The case for a world energy market
February 27, 2009
Canada’s federal government has stated clearly that developing a Canada/U.S. partnership on energy and the environment is a priority. This idea finds support across the spectrum of opinion in Canada, creating common ground between environmental and energy interests. But what’s in it for the new U.S. administration?
Assuring the U.S. of our reliability as a supplier of energy is good. But this isn’t new and could easily be construed as an attempt by Canada to lock in its market access for natural gas, oil, electricity, and uranium – commodities for which we are already the number one supplier to the U.S. Signalling our willingness to partner on environmental management is also positive, but from a U.S. perspective it adds complexity to an extremely difficult domestic challenge.
Rather than focussing on our bilateral relationship, Canada’s strongest leverage on U.S. policy may in fact come from contributing to a broader international agenda where Canada and U.S. interests converge. Prime Minister Mulroney succeeded well with Presidents Reagan and George H. W. Bush by following such a course. More recently, our military mission in Afghanistan has gained us far more credit in Washington than any other Canadian initiative in the past decade.
Energy creates such multilateral opportunities. Canada can partner with the U.S. in promoting a stable world energy trade, investment and carbon management system that builds on energy markets rather than getting in their way.
The mantra in the U.S. is energy independence. It is a powerful sound byte yet impossible to achieve. North America will be dependent on imported oil as far into the future as we can see. Although the continent is virtually self-sufficient in natural gas, we also have access to world gas markets through liquefied natural gas (LNG) re-gasification capacity equivalent to over 15% of our domestic use. Even ethanol might be better sourced in places like Brazil if the objective were to find the most economic and environmentally preferable supplies. With our effectively functioning markets and flexible pipeline and storage systems, Canada and the U.S. can fulfil their energy needs strategically from either domestic sources or world markets. And of course we will be increasingly tied into a world carbon management system.
Clearly, Canada and the U.S. have a substantial and growing interest in a well-functioning world energy market. There is potential for cooperation in several areas, including energy markets, the yet-to-be defined carbon market, investment rules, northern development and technology. Canada has a great deal to contribute to the conversation if we decide to step up.
Canada has earned its place at this table. We have learned the hard lessons of the National Energy Program – how bad policy can wreak havoc on energy markets and sow interregional discord. We went through the tough political fight over energy in the free trade agreement. Many voices claimed in 1988 that the FTA energy chapter was a sellout of our sovereignty and our energy security. Twenty years on we have enjoyed unprecedented wealth creation and energy stability for producers and customers based on open markets complemented by North American trade and investment rules. We are a free market champion with the scars to prove it.
Meanwhile much of the world has lost faith in markets. The reaction to the recent financial meltdown (markets don’t work, let’s regulate) is piled on top of a longer trend away from open energy markets in non-OECD countries. Price management, state control of investment and energy assets and geopolitical market manipulation have become prevalent. Soon we may add ill-conceived carbon management systems to this witch’s brew.
The recurring natural gas price dispute between Russia and Ukraine, and its impact on European energy security, is a window on a world without solid trade and investment agreements. At a time when we can least afford such instability, the threat of this contagion of national self-interest is clear.
The United States and Canada have a fundamental interest in building a stable world energy market, not Fortress North America. President Obama’s visit to Canada is an ideal opportunity to begin forging an integrated approach that shapes international energy trade and investment rules, and develops mechanisms for cooperation on energy and carbon management that are necessary for those markets to work.
Pierre Alvarez, Chair, Canadian Centre for Energy Information,
Michael Cleland, President & CEO, Canadian Gas Association
Roger Gibbins, President, Canada West Foundation.
This is the first commentary in a three part series on national energy security. The series is based on a paper prepared for the recent North Pacific Energy Security Conference.
Recently, the Globe and Mail published an article by Canadian Centre for Energy Information Chair, Pierre Alvarez. The piece is based on a White Paper Mr. Alvarez wrote with Michael Cleland, President of the Canadian Gas Association and Roger Gibbins, President of Canada West Foundation. Another article by the same authors was published in the Edmonton Journal on the day President Obama visited Canada.
Friday Facts
February 27, 2009
The fuel cell industry in Canada provides approximately 1,800 jobs – 1,200 of which are in British Columbia.
Source: Government of Canada – Innovation in Canada
National cell phone recycling program
February 26, 2009
Canada’s wireless telecommunications industry has launched Recycle My Cell, designed to make it even easier for Canadians to recycle their old cell phones. The national program lets users find out where and how to properly dispose of their cell phones and other wireless devices – regardless of carrier, brand or condition.
The free program, which incorporates numerous existing cell phone recycling initiatives across the country, is organized by the Canadian Wireless Telecommunications Association in conjunction with cell phone service providers, handset manufacturers and recycling companies.
Indigo launches e-book service
February 25, 2009
Books on handheld devices will likely lead to paper savings
It only makes sense for something electric to create a buzz
February 25, 2009
This year’s North American International Auto Show (NAIAS) in Detroit was no different – all the buzz came from the electric cars.
Every year, commentators ask why America seems to have missed the boat on electric cars. Where are they? Why doesn’t everyone have one? Recent spikes in gas prices only added fuel to the fire – so to speak.
The truth is, electric cars haven’t been practical. They cost $2,000 to $3,000 more than hybrids. In turn, hybrids are more expensive than “regular” gas or diesel cars. The reason? Batteries with enough juice to run a car are bulky (often taking up the whole trunk) and pricey.
In other words, angry consumers pointing the finger at Detroit should have looked in the mirror. If there was a market for electric cars, Detroit would have done more to provide product for it. If the NAIAS is any indication, things have changed.
Cadillac, Tesla, Toyota, Chrysler, Ford and Mercedes-Benz all unveiled new and advanced electric models. These weren’t just sci-fi prototypes: Ford and Toyota committed to selling all-electric cars by 2011 and 2012, respectively.
Ford is anticipating annual sales of 5,000 – 10,000. They’re also planning a battery-powered commercial van for 2010 and a plug-in hybrid (the battery can be charged via conventional socket) by 2012.
If the NAIAS is any indication, the days of electric cars reaching maximum speeds only in playground zones are over. The days of giving up trunks for expensive and heavy batteries are over.
The days of huge gas tanks may be over too.
Wednesday Words
February 25, 2009
Radiation | emission of electromagnetic particles, such as alpha particles (helium ions) released during alpha radiation
First solar claims $1-a-watt ‘industry milestone’
February 24, 2009
Solar power has reached a major milestone on its journey to widespread financial feasibility
Full Story [The New York Times]
NASA’s global warming satellite falls to earth
February 24, 2009
NASA’s carbon dioxide monitoring satellite has failed in its attempted launch
We get questions
February 24, 2009
The Centre for Energy’s portal is loaded with factual and statistical information about Canada’s energy system. But we still get questions, here’s another.
Q: Lately I’ve noticed interest in nuclear power is increasing with talk of new nuclear power plants in Ontario, New Brunswick and Alberta. How many reactors are there in Canada? The United States? World wide? What percentage of electricity is generated through nuclear energy?
A: Canada has 22 nuclear reactors, of which 18 are currently operational, in five generating facilities: Bruce, Pickering and Darlington in Ontario; Gentilly 2 in Quebec and Point Lepreau in New Brunswick. Nuclear power provides about 12 per cent of the electricity generated in Canada.
There are 64 nuclear generating stations in the United States with 103 operating nuclear reactors generating about 19 percent of the electricity generated in the United States.
Worldwide, there are 493 nuclear reactor in 31 countries providing about 15 per cent of the electricity generated in the world.
Got a question?
Send it to infoservices@centreforenergy.com – we’ll answer it and might even publish it on Flow.
Making credit cards landfill-friendly
February 23, 2009
Expired credit card? Soon you may be able to compost it