Superpower? Oil could make Stephen Harper a superhero

The Globe and Mail

March 12, 2009

Leaders of minority governments are often too mired in coalition-building or pursuing short-term policy fixes to spout visionary language about foreign policy. Yet, on the first stop of his first trip abroad as Prime Minister, Stephen Harper struck a surprisingly bold note.

In a speech in London, he referred to Canada as an "emerging energy superpower" and backed his claim with a cluster of statistics that were to become a feature of his foreign speeches: "We are currently the fifth-largest energy producer in the world. We rank third and seventh in global gas and oil production respectively. We generate more hydro-electric power than any other country on Earth. And we are the world's largest supplier of uranium."

That was 2006, and since then he has repeated his mantra often enough to suggest that he actually means it. But Mr. Harper didn't stop here. While in Sydney for the Asia-Pacific Economic Co-operation Summit last September, he upped the ante, proclaiming that Canada could and should become a " clean energy superpower" - clearly a response to those who accuse his government of disregarding the country's commitments to the Kyoto climate accord. He assured his audience that "Canada is ready and able to take on the challenge of global warming," adding that it's vital that the extraction and use of its resources be environmentally sustainable because energy "increasingly defines our place in the world."

But what exactly is an energy superpower and does Canada fit the role? What's more, do Canadians even want it?

BOTH CARROT AND STICK

The term "superpower" was introduced to the lexicon of international relations in 1944 by Columbia University's renowned foreign-policy expert W.T.R. Fox because the traditional notion of a "great power" no longer conveyed the true might of the United States and Soviet Union. (Interestingly, he applied the term to Britain as well.)

In short, superpowers are states that can exert their power and influence events on a worldwide scale. Both aspects are crucial. Superpowers are often identified through their possession of "hard" resources such as tanks and soldiers, but their greatest force is political. Other states' foreign policies are defined in large part by their stance toward the reigning superpowers, which often claim special rights (such as the right to interfere with their neighbours) and responsibilities (such as managing threats to international peace and security). As well, superpowers have interests that extend beyond one region. As international affairs historian Alfred Zimmern once put it, the foreign minister of a superpower "is concerned with all the world all the time."

The idea of an energy superpower began during the oil crisis of the 1970s when energy producers could use their power to influence prices, although doing so depended on co-operation among many nations. That changed in 1978 when the Iranian revolution, followed by Iraq's invasion of Iran, prompted oil prices to jump from $14 (U.S.) to $36 a barrel in 1980 (about $90 in today's dollars). Forbes magazine dubbed Iraq an "oil superpower," but in a few years prices collapsed and its super powers were all but forgotten.

But now that prices have risen again, scholars and journalists have come to consider an energy superpower a country with:

Abundant resources (oil and now natural gas as well) and enough control over those resources to set prices, either by using the market or by withholding supplies;

Market control beyond its own region and a government able to leverage its energy resources for political purposes;

The willingness to use its energy resources to force others to do what they otherwise would not do.

These criteria quickly make it clear that Mr. Harper's rhetoric is getting ahead of reality.

First, we produce a great deal of crude oil (and could, unlike many countries, produce more), but our natural-gas output is in decline. Also, the oil increasingly comes from the sands of northern Alberta, which makes extracting it a challenge, technically and from an environmental perspective.

The fact that we're the top oil supplier to the United States is important, but our current output of less than three million barrels a day isn't enough that we can influence world prices. Moreover, given that natural resources fall within the provincial purview, federal control is tenuous at best. Even if the Prime Minister wished to withhold supplies to gain an advantage, he would have to invoke some extraordinary powers.

And whose supplies would he withhold? All of Canada's gas exports and 98 per cent of the oil go south of the border. Unless Canada breaks the North American free trade agreement, it cannot restrict these exports - limiting our ability to use energy as a bargaining chip.

Finally, and most important, Canadians would like to be a positive influence on the global stage again, but they have shown no interest in trying to impose Canada's will on others. It's not even clear how the government would define this "will," beyond claiming it wants to get tougher about Arctic sovereignty.

When asked what kind of foreign policy he is pursuing, the Prime Minister talks generally about a "more robust version of Canadian nationalism," one that involves taking pride in our military history and leveraging the size and potential of the country. But he has yet to articulate just how this would differ from the "soft" and "anti-American" approach of the Liberals.

Even if other countries were to accept Mr. Harper's energy-superpower claim, persuading them Canada's a "clean" one is a tough sell. After all, renewable resources (an imperfect but useful proxy for clean energy) account for 15 per cent of all energy produced in Canada - barely above the world average of 14 per cent and significantly below Brazil's outstanding 45 per cent.

And given that the increase in Canada's energy resources is to come from developing the oil sands, where extraction emits on average three times the greenhouse gases of conventional production, it is hard to imagine how the Prime Minister can make good on his promises.

THE RUSSIAN REVOLUTION

Not only does the case for Canada as an emerging energy superpower seem shaky, there is competition for the role.

Russia has energy statistics that are just as impressive: the world's largest reserves of natural gas, second-largest of coal and eighth-largest of oil. But it is in the export markets that Russia truly shines. It is the biggest exporter of natural gas and the second-largest producer and exporter of oil.

More significant, President Vladimir Putin has been systematically regaining control of his country's energy production and transportation. He began by consolidating oil assets under state-owned Rofsneft and using it to secure a loan from Western banks to buy a majority stake in Gazprom, the country's natural-gas giant. This, along with Transneft, the state-owned oil pipeline monopoly, gave him the base he needed.

Then he gambled on the greed of Western investors and, on the very day that Stephen Harper was in London singing Canada's praises, sold 15 per cent of Rofsneft in the fifth-largest initial public offering in history. The profits paid off the Gazprom loan, thus bringing the bulk of Russia's energy assets into state hands.

And Mr. Putin seems to have no qualms about turning resources into political weapons. Moscow has shut off pipelines while renegotiating oil contracts with former Soviet republics and now is leaning on Belgrade in a bid to control Serbia's energy sectors.

In Canada, however, poll after poll demonstrates that the public prizes co-operative diplomacy and playing the "good guy" internationally. As one astute observer of our national character, pollster Michael Adams, wrote in this newspaper not long ago, we have "a low tolerance for macho brashness." Canadians may condone a degree of assertiveness on such issues as sovereignty in the North, he argues, but "will remain committed to international institutions that facilitate dialogue."

The musings of Foreign Affairs officials suggest that the term "energy superpower" was never meant to suggest this kind of power projection. The goal was to have Canada show that it could be a "different" kind of superpower, one that would use softer tactics and instruments.

But policy-makers cannot simply snap their fingers and redefine the diplomatic terms. Moreover, even as an aspiration, the mantle of energy superpower may not suit where Canadians feel the country is headed. For perhaps the first time, we are beginning to face up to the negative origins and connotations of our wealth. The rising tide of prosperity that is "lifting boats" in Alberta also threatens to damage the environment severely, just as Saskatchewan's uranium is raising questions about who will use it and where the waste will go.

A genuine reassessment of Canada's role in the world needs to take into account both our energy and our environmental realities. Will we go back to being the "world's peacekeeper" and wish these dilemmas away?

PARTNER, NOT POWER

The world doesn't need Canada to be an energy superpower, but it does need us to have ideas and to take the initiative on the two key issues confronting advanced economies: competition for resources and greater environmental stewardship. In short, Canada's challenge is to act as a responsible energy partner.

Recently, all eyes have been on Canada's performance in global efforts to create enforceable commitments to reduce emissions of greenhouse gases.

But a responsible energy partner does more. It keeps rhetoric to a minimum and assumes full responsibility for the challenges presented by developing its assets. It makes its domestic and international policies consistent and coherent and it shares its know-how and successes with others. And it takes every opportunity to build bridges to those who are vital to the resolution of common problems.

A few examples illustrate what this role could entail.

Security guards: Although the concept of energy security hasn't been greatly discussed in Canada, the eastern oil market depends on foreign supplies, which may not be readily available in the future. Also, with natural-gas production in decline, governments and industry need to look ahead now. Canada must ensure that oil from the West can reach every quadrant of the nation and that imported natural gas can reach both the Canadian and U.S. markets.

Shared knowledge: At a time when carbon is increasingly constrained, growing oil-sands production calls for new technology to meet the need. Currently, our governments finance the development and testing of technology, but leave the rest to the private sector. But there are more effective models of public-private partnership, including the one pursued in Alberta when Peter Lougheed was premier in the seventies and eighties. Government not only helped to create something new, it retained the rights to make it available at a fair price. Canada translate this internationally and inspire a new, more collaborative approach to tech development around the world.

Freer trade: Canada could foster a global market for biofuels. In contrast to the current policy we push at the World Trade Organization - where we defend free trade and yet remain effectively closed to trade in many agricultural commodities - we could become the first member of the Organization for Economic Co-operation and Development to drop all tariffs on biofuels trade. This would ensure that the biofuels Canada consumes - such as ethanol in our gasoline - represent a net environmental benefit to this country.

Bank building: We could help to ensure that civilian nuclear programs around the world spark no further attempts to build weapons. Encouraging compliance with the Nuclear Non-Proliferation Treaty isn't enough; perhaps it's time to tear a page from U.S. presidential contender Barack Obama's policy book and work toward creating a nuclear fuel bank. It would buttress supplies, assuring countries that they will get their fuel and giving them less reason to build their own enrichment facilities.

A responsible energy partner also needs to confront the challenge of nuclear waste, a highly controversial subject. Our current strategy is to have nothing to do with such waste, but how long can the world's leading uranium producer not help to develop the means to reprocess and dispose of nuclear fuel? After all, Canada is one of the more secure countries able to take on this task.

On the domestic front, the tables have already turned on some of these issues. Who would have thought that one day Tom d'Aquino, head of the Canadian Council of Chief Executives, would be on the same page as the loudest environmentalist in calling for measures against carbon? Who would have predicted any Albertan, let alone David MacInnis, president of the Canadian Energy Pipeline Association, would be encouraging a national policy that integrates energy and the environment?

The next step is to adopt this new kind of thinking internationally. Foreign-policy analyst Derek Burney, a former ambassador to Washington, captures the spirit when he says that to leverage its energy resources for positive political ends, Canada must "develop a policy on energy extraction and transmission that is coherent and an environmental policy that is complementary."

This suggests that Mr. Harper needs to focus less on sustaining rhetoric that lacks credibility, and more on articulating a strategy for Canada's global role that is realistic and resonates with the public.

Is this too much to ask of a Prime Minister saddled with a parliamentary minority? As historian and former MP John English has noted, Lester Pearson never had a majority government, yet he left a legislative legacy that still defines our country.

If Mr. Harper can fashion a realistic and compelling vision for Canada's global role - one that acknowledges our advantages in energy, concern for the environment and belief in international co-operation, rather than making a claim for Canada that is "un-Canadian" - scholars may be saying much the same about him in 40 years.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.

About the Authors

Jennifer Welsh is the Canada 150 Research Chair in Global Governance and Security at McGill University, and director of the Centre for International Peace and Security Studies.