is this why the pipeline was planned by Canada

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par_putt
Posts: 565
Joined: Tue Apr 27, 2010 11:51 am

is this why the pipeline was planned by Canada

Post by par_putt »

The "proportionality clause" in NAFTA was the key item that the US got in first free trade agreement: energy security provided by guaranteed Canadian oil. If Trump wants to reopen NAFTA, go for it ... many in Canada are waiting.

The free trade agreement also wiped out Canada's manufacturing - what happened to the States during the last decade happened in Canada in the late 80's and early 90's. Many feel that Canada got the short end of the stick.
James


Here is a quick overview of the Proportionality clause in NAFTA.

plea.org: - ... the "proportionality clause" states that Canada is obligated to make a certain proportion of the total supply of certain goods, for example, oil and gas, available for sale to the United States. The proportionality clause means that under NAFTA, Canada would have to provide oil and gas to the United States even if Canada is unable to meet its own energy requirements. ... Canada agreed to the proportionality clause to ensure that there would be a constant market for our oil and gas. The agreement was signed at a time when there was no real perceived threat to the limited availability of such resources.

This provision dictates that Canada cannot institute policies that would encourage conservation of petroleum supplies for future generations of Canadians. It also affects the ability of Canada to reduce greenhouse gas emissions because a certain level of production must be maintained to meet our needs and the proportion that must be made available to the United States. Furthermore, the ability to divert oil products to the eastern provinces from the western oil patch is affected. At present, the eastern provinces rely on oil imported largely from OPEC companies.
dan_s
Posts: 34648
Joined: Fri Apr 23, 2010 8:22 am

Re: is this why the pipeline was planned by Canada

Post by dan_s »

I spoke at the JLL Conference in Calgary on October 3. The room was packed. Attendees seemed worried about a President Trump. I told them that I thought he would be much better for Canada than Hillary would be because of his focus on stimulating the U.S. economy, which it turn should help Canada.

I have only been to Canada a few times, but they seem very liberal. Much more than I'd expect from people in Calgary, where the economy is heavily dependent on the energy industry. Calgary based companies do a lot of business in Houston.
Dan Steffens
Energy Prospectus Group
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