Reality check: Scheer wants Canada to be ‘energy independent.’ Is this possible?
“The fact is Canada has more than enough oil — not only to displace imports from … rogue states, but to put an end to all foreign oil imports once and for all. That is part of my vision: a Canada fuelled exclusively by Canadians by 2030. An energy-independent Canada would be a Canada firing on all cylinders, across all sectors and regions. If the United States can do it, so can we.”
— Conservative Leader Andrew Scheer in a May 16, 2019, speech on his economic vision
Andrew Scheer is touting energy independence as a path to economic prosperity for Canada, a goal he says could be achieved through a dedicated, coast-to-coast right-of-way specifically set aside for energy infrastructure projects like pipelines and long-distance electricity transmission lines.
Further, Scheer indicated the United States is headed toward such energy independence.
How accurate were Scheer’s statements?
The Canadian Press Baloney Meter is a dispassionate examination of political statements culminating in a ranking of accuracy on a scale of “no baloney” to “full of baloney” (complete methodology below).
Spoiler Alert: This one earns a rating of “a lot of baloney.” The statements are mostly inaccurate but contain elements of truth. Here’s why:
“Energy independence” is a term with varying definitions. Some consider it to apply when a country becomes a net exporter of energy, while others interpret it literally, meaning a country that imports no energy. In such a scenario, the state would meet all of its own energy needs and possibly export surpluses.
Scheer’s statement clearly refers to ending “all foreign oil imports once and for all” and a Canada “fuelled exclusively by Canadians by 2030.” He says this sort of energy independence would see all regions of Canada “firing on all cylinders.” He says this is where U.S. policy is taking Canada’s closest neighbour.
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Daniel Schow, a spokesman for the Conservative leader, elaborated on the final point, saying that with respect to the United States, Scheer is speaking of how Washington “champions its energy sector.”
“Investments in energy are going up in the U.S., fuelling economic growth and activity. They have capitalized by increasing exports while simultaneously reducing their reliance on imported energy. If the U.S. is going to benefit from an expanding energy sector, why can’t Canada?”
Figures and forecasts
The United States, a net energy importer since 1953, is poised to become a net energy exporter next year and it is expected to remain one through 2050 due largely to increases in crude-oil and natural-gas production coupled with slow growth in U.S. energy consumption, according to a projection from the U.S. Energy Information Administration. However, the U.S. is also expected to import and export energy commodities throughout this extended period.
On the other hand, Canada has long been a net exporter of oil. It imports about one barrel of crude oil for every 7.5 barrels it produces, according to the National Energy Board. (In 2018, Canada’s crude imports primarily came from the U.S., followed by Saudi Arabia, Algeria and Norway.)
In addition, Statistics Canada data indicates Canada enjoys a trade surplus with the United States in both natural gas and electricity – it sells more of each to the U.S. than it buys back.
An economist and a business professor who reviewed Scheer’s statements questioned the benefit of Canada pursuing a goal of absolute energy independence.
“I’m puzzled by it,” said David Detomasi, an associate professor at Queen’s University’s business school in Kingston, Ont.
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Canada has the oil and gas resources to be self-sufficient, but the notion of building a separate energy market “kind of flies in the face of pretty much everything that we’ve done economically for the past 50 years.”
“To me energy is a market just like anything else.”
Patrick Baylis, an environmental economist at the University of British Columbia’s school of economics, said reducing foreign imports of oil to Canada would likely require construction of expensive and ecologically risky cross-country pipelines – something Scheer seems to acknowledge.
Since the value of oil would still depend on the world market price, over which Canada has limited influence, it is not obvious that this kind of investment would spur a dramatic overall increase in economic growth, he said.
Building pipelines would provide tremendous benefit to oil producers in western Canada, since they would be able to sell their product at a higher price, Baylis said. However, consumers who currently benefit from lower oil prices would lose out.
“Overall, there’s no strong reason to think that it would benefit the country more than other kinds of infrastructure investment,” Baylis said. “And given the local and global environmental costs from the production and consumption of oil, it’s not apparent to me that this is the right move.”
Finally, Detomasi is skeptical of the notion the U.S. will become an island of energy self-sufficiency.
“I don’t think they’re going to do that. I don’t think that’s really something we ought to be doing, either.”
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The United States is becoming less dependent on foreign energy but is expected to continue importing oil and gas in coming decades. At the same time, Canada is already a net energy exporter. And experts question the economic and environmental wisdom of ending all oil imports to Canada.
For these reasons, the claims contain “a lot of baloney.”
The Baloney Meter is a project of The Canadian Press that examines the level of accuracy in statements made by politicians. Each claim is researched and assigned a rating based on the following scale:
© 2019 The Canadian Press