Terence Corcoran pours cold water on the notion that this is the moment for Canada to become a major player in the world energy markets:
In recent weeks, Canada — a self-proclaimed global energy superpower — has been trying to throw its weight around over the Keystone XL pipeline, TransCanada Corp.’s $7-billion project to ship oil sands production from Alberta to Texas. In Houston on Tuesday, Natural Resources Minister Joe Oliver let the Americans know that Canada had other options. “What will happen if there wasn’t approval [of Keystone] — and we think there will be — is that we’ll simply have to intensify our efforts to sell the oil elsewhere.”
Canadian oil executives, who have a lot invested in the superpower notion, are also issuing aggressive-sounding statements aimed at the United States. A headline in The Globe and Mail Friday sounded like a threat: “Oil patch to U.S.: OK pipe or lose our oil.” The story didn’t quite back up the headline, but the sense was that Canada was developing alternatives and that China is the big alternative.
[. . .]
While Canadian government and industry officials have a lot invested in the idea of energy superpowerdom, few outside observers share the vision. Canada barely rates a mention in The Quest: Energy, Security and the Remaking of the Modern World, Daniel Yergin’s new book on the world energy market. A few pages are devoted to the oil sands, mostly to review the high costs and technical difficulties. “As the industry grows in scale, it will require wider collaboration on the R&D challenges, not only among oil companies and the province of Alberta, but also with Canada’s federal government.”
Far more impressive for the world’s energy future will be the impact of shale gas and shale oil. The “shale gale,” as Mr. Yergin calls it, has already transformed the U.S. gas market and shale oil could be next. Since Mr. Yergin’s book was written, the shale revolution has swept Europe and is about to transform China’s energy market.
