Increasing concern over the continuity of supply from some of the world’s largest producers of energy resources is helping position Canada as an emerging superpower in global energy markets. The question is, will Canada seize this prize?
ENERGY
The country not only has some of the world’s largest reserves of oil and gas, it is also a major player in the international market for nuclear reactors, the largest exporter of uranium, and a major producer of energy-efficient technology such as mass transit systems.
These factors combine to make Canada an extremely attractive target for international energy investment and a serious exporter of technology and expertise.
Jason Langrish, executive director of the Toronto-based Canada Europe Roundtable for Business (CERT) and president of CERT’s Energy Roundtable, says that a large portion of Canada’s energy resources are “unconventional” – oilsands, uranium, renewable energy technology and nuclear technology.
“Canada’s challenge is to determine how best to maximize the potential of its energy resources and expertise given the environmental, labour and economic issues that the country faces, particularly around the oilsands,” says Mr. Langrish.
But while attracting foreign investment to oilsands projects and improving the efficiency of extraction techniques remains an important focus for the energy sector, securing the country’s energy resources is also a high priority.
“For example,” says Mr. Langrish, “how Canada intends to establish sovereignty over the Arctic, which is believed by some to contain upwards of 20 per cent of the world’s remaining reserves of oil and gas, is a question many foreign investors will eventually want answered.”
The issue is somewhat academic right now because
the region is not yet fully accessible, but Mr. Langrish believes the Canadian government is correct in staking its claim early.
“Canada may not be able to defend its Arctic resources with military might, but there are other measures available to reinforce the country’s claim, such as aggressive stewardship and the development of infrastructure,” he says.
The response to questions such as how Canada will defend Arctic sovereignty are becoming more important to foreign investors as their existing
energy reserves are depleted and bilateral energy tiesbetween Canada and Europe – and the UK in particular – grow stronger.
This issue was addressed at this year’s Energy Roundtable conference, a CEO gathering in London, England, on September 18. The conference
theme – a transatlantic energy partnership – focused discussions on the future role of Canadian energy resources and the economic and geopolitical implications of investors shifting to these reserves and away from less secure sources elsewhere.
Of course, Arctic sovereignty is not the only controversial issue facing Canada’s energy sector. The anticipated global renaissance of nuclear power, particularly as a potential source of energy to power oilsands extraction processes, is another looming challenge.
Ken Smith, managing partner in the Toronto office of Secor Consulting, specializes in nuclear energy issues. He says nuclear power is being “rediscovered” as a clean and cost-effective alternative to carbon-fuelled electricity generation.
Mr. Smith believes that, as one of only three global players in the export of nuclear reactors, and the world’s leading exporter of uranium, Canada could become a substantial force in this sector.
“In developed countries that already use nuclear power, we can expect significant replacement and refurbishment activity and a rising demand for new generating capacity. In developing countries, such as China, which is facing increased resistance from trading partners over its use of coal to generate power, nuclear energy seems to be an obvious alternative,” says Mr. Smith.
Gerald Doucet, secretary general of the UK-based
World Energy Council, and former president and CEO of the Canadian Gas Association, says while there’s no doubt that Canada is an energy superpower, it has yet to achieve its real potential.
“The international community still has questions
about the Canadian energy sector,” says Mr. Doucet. “What’s needed is a blueprint for atruly national approach to energy that will solidify the country’s superpower status.”
He believes Canadian energy companies in general are too insular and need to interact more closely – particularly at senior leadership levels – with their global counterparts.
At federal government level, the strategic importance of energy seems to be downplayed at cabinet level. By contrast, ministers responsible for energy in other superpower nations such as Russia are extremely influential.
He says part of the problem is the apparent mistrust in Canada between governments and the energy companies.
“Clear and co-operative public/private partnerships are key to the development of a strong and sustainable energy sector, but Canada is not yet there,” says Mr. Doucet. “There is no national energy market, and many provinces seem to operate in isolation to what’s happening elsewhere in the country and internationally.”
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Associations and Partners also appearing in this report:
Deryk King
Chairman & CEO
Direct Energy
Don MacKinnon
President & CEO
Power Workers Union
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