Steve Lillebuen, edmontonjournal.com
Published: Wednesday, May 28, 2008

EDMONTON - Canada could soon be forced into feeding America's growing appetite for oil and gas, even if energy shortfalls for Canadians loom on the horizon, a new report says.

But the upcoming American presidential election - with candidates suggesting they'd renegotiate NAFTA - is an opportunity to defuse the threat, says the report, released today by the Parkland Institute, based out of the University of Alberta.

"It hasn't dawned on most Canadians that their governments have signed away their right to have first access to their own energy supplies," the report states.
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A proportionality clause in NAFTA will prohibit Canada from cutting energy exports to the U.S., which now hover around 60 per cent of national production.

The clause is currently not in use, but could be evoked in the future. Mexico did not sign such a clause.

The findings aren't new, but build upon a preliminary report released by the institute in 2005.

While NAFTA once had an upside for Canada, the era of growing energy shortages and continuing fuel price increases place the nation at a huge disadvantage, said Gordon Laxer, the report's author.

"Proportionality means Canada will be the international bad boy of environmental destruction," he said. "We will produce all those greenhouse gases for energy, which is mainly shipped elsewhere."

Canada imports half of its oil needs, relying on insecure sources, and has no strategic petroleum reserves at this time, he said.

And cutting the country's energy consumption won't lead to cuts in oil and gas production since NAFTA forces Canada to make at least half of its gas available for American export.

"(This) means Canadian oil and natural gas supports U.S. energy security while leaving Canadians and Albertans wide open to shivering in the dark in the near future," he said.

Three scenarios calculated in the report describe how the clause places restrictions on Canada developing a comprehensive energy security plan.

A Mexican-style exemption would require overturning NAFTA and Canadian legislation that keeps the proportionality clause in place, even after NAFTA's demise.

slillebuen@thejournal.canwest.com

http://www.canada.com/calgaryherald/new ... af935c4c59