The escalation of tensions between the United States and Iran is a wake-up call for Canada to rethink its own energy security.
Fallout from the U.S. killing of Iranian General Qassem Soleimani is stoking fears of disruptions to global energy supplies as Iran vows retaliation for his death. Iranian reprisals could include blocking crude shipments from U.S. allies Iraq and Saudi Arabia through the Strait of Hormuz or attacks on Saudi oil infrastructure.
U.S. President Donald Trump appears to be lusting for war. After all, nothing distracts from an impeachment trial or unites Americans more effectively than armed conflict during an election year. Mr. Trump seems positively giddy as he chirps on Twitter about the prospect of using US$2-trillion-worth of new military toys to obliterate Iranian targets, including some important to “Iranian culture.” If that’s not unsettling enough, Mr. Trump is also icing out traditional allies. He threatened Iraq with sanctions if it kicks out U.S. troops, and reportedly kept Saudi Arabia in the dark about its plan to assassinate Gen. Soleimani.
Canadian officials can call for restraint until they’re blue in the face, but they have no influence when it comes to matters of war. If the United States is snubbing Iraq and Saudi Arabia, one can guess how high Canada ranks these days, especially after Mr. Trump chided Prime Minister Justin Trudeau over NATO funding. The real lesson for Canada is to look after our own interests by creating a comprehensive strategy to protect our long-term energy security from coast to coast to coast.
We can start by resurrecting the Energy East pipeline project that was cancelled by TransCanada Corp. (now known as TC Energy Corp.) in 2017. The $15.7-billion, 4,000-kilometre pipeline was supposed to connect Hardisty, Alta., to Saint John, but was effectively nixed due to lengthy regulatory delays.
The federal government should approach TC Energy (and other domestic energy companies, if necessary) about reviving the project and clearing regulatory hurdles. This should be a no-brainer for Ottawa, especially at this juncture. This latest U.S.-Iranian crisis underscores why reliable access to energy is a matter of national security for Canadians. The Trans Mountain pipeline expansion, which will eventually twin Canada’s only oil pipeline to the West Coast, won’t solve that problem on its own.
Canada also needs a reliable way to transport landlocked Western Canadian crude to East Coast refiners, which are currently dependent on foreign oil imports. Irving Oil Ltd.’s Saint John refinery, for instance, uses Saudi Arabian crude – which is ridiculous given the kingdom’s irrational trade and diplomatic rift with Canada.
The Saudis are not our friends. It wasn’t that long ago that a Saudi group tweeted an image that showed an Air Canada plane flying toward the CN Tower in a 9/11-style attack – all because Canada levelled legitimate criticism of its jailing of human-rights activists. Yes, apologies were later issued and the Twitter account shuttered. But the chilling image – which included the text: "As the Arabic saying goes: ‘He who interferes with what doesn’t concern him finds what doesn’t please him'” – shouldn’t be forgotten by Canadians.
Eastern Canada can’t afford to be at the mercy of foreign oil producers. Last September’s attack on Saudi oil infrastructure sent East Coast refiners scrambling to secure crude supplies and drove up fuel costs. These days, the prospect of more attacks on Saudi oil facilities looms large. Make no mistake, such retaliation would be acutely felt by Eastern Canadians in the form of higher gasoline prices if local refiners have to pay higher prices for imported crude.
Resuscitating Energy East would also help oil sands producers tap new markets because East Coast facilities are equipped to handle the ultralarge crude carriers needed to ship domestic products to energy-hungry markets in Asia. It’s illogical that the world’s largest refinery, located in western India, owned by Reliance Industries Ltd., receives supertanker shipments originating from countries as far flung as the United States, Mexico and Venezuela but Canadian oil, relatively speaking, barely registers on its radar. It’s a disparity that Alberta Premier Jason Kenney has highlighted in recent years.
Reviving Energy East is an opportunity to safeguard Canada’s energy security and to ensure that our domestic producers can meet global demand over the long term. Asian economies will require Canadian oil long after the current U.S.-Iran crisis.
We’ve learned the hard way about the dangers of being overly reliant on the United States. Let’s face it, the Keystone XL pipeline is no closer to being built. It’s time for the Trudeau government to show real leadership on the energy file by reviving Energy East, providing regulatory certainty and putting an end to interprovincial bickering over pipelines. After all, if we don’t look after our own energy interests, no one will.