Obama’s giant aside on energy policy

Obama didn’t offer Republican and Wall Street doves a single friendly word during his interview yesterday with David Gregory on Meet the Press. However, in an aside on priorities for his second term, he did assert something potentially historic--an aside that deserves further attention in Ottawa and Western Canada at least.

Other than simply surviving Washington showdowns, Gregory asked Obama, what he’d actually like to accomplish during his last term as President.

Completely unprompted, he suggest that his number three priority could end up being oil and gas exports. Here, in his own words, is Obama's new energy vision:

“We've got a huge opportunity around energy. We are producing more energy and America can become an energy exporter.”

He didn’t say clean energy, energy independence, or even climate change. Instead, he ratified what is transpiring in the market place.

The US is coming back as an energy giant. US regulators are about to approve several liquefied natural gas terminals, dedicated to global markets. As is already true in Canada, the US could soon be a major oil exporter as well as a buyer in the international oil market.

How to champion a fossil fuel ‘Renaissance’ at home and undertake a constructive role globally in addressing climate change remains to be discovered and fought out.

Nevertheless, as energy policy, Obama has decided to throw his weight behind trade and against protectionism and relatively cheap crude oil prices domestically. This choice is of great potential importance to the politics of the Democratic Party and, by the way, to the fate of Stephen Harper’s Conservative government in Canada.

Last winter, Harper went whole hog in support of an extremely contentious and commercially fragile Canada-only oil pipeline to Canada’s West Coast because Obama delayed approval of the Keystone pipeline project. It sounded like common sense: The US isn’t co-operating and, furthermore, is now heading toward an oil surplus. Therefore, Canada is “land-locked” without new east-west pipelines to more lucrative markets across the seas.

The logic of this Canadian energy trade ‘emergency’ would make sense if Obama were following the logic of Pierre Trudeau’s nationalist energy policy (the NEP). If the US decided to produce an energy surplus to keep oil prices below world prices for American consumers, Canada would face being restrained and ripped off permanently as a oil seller.  

But, it appears that Democrat Obama has rejected that option. In fact, he appears to be committed to respect the logic of global commodity markets and the Canada-US Free Trade Agreement. In embracing American exports and American shale development, he’s effectively removed any credible reason to obstruct oil sands imports from Alberta, and the possible re-sale and re-export of Canadian produced oil to Asian markets.

If Obama honors the logic of his own statement yesterday, Canada won’t be land-locked.

Canadians needn’t be rushed to commit to another 20^th century 'nation-building' project and Canadian energy producers can feel confident that they’ll be able to compete fairly within and through the most laissez-faire energy market in the world.