televised debates in New York.
Senator Barack Obama also supports reducing America’s dependence on foreign sources of supply, and also has used the $700 billion figure. However, he is more cautious about the alternatives. He supports drilling along the Outer Continental shelf but wants companies to focus on areas they already lease from the federal government. “Drilling is a stop-gap measure,” Obama says, “not a long-term solution.”
Canada is the only country of the top 5 ‘friendly’ supply sources (Mexico, Nigeria, Angola and Iraq) that is able to increase production. However, a significant problem for environmentalists is the fact that most of the potential increases in Canada’s oil production will come from further expansion of the Alberta tar sands – which produce about five times as many greenhouse gases as regular oil production.
Early in the campaign a warning message was sent to Canada about continued imports of our ‘dirty oil’. A senior adviser to Obama’s campaign told reporters it’s an ‘open question’ whether oil produced from northern Alberta’s oil sands fits with the Democratic candidate’s plan to shift the U.S. sharply away from consumption of carbon-intensive fossil fuels.
“If it turns out that those technologies don’t advance . . . and the only way to produce those resources would be at a significant penalty to climate change, then we don’t believe that those resources are going to … play a growing role in the long-term future,” said Jason Grumet, Obama’s senior energy adviser in June 2008.
The warning was dismissed by Alberta Premier Ed Stelmach as campaign rhetoric that would give way to economic realities after the November U.S. election.
Obama does not object, just like John McCain, to a gas pipeline that would run from Alaska to the Lower 48 via British Columbia and Alberta. The Alaska Pipeline Project would “deliver clean natural gas and create good jobs in the process,” Obama claims.
As well, both Obama and McCain advocate a range of renewable energy sources. Senator Obama wants to put one million Plug-In Hybrid cars on the road by 2015 and have the United States rely on renewable sources for 25 percent of its electricity by 2015. He supports an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050. At least one million low-income homes will be weatherized within the next decade.
John McCain, for his part, supports the construction of 45 nuclear power plants by 2030, which he views as “a zero-emission source of energy [http://www.johnmccain.com/Informing/Issues/17671aa4-2fe8-4008-859f-0ef1468e96f4.htm]”. He also backs solar, wind, and tidal energy. He wants to eliminate the tariff on imported sugarcane-based ethanol from Brazil because those subsidies “distort the market and create inflation.” Automobile manufacturers would be penalized if they kept missing mileage requirements that cars must meet before being hauled to dealerships.
Each candidate has referenced ‘clean coal’ in the context of their respective climate change policies, almost as if carbon capture and storage from this energy source was a ‘plug and play’ technology option. Some industry leaders – including James Rogers, Chairman, President and CEO of Duke Energy Corporation, have called for major government funding to prove out the technologies that would be required for large-scale systems to capture and bury carbon dioxide from coal combustion.
Another factor that pushed energy issues to the forefront of the campaign has been high prices at the pump for gasoline, which have seriously constrained consumer budgets. In July a barrel of oil had reached an all-time high of $147, though it has dropped substantially to the $75 range over the last few weeks.
Echoes of the sharp rise in the price of gasoline in 1973 when the Organization of the Petroleum Exporting Countries (OPEC) led an oil embargo in protest over the Yom Kippur War also have fuelled the call to reduce U.S. reliance on foreign oil.
While the call to end America’s dependency on foreign oil plays well on the campaign trail, there is a broader strategic agenda at play here. Both Obama and McCain know that change is required in U.S. climate change and energy policies if the country is to regain its status as the world’s top economic superpower. And in these turbulent times in global financial markets – caused in large part by massive failings in the U.S. banking system – that imperative is doubly important.
Where Canada fits in is still an open question. Clearly the U.S. will continue to regard Canada as its number one source of ‘friendly’ oil. And the oil and gas sector in Canada, as well as the governments of Alberta and Canada, will undoubtedly be eager to exploit the economic opportunities associated with that reality.
But with much of the increased oil supply required to end U.S. reliance on oil from unfriendly regimes coming from Canada’s tar sands, keeping billions of American dollars closer to home may well serve short term economic and political objectives, but may challenge the environmental agenda over the longer term.[http://www.globe-net.com/headline_news/index.cfm?type=1&newsID=3803]