OP-ED: Iran crisis exposes Canada’s energy vulnerability
"One of my main preoccupations, as president of Canadians for Affordable Energy, is closely watching the fluctuations in our gas and diesel market and predicting where it will go."
Author: Dan McTeague
One of my main preoccupations, as president of Canadians for Affordable Energy, is closely watching the fluctuations in our gas and diesel market and predicting where it will go for the benefit of our supporters, something I’ve been doing for the past twenty years.
And, boy, has that market been fluctuating this past week!
No surprise, of course – the decades-long cold war between the United States and Iran has suddenly gone hot, with major implications for global oil markets. Remember that about 20% of the world’s oil passes by tanker through the Strait of Hormuz, which Iran effectively shuts down at the first sign of trouble, one of the secrets to their regime’s longevity. Consequently, the price of a barrel of oil has jumped from about $65 to over $90, and climbing.
This has driven a rapid rise in gas and diesel prices right across Canada. By Saturday, gasoline will have climbed roughly 16 cents per litre throughout most of Canada, while diesel will have surged even more dramatically, up about 40 cents per litre in the same period.
We’re all being hit hard, right in the wallet, whenever we fill up. And diesel’s steeper climb is especially concerning because it hits transportation – planes, trains, trucks – which flows through to higher costs for groceries, building materials, and virtually everything else we buy. We’re already seeing the early signs of broader inflation pressures from this.
We were on the verge of a cost-of-living crisis before now, and this could well push us over the edge. And the weakened Canadian dollar – partly the result of divestment strategies pursued by Net-Zero libs over the past decade – compounds the problem, since commodities like oil are priced in U.S. dollars. Our crumbling purchasing power adds 24 or 25 cents per litre to our fuel prices, even when there isn’t a war on.
We no longer have the natural shield against higher energy prices we did in times past.
Now, all of this is a reminder that, as far as energy is concerned, we are utterly at the mercy of events far beyond our borders. And, as a country with the vast proven reserves of oil and natural gas that we have, that just shouldn’t be the case.
If we want to protect ourselves against global instability, the only realistic way to do that is to chart a new course, and invest in our own natural resource sector, becoming the energy superpower we have the potential to be.
Oil and gas is already the backbone of Canada’s economy. It provides hundreds of thousands of good jobs. It is our leading export sector, generating hundreds of billions of dollars in revenue, and the only sector which runs a trade surplus. It generates tens of billions of dollars in taxes for our federal and provincial governments every year.
All that, despite the fact that our leaders are embarrassed by it. More than that, the Liberals under both Trudeau and Carney have committed our country, in law, to achieving Net-Zero by 2050, which means, in practice, shutting down the oil and gas industry entirely.
Think of how much better of a situation we’d be in if Ottawa were to take a completely different tack. If it were to slash all of the red tape and other onerous regulations and legislation which are strangling investment – I’m thinking of Bills C-69 (the “no new pipelines act”), C-48 (the Oil Tanker Moratorium Act), C-59 (which bans companies from promoting the environmental positives of their work if they don’t conform to a government approved standard), the Clean Fuel Regulations, the Industrial Carbon Tax, etc.
And if we were to then build out the energy infrastructure which we are sorely lacking – especially pipelines – and unleash our incredible energy capacity.
That would strike a major blow for affordability here at home, bringing down prices across the board. It would bolster our dollar, enabling us to pay down our sky-high debt. It would also let us step up as a reliable global supplier, filling the gap left by war-related disruptions first by Russia’s aggressive actions in Ukraine and now the war in Iran.
Afterall, given the option, the nations of the world would much prefer to do business with us than with those nations, especially considering our superior environmental standards and human rights record. But they need fuel just like everyone else, and they’re going to get it from somewhere.
Unfortunately, our present government is unlikely to do any of these things, and years of green utopian fantasies have left us exposed. We’ve blocked infrastructure, discouraged development, devalued the Loonie, and chased unproven alternatives while allowing our abundant fossil fuels to languish.
This latest price surge should serve as a wakeup call. Canadians deserve energy security and affordability. It’s time for Ottawa to get serious: prioritize our own resources, protect consumers, and build a stronger energy future.