Energizing the Race to the White House

Both U.S. presidential candidates want to revamp the country’s energy policies to strengthen strategic self reliance and accelerate the shift toward greener energy.  Both want to reduce America’s dependency on oil from unfriendly regimes. 

"We are going to stop sending $700 billion a year to countries that don’t like us very much" said John McCain to cheering delegates during the Republican Convention last August.  "We will attack the problem on every front.  We will produce more energy at home.  We will drill new wells offshore, and we’ll drill them now," he added.

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Senator Barack Obama also supports reducing America’s dependence on foreign supply sources and also uses the $700 billion figure.  However, he is more cautious about the alternatives.  He supports drilling along the Outer Continental shelf but wants companies to focus on areas they already lease from the federal government.   "Drilling is a stop-gap measure," Obama says, "not a long-term solution."

Last year the U.S. imported 4.9 billion barrels of oil and refined products, 16% of it from the Persian Gulf. Canada - the largest source of ‘foreign’ oil imports - shipped on average 1.8 million barrels of oil a day to the U.S., 18% of U.S. oil imports. 

Canada is the only country of the top 5 ‘US friendly’ supply sources that is able to increase production. However, a significant problem for environmentalists is the fact that most of the potential increases in Canada’s oil production will come from further expansion of the Alberta tar sands - which generates five times the greenhouse gases as regular oil production.

Early in the campaign a warning message was sent to Canada about continued imports of ‘dirty oil’.  A senior adviser to Obama’s campaign told reporters it’s an ‘open question’ whether oil produced from northern Alberta’s oil sands fits with the Democratic candidate’s plan to shift away from consumption of carbon-intensive fossil fuels.

The warning was dismissed by Alberta Premier Ed Stelmach as campaign rhetoric that would give way to economic realities after the November U.S. election.

Both Obama and McCain advocate a range of renewable energy sources.   Obama wants one million Plug-In Hybrid cars on the road by 2015 and that 25% of US electricity come from renewable sources by 2015.  He supports an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80% by 2050.  

McCain supports construction of 45 nuclear power plants by 2030, which he views as "a zero-emission source of energy". He also backs solar, wind, and tidal energy and wants to eliminate tariffs on imported sugarcane-based ethanol.  

Each candidate references ‘clean coal’ in their respective climate change policies, almost as if carbon capture and storage from this energy source was a ‘plug and play’ technology option. Industry leaders have called for government funding to prove out the technologies required for large-scale systems to capture and bury carbon dioxide from coal combustion.

While the call to end America’s dependency on foreign oil plays well on the campaign trail, there is a broader strategic agenda at play here. Both Obama and McCain know that change is required in U.S. climate change and energy policies if the country is to regain its status as the world’s top economic superpower. And in these turbulent times in global financial markets - caused in large part by massive failings in the U.S. banking system - that imperative is doubly important.

Where Canada fits in is still an open question. Clearly the U.S. will continue to regard Canada as its number one source of ‘friendly’ oil. And the oil and gas sector in Canada, as well as the governments of Alberta and Canada, will undoubtedly be eager to exploit the economic opportunities associated with that reality.

But with much of the increased oil supply required to end U.S. reliance on oil from unfriendly regimes coming from Canada’s tar sands, keeping billions of American dollars closer to home may well serve short term economic and political objectives, but may challenge the environmental agenda over the longer term.