Proportionality
Energy Bulletin
7 Feb 2008
There is a strange clause in the North American Free Trade Agreement (NAFTA) that applies to only one country, Canada. The clause states that Canada must continue to supply the same proportion of its oil and gas resources to the US in future years as it does now. That’s rather a good deal for the US: it formalizes Canada’s status as a resource satellite of its imperial hub to the south.
From a Canadian perspective there are some problems with the arrangement, though. First is the fact that Canada’s production of natural gas and conventional oil is declining. Second is that Canada uses lots of oil and gas domestically: 70 percent of Canadians heat their homes with gas, and Canadians drive cars more and further than just about anyone else. The problem is likely to come first with natural gas; as production declines, there will come a point when there isn’t enough to fill domestic needs and continue to export (roughly 60 percent of Canada’s gas now goes to the US).
That point is not decades in the future, it is fairly imminent.
Then there is the problem of Climate Change. Canada is committed by treaty to reducing domestic emissions of carbon dioxide. But most of Canada’s emissions come not from consuming fossil fuels, but producing them. Increasingly, from producing synthetic diesel fuel from the tar sands of Alberta.
Even if Canadians decide to drive less and turn down their thermostats, those efforts will do little or nothing to change energy production rates (hence emissions rates), because any extra amounts of fuel produced but not used domestically will simply be exported south; in fact, they virtually must be by the terms of NAFTA.
So Canada’s energy security and global climate security are both held hostage by a provision within a trade agreement, a provision that is unique in all of the world’s treaties. Canada has every reason to repudiate the proportionality clause, and to do so unilaterally and immediately.
Of course, the current Canadian government will not do so. Nor will the main opposition party. Both are securely bound to do the will of their puppeteers in Washington. But what about the NDP, Canada’s other main (center-left) party? Couldn’t it make the abolition of the proportionality clause a key campaign issue? Surely Canadians care about energy security and simple fairness. By raising the question, the NDP would educate Canadians about the links between fossil fuel depletion, globalization, and climate change, while forcing the other parties to either identify themselves with, or abandon, a policy that imperils their nation’s future.
Party leaders might be wary of the US response, but the latter would be fascinating to see. Of course the US would threaten all sorts of trade punishments. However, the domestic US political fallout is delicious to contemplate: in this case, US motives would require no speculation, as do the nation’s real goals in Iraq or elsewhere in the oil-rich Middle East. Americans wouldn’t be using economic muscle against demonized Arabs on the other side of the world, but against people who are culturally just like themselves who happen to live north of an imaginary line. The unfairness of the proportionality clause would be apparent to everyone and the idiocy of US energy and climate policy would also be plainnot just to Canadians, but to the rest of the world and (crucially) to US citizens as well.
With so much at stake, and with current policy leading inevitably toward crisis, isn’t it time for a bold move such as this?