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Obama says Canada a "partner" in U.S. plans to make itself less dependent on oil

Wednesday, Mar 30, 2011 09:45 pm | Lee-Anne Goodman, The Canadian Press
President Barack Obama gestures while speaking about his plan for America's energy security, Wednesday, March 30, 2011, at Georgetown University in Washington. (AP Photo/Carolyn Kaster)

WASHINGTON - U.S. President Barack Obama called Wednesday for a one-third reduction in American oil imports by 2025, describing Canada as one of his country's energy partners as he tackled an issue that has dogged the United States since the 1970s.

"We cannot keep going from shock to trance on the issue of energy security, rushing to propose action when gas prices rise, then hitting the snooze button when they fall again," Obama said in a speech delivered as a cascade of uprisings in the Arab world wreak havoc on global energy prices and prices at the gas pumps.

"It is time to do what we can to secure our energy future .... We will keep on being a victim to shifts in the oil market until we finally get serious about a long-term policy for secure, affordable energy."

The president added he knows the U.S. will still need foreign oil, giving a nod to America's friends in the Western Hemisphere, including Canada.

"I set this goal knowing that imported oil will remain an important part of our energy portfolio for quite some time," he said.

"Obviously we've got to look at neighbours like Canada and Mexico who are stable and steady and reliable sources ... with whom we can share American technology and know-how."

One Canadian oil industry official called that remark encouraging.

"The very specific mention of Canada makes absolutely clear that the president views Canada as part of the solution and not part of the problem," said Tom Huffaker, the vice-president of policy and the environment for the Canadian Association of Petroleum Producers.

He added: "Even if the U.S. is largely successful in achieving its goals, we still believe there is still going to be a very good market for growing exports of Canadian oil to the United States."

Alberta Premier Ed Stelmach agreed, saying Obama's tip of the hat to Canada "makes me feel good."

"It's good news, of course, recognizing that Alberta is a very stable supplier if oil ... it has a huge proven oil reserve, and without the kind of investment that the Americans have been putting into countries in the Middle East."

Canada and Mexico are America's biggest suppliers of oil, providing almost 75 per cent of the energy source to the U.S. At a White House background briefing earlier this week, a senior official was asked to clarify what Obama's oil objectives meant to his North American neighbours.

"On the international side ... the goal is to secure access to reliable energy sources. And that means oil from a diversified set of countries," the official said.

Many Democrats concerned about climate change, however _ most notably congressman Henry Waxman of California _ have expressed serious misgivings about Alberta's oilsands. They've branded it "dirty oil" because mining the oilsands requires more energy than conventional oil operations, resulting in higher greenhouse gas emissions.

Environmental groups have warned that as the planet continues to heat up, it's foolhardy for the U.S. to continue being reliant on the world's most carbon-intensive fuel, even if it's coming from America's friendly neighbour to the north.

The State Department is currently deciding whether to approve TransCanada's Keystone XL pipeline (TSX:TRP), which will transport Alberta oilsands crude through the Midwest to Texas.

A decision on the pipeline isn't expected until the fall, but environmental groups and some Democrats have been urging Secretary of State Hillary Clinton to put the brakes on the pipeline, arguing vital aquifers in several agriculture-dependent states will be made vulnerable.

In his remarks at Georgetown University, Obama also emphasized the need for Americans to shift to cleaner fuel sources like natural gas and renewable biofuels.

Of nuclear power, currently at the centre of controversy again as tsunami-stricken Japan deals with an ongoing nuclear crisis, he said: "We can't simply take it off the table."

The president wants Americans to be using non-oil energy sources for 80 per cent of their electricity use by the year 2035. He stressed the need to tap "one critical, renewable resource ... American ingenuity."

"Meeting this new goal of cutting our oil dependence depends largely on two things: finding and producing more oil at home, and reducing our dependence on oil with cleaner alternative fuels and greater efficiency," he said.

Republicans, meantime, are eager to embrace Canadian oil. Obama's speech came on the eve of a hearing being held Thursday in the House of Representatives, now controlled by Republicans, entitled: "Rising Oil Prices and Dependence on Hostile Regimes: The Urgent Case for Canadian Oil."

Republicans have been assailing the Obama administration for months on energy, accusing officials of dawdling in issuing permits for new offshore drilling sites in the aftermath of last summer's devastating Gulf of Mexico oil spill and failing to lift a moratorium on new deep-water development quickly enough.

In his speech, Obama said his administration is expediting drilling permits for companies that meet safety standards and has recently given the green light to seven deep-water projects.

"Any claim that my administration is responsible for gas prices because we've 'shut down' oil production might make for a useful political sound bite, but it doesn't track with reality," he said.

Republicans were particularly irked, however, by Obama's remarks in Latin America last week that he wanted the U.S. to be a "major customer" for the mammoth new oil reserves Brazil recently discovered off its coast.

"The problem isn't that we need to look elsewhere for our energy," Mitch McConnell, Senate minority leader, said Wednesday.

"The problem is that Democrats don't want us to use the energy we have. It's enough to make you wonder whether anybody in the White House has driven by a gas station lately."

As has been the case since former president Richard Nixon grappled with the "energy crisis" that hogged headlines in the 1970s, OPEC _ the Organization of the Petroleum Exporting Countries, comprised mostly of Arab and North African nations _ is being largely blamed for the latest surge in gas prices.

The Financial Times reported earlier this week that OPEC stands to make a record-breaking US$1 trillion in export revenues this year if crude oil prices remain above $100 a barrel amid the unrest in the Arab world.


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