Wednesday, February 22, 2012

Energy Security: America Needs Canada


Energy Security: America Needs Canada....why does Obama give Alaskan islands that are oil rich to Russia and reject this????




In a surprising move, President Barack Obama’s administration recently rejected TransCanada’s Keystone XL pipeline proposal – a proposal that would have shipped one of Canada’s most prominent natural resources from Alberta’s oil sands all the way to Texas.
The White House’s decision has Canada looking for new markets to which it can export its oil. Canadian Prime Minister Stephen Harper was in China last week to explore how ties between the latter and his country can be deepened.
Although many are quick to announce the sky is falling, in fact the current reality is but a temporary space in which American politics take centre stage. With Obama’s re-election campaign just around the corner, the incumbent president needs to secure his political base – which includes environmentalists – before November’s vote.
Canada and the United States recently signed a “Beyond the Border” perimeter security deal that will see the two sides “draw a line” around the North American continent in order to speed up the trade flow across the 49th parallel. A natural follow-up to this deal would be North-American energy security, possibly in tandem with a common environmental standard being established between the two nations.
It is in the fundamental interest of both Canada and the U.S. for an oil pipeline between the two countries to be built – like it or not – and hence such a pipeline will be built. The only question is when. Ninety percent of Canadian exports – including 97% of Canadian oil - are currently sent to the United States. The two countries have no choice but to stay best friends.
No matter how much Canada tries to diversify its export market, the reality remains that Canada is dependent upon the United States. Rather, the question that needs to be asked now that Canada will begin to seek closer integration with Asian markets is, “How will the Canada-U.S. security relationship be affected?”
A likely battleground in which this new found Canada-U.S. tension will play out is in the Arctic. As much as 25% of the world’s crude oil reserves are believed to be located in the Arctic. Furthermore, as climate change causes the Northwest Passage to thaw, demand for access to this key international shipping lane will increase.
China is both thirsty for oil and searching to gain access to key choke points in the international shipping system, having already secured the support of key players in the Pacific Islands and in the Panama Canal region. Canada’s Arctic region is sure to be on Beijing’s radar as the latter continues to expand the capabilities of its navy.
It is in the fundamental interest of both Canada and the U.S. for an oil pipeline between the two countries to be built – like it or not – and hence such a pipeline will be built. The only question is when.
A Canada with deeper ties to Asian markets is a Canada that will be able to act as an interlocutor between China and the United States in the Arctic. Canada comes away from the recent Keystone-XL incident as a big winner.
On the other hand, the United States will have to go beyond reviving pipeline discussions in order to regain the confidence of Canadians. If America maintains its current position that the Northwest Passage be an international strait and not revert to Canadian sovereignty, Western interests as well as the Canada-U.S. relationship will take a beating at an inopportune time.
Whoever the President of the United States happens to be on January 20, 2013, he’ll have considerable work to get the Canada-U.S. security relationship – of which energy security is a key component – back on track.
This president will, without question, approve the construction of an oil pipeline emanating from Canada. What needs to take place thereafter, however, is twofold:
First, negotiations need to begin on a common environmental standard pact and a common energy zone between Canada, the U.S. and possibly Mexico. This will ensure the sustainability of the Canada-U.S. energy relationship for decades to come – both when it comes to the environment and when it comes to the price of energy. Furthermore, it will protect Canada’s energy sources from the wrath of American bureaucracy which may seek to exploit loopholes in the Canada-U.S. Free Trade Agreement.
Second, Canada and the U.S. need to begin sorting out their differences over the Northwest Passage. If they do so, they can together hold much more leverage in negotiations with the Russians and Chinese over the territory in question. Together, Canada and the United States can ensure that the only interactions between Western and Eastern powers in the Arctic are economic – and not military.
The Keystone XL pipeline question isn’t isolated. Rather, it forms an integral part of North American security. With American energy interests in the Middle East possibly jeopardized by Iran’s bellicose rhetoric and with China’s rise coinciding with that of climate change, American leaders better put partisan politics aside sooner rather than later.
Zach Paikin is a Canada-based research associate at the Jewish Institute for National Security Affairs.
http://jinsa.wordpress.com/2012/02/15/energy-security-america-needs-canada/

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