The continuing Canada-U.S. spat over the building of the Keystone XL pipeline may be raising another bogeyman in bilateral relations: security of energy supply. When the Americans talk about security of supply, they aren't talking about security of Canadian energy supply, except as they perceive it to affect their own security. Even when the relationship is warmer than it currently is, issues of continental security are political red flags, and in the case of energy neither leader has been pouring much oil on troubled waters.
Referring to Keystone XL, U.S. President Barack Obama told The New York Times that "oil is going to be piped down to the Gulf to be sold on the world oil markets." That, plus TransCanada's announcement of the Energy East pipeline project, seems to have started something. A recent article by private news/intelligence analyst Stratfor of Houston has said baldly that "The possibility of large-scale exports of Canadian oil outside North America is not in the United States' best interest."
To an organization whose founder George Friedman was writing in 2011 that, "For the United States, Canada poses no threats," that is quite a turnaround. Does Canada now seem more threatening than it did in 2011? The geopolitically logical conclusion should be that non-approval of Keystone XL is also not in the U.S.'s best interest, no matter where the oil in it goes from the end of the pipe in Oklahoma.
It also helps to get the details right. One overwhelming fact, as the late U.S. Senator Henry 'Scoop' Jackson memorably told a U.S. Senate hearing on energy security in the wake of the first oil crisis in 1974, is that 'there are no facts'. (In the same segment on CBC's 'Up Canada' news show, the late Canadian cabinet minister Eric Kierans made the point, valid across four decades, that nobody knows for certain what oil reserves there are, because there is no absolute basis for calculation. "We make policy on what we thought (sic) was good analysis", Mr. Kierans said. "Without information, there can be no foundation for any kind of analysis.")
That hasn't changed, and it hasn't stopped states from trying to control an unknown quantity, in forty years. There is still no 'real' way of calculating energy (or oil) reserves because the concept is not an absolute one ('how much oil is in the earth?'), but 'how much is there that makes economic sense to extract and ship from point X to point Y at any given moment?'
A more current, pertinent fact: the U.S. is already moving toward strategic energy security, with or without Canada. Scientific American notes that 'according to the IEA's World Energy Outlook 2012 report, "by around 2020, the United States is projected to become the largest global oil producer," overtaking Saudi Arabia and allowing the country to become a net oil exporter by 2030.' Scientific American also – fascinatingly – goes on to point out that "American coal producers haven't stopped mining. But, this resource is increasingly being shipped overseas where Chinese and Indian markets are happy to absorb the excess."
So if you change the word 'oil' to 'energy', which you should outside a strict commodity-market context, the U.S. is already exporting energy to Asia. But it's the word 'China' that's the hot button.
One comment from one slightly-right-of-centre think-tank in the U.S. international relations cottage industry might not seem especially troubling, even to us sensitive Canadians, but the theme has kept coming up since at least 2011, when China began to show investment interest in Canadian energy, and in early 2012, when Prime Minister Stephen Harper made it clear to Mr. Obama that Canada was going to pursue alternative markets for oil in Asia. The issue made it into the U.S. presidential race thanks to Republican primary candidate Newt Gingrich, who said that Mr. Harper is a "conservative and a pro-American…and now Canada will be forced to sell its oil to China. An American president who can create a Chinese-Canadian partnership is truly a danger to this country." Generally, anything Canadian should prefer not to become a topic in a U.S. presidential campaign; it never seems to end well.
Ironically, since Canada approved the CNOOC-Nexen takeover last December, the issue of Chinese SOE involvement in Canadian energy has practically fallen off the radar. There are a few probable reasons for this; that the new Chinese regime is engaged in some major economic self-examination; that the Nexen deal (and its energy assets in the U.S.) satisfied China's immediate perceived need for an acquisition; and, that currently there is still no way to get massive quantities of oil out of Alberta to West Coast ports, a situation probably only made worse by the unforeseen issues in rail transport exposed by the Lac-Mégantic disaster.
Canada-U.S. relations are probably at their coldest since the Nixon-Trudeau era. On oil, Canada managed to draw more attention to itself than was useful by openly threatening the 'China card' when the U.S. under Mr. Obama was already feeling extremely insecure about its place in the world. On purely economic grounds, looking for outside markets makes sense, and as one source in the oil business puts it, 'we don't owe Obama anything.' He's right, but the fact that geopolitics keeps raising its ugly head suggests that Canada has some constructive engagement to undertake in Washington.
Eric Morse is a former Canadian diplomat. He is vice-chair of security studies for the Royal Canadian Military Institute in Toronto.