CPAC and Maclean’s were in Washington for the latest In Conversation town hall event. Peter Van Dusen, Maclean's journalists, and a diverse panel debated energy, trade, and the environment.
The panel included: Luiza Ch. Savage and Paul Wells of Maclean's, Gary Doer (Canada's ambassador to the United States), John Manley (president and CEO, Canadian Council of Chief Executives), Danielle Droitsch (Natural Resources Defense Council), Maryscott Greenwood (McKenna, Long & Aldridge LLP), and David Pumphrey (Center for Strategic and International Studies).
The U.S.-Canada relationship remains the envy of the world despite the occasional storm. What are the future challenges?
Canada sends nearly all oil and natural gas exports south to the United States – representing about 10 per cent of U.S. energy demand.
Those numbers seem likely to change.
New drilling technologies have unlocked once-unreachable supplies of crude oil and natural gas within the U.S.
Some experts predict the U.S. will overtake Saudi Arabia as the world’s largest energy producer by 2017 and achieve energy independence by 2035.
The geopolitical ramifications are potentially enormous. The stakes are also high for Canada’s $40-billion oil patch, which can no longer rely on the U.S. as its only export market.
►Pipelines and Climate Change
The proposed Keystone XL pipeline would carry Alberta oil sands bitumen nearly 2,000 miles to U.S. Gulf Coast refineries.
Canada is anxiously awaiting a final decision from Washington. A lack of pipeline capacity and rising U.S. output has led to sagging Alberta oil prices.
The United States initially denied approval in January 2012 after Congress imposed a 60-day deadline to study the merits. TransCanada submitted a second request, and the State of Nebraska supports the new route after earlier questions about the risk to environmentally-sensitive regions. Meanwhile, thousands marched on the White House this past weekend as organized opposition continues.
New Secretary of State John Kerry will ultimately recommend Keystone’s final approval or rejection to President Barack Obama. Kerry has long called for cuts to greenhouse gas emissions, but hasn’t tipped his hand on the pipeline proposal that would deliver more of what opponents refer to as Canada’s “dirty” oil.
As for Obama himself, do recent comments on climate change indicate a diminished enthusiasm for Keystone? The two countries have a long history of harmonized environmental policies, but will Canada follow suit if the U.S. begins an aggressive new campaign?
Obama and Prime Minister Stephen Harper signed the Beyond the Border initiative two years ago, hoping to speed up trade while enhancing border security. But Washington’s attention has been focused more on solving their budget woes.
Harper told a business audience last fall that Canada often sits in America’s “blind spot.” This, despite the $681 billion in two-way trade in 2011.
The U.S. remains Canada’s largest export market – but their share is expected to fall to about two-thirds by 2020, down from 85 per cent just a decade ago.
Will the United States shift from being Canada’s largest trading partner to a global rival?
Canada is negotiating free trade agreements with the European Union and 14 other partners, including India, Japan, and South Korea. A foreign investment protection agreement was signed with China last year.
And while Canada awaits a Keystone decision, energy companies are pushing ahead with pipeline proposals to reach new markets.
Natural Resources Minister Joe Oliver on PrimeTime Politics (Feb. 13, 2012)
Barack Obama on energy and climate change: State of the Union (Feb. 12, 2013)
CABC forum on Beyond the Border (Nov. 19, 2012)