Canada: Energy Superpower? Analysis by Mary E. Stonaker

Seeking to diversify its gas exports beyond its largest trading partner, Canadian ministers laid the groundwork for a comprehensive “energy superpower” plan. Currently, the United States receives 97 percent of its northern neighbor’s exports.

Skyrocketing Asian demand is set in the crosshairs of Canada, with plans to build pipelines to transport both natural gas and oil to the Pacific Coast, where tankers could easily transport these fossil fuels across the North Pacific to hungry consumers in China.

Dubbed “Northern Gateway,” this plan will undergo hearings in the National Energy Board in 2012 before taking shape. “I would presume before September of next fall that we can work as governments to ensure that the federal cabinet can expedite that decision because, ultimately, it will be a federal cabinet decision,” commented Alberta’s Energy Minister Ron Liepert following a national energy summit held in Kananaskis Country this week.

Transparency and increased efficiency were amongst policy goals suggested at this meeting. Canada is a provincial, or federal, government and each province possesses its own energy ministry that work together under the federal umbrella to ensure individual province rights.

The timing couldn’t be better. China’s energy consumption has doubled since 2000, according to the International Energy Agency, while its per capita rate is still at approximately one-third of OECD countries with 1.3 billion people, and growing.

In July, the IEA announced China surpassed the United States as the largest overall energy consumer; the United States is still number one for oil consumption.

Given its low per capita consumption rate, China’s demand growth will only continue to grow. Recognizing this trend, China has invested heavily in import diversification, building a gas pipeline from Turkmenistan and investing in LNG ports around South and Southeast Asia, constructing a “string of pearls” by which to “strangle” India’s access to the world’s finite resources.

India’s energy demand has also grown significantly, placing it fourth in global consumption. Its large population, at over 1.2 billion people, with a low per capita usage rate indicating continued growth is to be expected and will compete with China’s equally insatiable consumers. Its growing population is also expected to surpass that of China by 2030.

China has been investing heavily in Iran and the Caspian Sea region, Pakistan and Burma to gain favor and access to said resources whether by pipeline or sea.

Recognizing and capitalizing on the immense growth in energy consumption, not only in China but across Asia, will serve Canada well as it aims to diversify its export partners.

However, not everyone is happy about the direction of such an energy security plan, saying it focuses too much on fossil fuels and not enough on renewable resources.
Ed Whittingham, Executive Director at The Pembina Institute, an Alberta based think-tank, commented, “While the ministers expressed interest in reducing greenhouse gas emissions from energy production, their decision to call Canada’s oil sands a sustainable source of energy for the world raises serious questions about that goal.”

The overwhelming majority of renewable energy in Canada is generated via hydroelectric dams covering the nation’s many waterways.

While the southern areas have enough sunlight to make solar power viable, the high latitudes of the northern regions make it obsolete for half of the year. However, the nation’s many remote communities across its expansive territory have begun using stand-alone photovoltaic (PV) units to generate solar power. These communities would otherwise depend on expensive diesel fuel to power their generators.

Nuclear power stations dot Canada’s terrain, providing approximately 15 percent of its domestic energy consumption.

Wind energy looks quite promising with an installed capacity of 4,611 MW, or 2 percent of total electricity demand, according to the Canadian Wind Energy Association, with new initiatives constantly being explored.

“Northern Gateway” has yet to be fully hatched though it is encouraging to see Canada expand its partnerships beyond its southern neighbor especially during the recent economic downturn. Relying too heavily on one consumer, no matter who that consumer may be, is setting up an extremely weak energy security strategy.

Ministers across the Canadian provinces and in the federal government must work together not only to diversify fossil fuel export options but also to harness the environment’s power, whether it be through hydro, solar, wind or nuclear.

Echoing the ministers of this week’s meeting, Canada does the potential to become an energy superpower. However, steps must be taken to promote the bountiful renewable resources it possesses in order to do so.

(Mary E. Stonaker is an independent scholar, most recently with the Middle East Institute, National University of Singapore. She can be contacted at [email protected])