Some time in the dead of winter, Canadian consumers will wonder whatever happened to energy self-sufficiency.
While the Organization of Petroleum Exporting Countries is dominating headlines with the surging price of oil, it's just one part of what threatens to be a painful time coming up for drivers, apartment renters and homeowners.
From gasoline and heating oil to natural gas and electricity, expect bills this winter to be at historic highs.
Finding a way to quell the consumer anger won't be easy for government and industry.
Once a buzzword 20 years ago, self-sufficiency should have been the ticket to readily accessible supplies of crude oil and natural gas. With Canada sitting atop so much valuable oil and gas, economic nationalists figured it would be foolish to export our precious resources.
In the winter of 1980-81, OPEC was flexing its cartel, er, muscles. Natural gas, as a regulated commodity at the time, stayed mostly in Canada for domestic consumption.
To federalists, it made sense to have a made-in-Canada energy policy.
The idea was that affordable Western Canadian oil would flow east to Central Canada and the East Coast. Natural gas would go down the pipe to Central Canada.
National Geographic published a full-edition, special report in early 1981 on the energy crisis. Canada was touted as a "have" country, with abundant oil, natural gas, coal and uranium.
Flash forward to today, and Canada is still a "have" country, but the government and industry thinking on self-sufficiency has completely changed. The borders have vanished. Free trade in energy is the norm.
Conventional oil reserves are gradually being depleted in Western Canada, but northern Alberta's oil sands and the East Coast offshore hold massive crude reserves.
Instead of crude oil flowing from west to east, much of Western Canada's oil now goes south to the U.S. Midwest, while Central Canada imports increasing amounts of oil from the North Sea and other foreign sources. Oil from the Hibernia platform off Newfoundland is transported mostly to export markets.
Natural gas has evolved to become an important commodity in North America. With the demise of uranium-dependent nuclear projects, natural gas is fast gaining favour as the fuel of choice for power generation plants. Coal, as a cheaper commodity than natural gas, is also used in the production of electricity in certain markets such as Alberta.
Much of Canada's East Coast and the U.S. Northeast still uses home heating oil, but with the Sable Island natural gas project up and running off Nova Scotia, that's opening up new markets.
Sable Island gas is especially valuable to U.S. markets because of dwindling U.S. gas supplies. With U.S. gas demand growing by leaps and bounds, natural gas prices have doubled over the past year.
Electricity rates are also on the rise, going up by 25 per cent recently in some parts of Alberta. The convoluted electricity market is undergoing sweeping reforms across North America. Result? Electricity will be increasingly sold across state and provincial boundaries.
So, it should be clear now that pumping gasoline, turning up the thermostat and flicking on the light switch knows no sovereignty these days.
Self-sufficiency -- one of the goals of the short-lived National Energy Program of the early 1980s -- has become like the eight-track tape player. It's woefully out of style, never really worked all that well and is not likely to make a comeback any time soon.
With government regulation of energy prices not in the cards, Canadian consumers should brace themselves for a winter of discontent.
Unless you happen to live in Alberta, figuring out a viable way to somehow reduce the pain of higher energy bills will be tricky. In booming Alberta, Premier Ralph Klein is on the verge of sending out energy rebate cheques to Albertans. It helps, of course, that there's a provincial election in the wind.
Regardless of the motivation, Alberta's Conservative government chose to go the way of rebate cheques, opting to maintain the province's 9-cent-a-litre tax at the pumps. It's a shrewd move that other provinces and Ottawa should learn from.
Slashing provincial fuel-tax rates would merely create a long-term shortfall in government revenue that would need to be accounted for elsewhere by boosting other taxes.
Alberta already has the lowest provincial tax rate at the pumps. Ontario charges 14.7 cents a litre while Newfoundland effectively slaps on almost 23 cents a litre in provincial-related fuel taxes.
Offering temporary relief is the way to go. Newfoundland, in particular, would be better off sending a token energy rebate cheque for one winter than chopping its much-needed fuel taxes.