Under NAFTA, Canada Obligated To Ship Same Proportion Of NatGas To US, Despite Looming Shortfall

[hatrack]

There is a strange clause in the North American Free Trade Agreement (NAFTA) that applies to only one country—Canada. The clause states that Canada must continue to supply the same proportion of its oil and gas resources to the US in future years as it does now. That’s rather a good deal for the US: it formalizes Canada’s status as a resource satellite of its imperial hub to the south.

From a Canadian perspective there are some problems with the arrangement, though. First is the fact that Canada’s production of natural gas and conventional oil is declining. Second is that Canada uses lots of oil and gas domestically: 70 percent of Canadians heat their homes with gas, and Canadians drive cars more and further than just about anyone else. The problem is likely to come first with natural gas; as production declines, there will come a point when there isn’t enough to fill domestic needs and continue to export (roughly 60 percent of Canada’s gas now goes to the US). That point is not decades in the future, it is fairly imminent.

Then there is the problem of Climate Change. Canada is committed by treaty to reducing domestic emissions of carbon dioxide. But most of Canada’s emissions come not from consuming fossil fuels, but producing them—increasingly, from producing synthetic diesel fuel from the tar sands of Alberta. Even if Canadians decide to drive less and turn down their thermostats, those efforts will do little or nothing to change energy production rates (hence emissions rates), because any extra amounts of fuel produced but not used domestically will simply be exported south; in fact, they virtually must be by the terms of NAFTA.

So Canada’s energy security and global climate security are both held hostage by a provision within a trade agreement—a provision that is unique in all of the world’s treaties. Canada has every reason to repudiate the proportionality clause, and to do so unilaterally and immediately. Of course, the current Canadian government will not do so. Nor will the main opposition party. Both are securely bound to do the will of their puppeteers in Washington. But what about the NDP, Canada’s other main (center-left) party? Couldn’t it make the abolition of the proportionality clause a key campaign issue? Surely Canadians care about energy security and simple fairness. By raising the question, the NDP would educate Canadians about the links between fossil fuel depletion, globalization, and climate change, while forcing the other parties to either identify themselves with, or abandon, a policy that imperils their nation’s future.

EDIT

http://www.energybulletin.net/40035.html

[LiberalFighter]

1. Then Canada needs to opt out of NAFTA

[Obamaniac]

2. Proportion doesn't equal quantity...

If Canada does suffer a shortfall, it's "proportion" shipped to the US will obviously diminish accordingly.

Proportion just means percentage of oil/natural gas that it extracts. If it extracts a lot, the US will get a lot; if it extracts a little, well you get the picture.

[GliderGuider]

3. Which is all well and good...

So long as the proportion of our oil that we are allowed to keep remains above our domestic requirement, then we're fine. But our demand is increasing, our conventional crude production is falling, and the tar sands will hit a wall(*) within the next 5 years that will limit or halt their production growth. When that happens, all bets are off. We will be abrogating NAFTA within the next 10 years due solely to Article 605, but the political and economic fallout from that process will be really ugly.

(*)The wall the tar sands will smack consists of: declining gas supplies, increasing capital and operating costs, and massive pollution. In a way the tar sands are a microcosmic illustration of what I call The Converging Crisis: a convergence of problems in the domains of energy, ecology and economics.

Paul Chefurka
Ottawa

[Vincardog]

5. IF they need 1,000,000 CF for domestic requirements and they produce 2,000,000 CF

the 60% proportionality requires them to send 1,200,000 CF to the US leaving their market 200,000 short.

[mac2]

9. BP (British Petroleum) runs our oil fields in Alaska but refuse to pay royalities

They have lots of gas reserves from the oil fields. They profit on our resources and polute the water and land without concern.

They now own much of our solar power energy companies in the US too. They bought much of the NE energy companies and Niagara Falls Mohawk Power(sending our power to Toronto, CN). Wonder who arranged that? Bush and Blair. We don't owe them a thing.

That little island of Britian sucks off the world and gives nothing back. They deney the Niagerians oil for their generators in a country rich with oil.

The evil Empires are: US\Britian\Isreal. We've gone from being a hater of Empire to being one. Who gave them permission? No one.

[Name removed]

11. Deleted message

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[ConcernedCanuk]

4. I read something on this years ago - and I think the agreements expires around 2008 - 2010

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I also had a link, now gone, that shows the "Trans-Canada" pipeline is really a trans-continental pipeline, it's major lines end up in the USA.

I think we may have gotten sold out, and the impending sellout dates are now under Harper's control, a known Bush PNACer supporter if I ever saw one . .

I KNOW they are up for renewal very shortly - maybe it's already a done deal, and our government has prostituted our resources to the USA, again . . .

[mac2]

10. It is our gas and should end up here.

We the American tax payers paid for it. It comes from Alaska.

[Nihil]

6. Declare force majeur and wave two fingers at the agreement.

It works for African nations so why not for Canada?
:shrug:

[GliderGuider]

7. If Canada's supply/demand situation changes that would be a good approach!

I wonder it the Yanks would agree to just take Article 605 out of the agreement in such a situation, or whether they'd insist that we abrogate and renegotiatte the entire treaty? It would be "interesting", for sure.

[mac2]

8. The British are stealing our power so we should op out of NAFTA

While people complained about the bad business of Enron in California another swindle was going on in New York State. The British were stealing Niagara Mohawk Power for their own profit and Toronto, CA use. The federal government and the governor of NY sold out the people of Buffalo.

I would not be surprised if the gas in NY State was also owned by them.

http://www.answers.com/topic/Niagara-Mohawk-holdings-inc?cat=biz-fin That buyout of Niagara Mohawk power was completed in 2001 with shareholders and regulators permission (federal government Energy Department).

Why would nuclear power be put under Niagara Mohawk from the other part of the state or NE region except to steal Niagara Mohawk Power later on?

Britain's National Grid Group PLC agreed though acquire Niagara Mohawk Holdings, Inc. in a plot to consolidate US Power companies.

National Power grid two earlier US acquisitions of New England Electric Systems and Eastern Utilities Associates happened earlier.

British electric company's strategy has been adding to its holdings in the Northeast corner of the US. Niagara would be a "bridge" in that region. They promised to run the US power plants and bring about a profit (for themselves not the power customers). A bridge to stealing power for Canada they mean. It was also a set up to control prices for profit for themselves off the Northeastern US.

How dare any US regulatory agency allow such a merger and sale to a foreign country. Toronto, CN uses a lot of Niagara power for themselves leaving higher prices and less power for industry in Buffalo. Cheap safe power is gone.

Mohawk power was built at great expense by the citizens of Buffalo, NY to increase their ability to bring industry to the region. How dare they "privatize" it by breaking it up and bringing it together as something else to be purchased on the open market.

You have heard of the Republican governor of Indiana selling a highway to Spain, etc. didn't you? The Democratic governor before him just happened to have a heart attack when he was visiting Chicago.

Republicans has stolen and sold off our most precious resources to foreign countries without citizen permission. This is happening all over our country without media attention or outrage.

I have no problem with British business people grabbing what they can. It is the fault of our government who has not protected our best interests and property. The British do what they've always done...try to steal our wealth and our assets. They have little of their own. This all started with Reagan selling them our gold and mining.

To top it off...drugs invented in this country (with our tax dollars) are manufactured in Ireland, etc. They profit off us. Many of our manufacturing companies are now British (such as Ford).

Tony Blair helped Bush lie us into war. Their banks profit on off-shore islands. London is full of international banks fat on our wealth. Like the Spanish they are out to rob everything we have for themselves. Was that discussed by any candidate except to say...NAFTA is bad for us? It's a lot more than that is at stake. Our democracy is being stolen (and in debt) by their corporations and wars for oil. We are no more to them then the Scottish and Irish they sent off to their wars of Empire.

Am I angry at the British people? No. It's their elite few along with our own who are robbing us blind everyday. Make no mistake a bunch of European elites are out to destroy us and Republicans (along with some Democrats) turn a blind eye.

The X-Governor of New York State Pataki who did the deal with Britain for Niagara Mohawk power should be put in jail for treason and fraud. He was put out of office between that and 911. 911 hid all the dealing going on for the grab I'm sure. Give us back our power and energy companies now. They belong to the citizens who paid for them.

http://en.wikipedia.org/wiki/George_Pataki#Bilderberg_conference_2006 Pataki attended the 2006 Bilderberg Group. In 2007 Bush gave him a UN appointment. DA!

The Statue of Liberty was "privatized". What an outrage. When I called Senator Clinton about it she said, she tried to stop it but couldn't. How about getting it back. That was an insult to our democracy. The people paid for it (French gave it as a gift) and paid to repair it.

Governor Pataki did a lot of damage before he was gone. Not only that but he failed to protect NY City from attack on 911.

I wasn't in NY State when this happened so I didn't see anything local about it. I know my friends in Buffalo were uncomfortable talking about it.

A book to read about the sale\theft\robbery of our Common resources and wealth is a book called: Silent Theft by David Bollier.
http://www.amazon.com/s/ref=nb_ss_b/104-7611448-5773515?url=search-alias%3Dstripbooks&field-keywords=Silent+Theft

I know you have fought to prevent much of the privatization in the US but few people know about it. How about a list of all sold since Bush stole power?

The people of NY York State\Buffalo should sue the federal government for this theft.