# NAFTA and Oil



## Ottawaman (Jan 16, 2005)

I'm not an expert in either of these areas, but I am going to post a few quotes to see how the members of this forum feel regarding the current fuel situation in Canada.
I always learn much from both sides of most debates here. I am going to quote some thoughts from the net. They may or may not be biased, but at least set a direction for the dialogue.




> Canada exports 67 per cent of its oil to the U.S. yet 40 per cent of Canadians are totally reliant on offshore, mostly Middle Eastern, oil. The three leading Middle Eastern countries upon whom 36 per cent of Ontarians and 90 per cent of Quebecers and Atlantic Canadians depend are Algeria, Iraq and Saudi Arabia.
> 
> Before the North American Free Trade Agreement, 30 per cent of Canada's oil was exported to the U.S. NAFTA has more than doubled Canada's oil exports south.
> The five proposed new pipelines from Alberta's tar sands to the U.S. will commit 75 to 80 per cent of Canada's oil to the American market. Yet it is the taxpayers of Alberta and Canada who will pay the staggering environmental costs and subsidize the extraction bills.
> ...


http://www.energybulletin.net/39947.html



> On March 8, 2006, Premier Klein made a remarkable and admirable pledge. “If we see oil drying up and we see the Alberta supply being threatened and the Canadian supply being threatened, we can do whatever is necessary to ensure that Canada receives its supplies first” .





> Indeed, Alberta has plenty of oil, more than enough to meet Eastern Canadians’ needs, and export surpluses. But Alberta cannot supply Eastern Canada, even if a crisis hit and they were freezing in the dark, because NAFTA reserves Alberta’s oil for Americans’ security of supply. Although Canada is a net exporter of oil, we import almost one million barrels per day to meet 90% of Quebec’s and Atlantic Canada’s needs, and 40% of Ontario’s. At the same time, Canada exports 63% of its oil and 56% of its natural gas production to the US. Those export levels are currently locked in place by NAFTA’s proportionality clause, which states that Canada must continue exporting the same proportion of oil and gas as in the past three years, even if Canadians run short. As well, there is not sufficient, east-west pipeline capacity to fully meet Eastern needs.





> Oil security’, ‘oil independence’ and even ‘domestic ownership’ are frequently discussed in the United States and other countries, but not in Alberta or Canada





> Oil Shockwave, a scenario developed by the U.S. National Commission on Energy Policy, warns that oil disruptions could lead to a world shortfall of three million barrels, 4 per cent of global supply, a day. The world price would rise to $161 (U.S.) a barrel. Gasoline would cost $5.74 (U.S.) a gallon ($1.78 Canadian a litre).
> Mexico could weather such a supply shock. Its independent policy ensures first access for domestic needs. The US has a nationally-oriented plan and an emergency stock pile. Of the three NAFTA countries, only Canada has no plan. If there is an energy tsunami, in which of the three NAFTA countries is citizens survival most at stake?





> Positive things to learn from the US case: 1) priorize security of supply for domestic citizens and industry, 2) adopt energy self-sufficiency policies, 3) get in line with American and Canadian public opinion and ensure domestic ownership and control, and 4) develop large strategic reserves of oil and gas for use in emergencies, and to ride out supply crunches and price shocks. Alberta should develop its own emergency reserves.





> Canada must first regain control over energy supply and use. Our NAFTA partners already have this. Only Canada must export a majority of its energy in perpetuity. Canada, with Alberta’s backing, should demand a Mexican exemption. Mexico is in NAFTA and got an exemption from proportionality. Why can’t we get the same? If the U.S refuses to budge on this, we are allowed to unilaterally leave NAFTA by giving six months notice. NAFTA isn’t of much use. The U.S. ignores rulings favourable to Canada, and insists on those, like proportionality, which aren’t. If one party ignores an agreement, other parties aren't bound by them either.


http://www.polarisinstitute.org/an_...t_let_the_eastern_*******s_freeze_in_the_dark




> Canada is a net exporter of oil, with 2007 net exports of 1.0 million bbl/d. Almost all of the countries exports flow to the United States, and it is consistently the top supplier of U.S. oil imports.
> 
> Canada’s total oil production (including all liquids) was 3.36 million bbl/d in 2007. The country's oil production has steadily increased as new oil sands and offshore projects have come on-stream to replace aging fields in the western province. Overall, EIA predicts that oil sands production will increase even further in coming years and more than offset the decline in Canada’s conventional crude oil production: according to the May 2008 Short Term Energy Outlook, EIA expects Canadian oil production to increase to 3.42 million bbl/d in 2008 and 3.59 million bbl/d in 2009. Canada consumed an estimated 2.34 million bbl/d of oil in 2007. The country sends over 99 percent of its oil exports to the U.S., and it is consistently one of the top three sources of U.S. oil imports.





> Even though Canada is a net oil exporter, it imports sizable quantities of crude oil and refined products. According to the International Energy Agency (IEA), Canada imported around 1.2 million bbl/d of crude oil and refined products in 2007. Canada’s major population centers in the eastern part of the country are not well connected to its principle production facilities in the western interior, meaning that it is often easier to import oil along the coastlines rather than transport it domestically. Most oil imports come from Algeria (crude oil), Norway (crude oil) and the U.S. (refined products).





> Refining
> OGJ reported that Canada had 1.97 million bbl/d of crude oil refining capacity in January 2008. While Alberta contains most of Canada’s crude oil production, a large portion of its refining capacity resides in the more-populated eastern part of the country. Alberta has four refineries, with total capacity of 437,400 bbl/d, whereas Ontario and Quebec have a combined 919,600 bbl/d of refining capacity. According to Natural Resources Canada, the largest single refinery in the country is Irving Oil’s 280,000 bbl/d St. John plant in New Brunswick.
> In January 2007, Irving Oil initiated the environmental review process for the construction of the 300,000 bbl/d Eider Rock refinery in Saint John, New Brunswick. The facility would occupy land near the company’s existing refinery and under-construction LNG terminal (see Natural Gas section for more information). The project would cost an estimated $7 billion and supply both the domestic market and potential exports to Boston and New York. If completed, the facility would be the first grassroots refinery in Canada in the last 20 years.


http://www.eia.doe.gov/emeu/cabs/Canada/Oil.html

I wonder if Canada should have had a strategic oil policy? Is it to late to consider?


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## gastonbuffet (Sep 23, 2004)

I think an analogy is in order...

YouTube - I DRINK YOUR MILKSHAKE ! - There Will be Blood.


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## Ottawaman (Jan 16, 2005)

I was not aware of that.
Thank you - very interesting.
Now to figure out where to rent it.

BTW, I had to look it up.
There Will Be Blood (2007) - Plot summary


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## chas_m (Dec 2, 2007)

This should be kept in mind if President Obama wants to renegotiate NAFTA -- now the Canadians have a(nother) reason to join him at the table. 

PS. Just for the record, McCain's position on NAFTA should terrify every Canadian. Google "NAFTA highway" and visit the top hit* if you want to know more.

*The top hit, btw, is a solidly right-wing site. This isn't some "liberal conspiracy."


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## MacDoc (Nov 3, 2001)

Ouch 



> *An ominous warning that the rapid rise in oil prices has only just begun*
> 
> By Danny Fortson, Business Correspondent
> Wednesday, 11 June 2008
> ...


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## PenguinBoy (Aug 16, 2005)

chas_m said:


> This should be kept in mind if President Obama wants to renegotiate NAFTA


This has already come up: globeandmail.com: Ottawa plays oil card in NAFTA spat

In the short term, I wouldn't be surprised if oil prices come down a bit towards the end of Summer in an attempt to stop Obama from becoming "President Obama". China's demand will drop a bit as they slow things down to prepare for the Olympics, and the US could release some of its reserves to temporarily depress prices. Gas prices will start to come down a bit (not a lot, but they will be less than in the Summer), and voters will think all is well with the world. Early in the new year, prices will start climbing again.

I hate it when I leave my tinfoil hat off all day...


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## Macfury (Feb 3, 2006)

chas_m said:


> *The top hit, btw, is asolidly right-wing site. This isn't some "liberal conspiracy."


This conspiracy originated with the right, so why shouldn't it be represented there? Or does the fact that the site leans right give the rumour more legitimacy?


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## Ottawaman (Jan 16, 2005)

I think it would be more logical for Canadians to use Canadian oil, rather than import it from afar.

Why do we send all of our raw materials elsewhere to be processed/ manufactured and then buy them back at the elevated cost.


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## Vandave (Feb 26, 2005)

Ottawaman said:


> I think it would be more logical for Canadians to use Canadian oil, rather than import it from afar.
> 
> Why do we send all of our raw materials elsewhere to be processed/ manufactured and then buy them back at the elevated cost.


Cost efficiency.


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## Vandave (Feb 26, 2005)

PenguinBoy said:


> In the short term, I wouldn't be surprised if oil prices come down a bit towards the end of Summer ..... Gas prices will start to come down a bit (not a lot, but they will be less than in the Summer).... Early in the new year, prices will start climbing again.
> 
> I hate it when I leave my tinfoil hat off all day...


That's what oil has done every year. 

When it happens again this year, it won't mean your conspiracy is true. Well, no more than the weather getting colder in winter and warmer in summer.


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## Vandave (Feb 26, 2005)

I don't get the point of protesting fuel prices. It ain't going to change the fundamental reality of supply and demand.


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## Macfury (Feb 3, 2006)

Protest agaisnt government tax on fuels and you'll have more chance of affecting the price.


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## Vandave (Feb 26, 2005)

Macfury said:


> Protest agaisnt government tax on fuels and you'll have more chance of affecting the price.


It's not the cause of the problem. Cutting taxes will only increase demand and push back the inevitable need to look at alternatives and become more efficient. 

The world is now paying the price for Americans electing an oilman 8 years ago.


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## Max (Sep 26, 2002)

It's not all Bush's fault; nor are the roots of our problems merely eight years old. Rather, the world is paying the price for a host of unsustainable activities occurring around the globe, all of them energy and (finite) resource related.

That, and terrible planning - or no planning at all. I think those wiser courses of action were subsumed by the desire to cash in on short-term gains and ignore all consequences for future implications of our spending and energy consumption patterns.

Most of us knew that these crunches were coming. We just didn't care to acknowledge them. The swiftness with which bad news is now hurtling itself at us is perhaps surprising, but little else. We, both as individual consumers and as members of society, are now facing a range of unpleasant choices.


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## BigDL (Apr 16, 2003)

Canada’s Oil Security Supply Plan (COSSP) ensure the USA has an uninterrupted supply of oil.

The difference in the Liberal Party’s position and the Conservative Party’s position on this issue is what?


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## iJohnHenry (Mar 29, 2008)

Vandave said:


> Cutting taxes will only increase demand and push back the inevitable need to look at alternatives and become more efficient.


Perhaps, but I would prefer being able to buy gas for $1.20 now, not $1.35 (re: Harpoons 85¢ peg on taxes, if elected).


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## Max (Sep 26, 2002)

This dickering over $1.20 vs. $1.35 will look pretty quaint when it goes to two bucks and beyond.


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## iJohnHenry (Mar 29, 2008)

Yes, but it's something to cling to, not unlike a life preserver before actually drowning.


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## Max (Sep 26, 2002)

The question then becomes what to make of those final few seconds before the waters close in over you.


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## BigDL (Apr 16, 2003)

Max said:


> The question then becomes what to make of those final few seconds before the waters close in over you.


I don't know about the few seconds before the water closes over you but I hear just after the water close over you, you just relax and everything goes to *"crap"*


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## EvanPitts (Mar 9, 2007)

BigDL said:


> The difference in the Liberal Party’s position and the Conservative Party’s position on this issue is what?


The lobbyists from which they obtain their payola...


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## iJohnHenry (Mar 29, 2008)

BigDL said:


> I don't know about the few seconds before the water closes over you but I hear just after the water close over you, you just relax and everything goes to *"crap"*


Yes, I expect you lose control of your bowels at that point.

My, what a stimulating conversation. :lmao:


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## Macfury (Feb 3, 2006)

If that damned Max hadn't been driving around so much here and there, willy nilly, there would be more gas for for me.


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## MacDoc (Nov 3, 2001)

Who needs NAFTA for a good conspiracy...home grown....



> *Quebec gas companies charged with price fixing*
> Updated Thu. Jun. 12 2008 8:22 PM ET
> 
> CTV.ca News Staff
> ...


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## iJohnHenry (Mar 29, 2008)

OMG, Christian Houle for Prime Minister.

Such an asshole *belongs* in government.

Bye the bye, other regions are being looked at too.

Please, make one of them Ontario!!!!


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## Max (Sep 26, 2002)

Yeah, nice little gas cartel they had going on over there in la belle province. Wunnerful wunnerful. Man, if I was a local I'd be so pissed at those operators.

But. It does give one pause. It makes me speculate over the same thing happening here in Ontary-airy-airy-woe. Or Alberta. Or BC.

Hmmmm.

Hey, MF: my head's still above the water. Obviously you've not yet succumbed to claustro transit woes. We ought to congratulate each other.


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## Adrian. (Nov 28, 2007)

I think Canadians should be a little more concerned with water!

Americans are already taking more than triple their quota from the Great Lakes and we are polluting them like ****.

Anyone read the report done on the Great Lakes by a group of University researches from the states that the White House had held from publication for "editing". Horrible. Truly horrible how badly we treat our water.

Canada will face a war over water. Americans are going to start getting real friendly with Canada.


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## EvanPitts (Mar 9, 2007)

I don't think one needs to speculate, we all know that gas prices have long been rigged. It is just so complex that no one can figure out how they do it.

Crude Oil goes up in the market - two seconds later the gas stations hike their prices (and vice versa) even though it literally takes months to pump the oil out of the ground and ship it to the refinery, where it sits for even more months before it is shipped the the gas station. Gas stations usually have the exact same prices, even if they are not in visual range of each other, and if one changes, the other is changed in a few seconds. It's all very strange to me.


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## da_jonesy (Jun 26, 2003)

I don't think you guys have been paying attention... the issue isn't production, or just supply and demand... the issue is commodity speculation.

Prices are artificially driven higher because of speculators selling contracts and futures at well above production and distribution costs.


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