First Thing You Know, Old Jed's a Millionaire . . .

As I understand it, approximately 70% of the oil consumed in Canada is used to fuel the country’s transportation needs and, the majority of that 70%, facilitates transportation east of the Great Lakes and west of the Rocky Mountains. Presently, the pipeline infrastructure supplying the West Coast, Eastern Canada and the Maritimes is either lacking in some respect or non-existent. If one looks at domestic production and consumption statistics only, it certainly appears that Canada could theoretically meet its own demands for oil and gas. However, the true cost in dollars, for nation-wide distribution of domestic oil through a network of yet-to-be-built pipelines, fleets of tanker trucks plus the resultant highway maintenance, or for upgrading rail service, would be so astronomical, that the true north, once strong and free, would be taxed into a pandemonium of poverty in efforts to support such a venture, considering Canada’s present system of outdated infrastructure.

Without the intention to pun, this combustion of taxpayer dollars might further be fueled by the need to rebuild or retrofit the existing light crude refineries in the Maritimes, thus enabling the processing of heavy Tar-Sands oil coming out of Western Canada, and consequently adding many more billions of taxpayer dollars to the cost of using Canadian oil for all of Canada. Even if there were sufficient pipe lines to whisk western oil away to some other Canadian province like New Brunswick and, the updated refineries were waiting at the other end, lighter oil and gas may still need be imported to some extent, for use in diluting the heavy viscous Tar-Sand oil into fluid pipeline-ready oil. One of the main reasons why Canada imports oil, and why it is imported almost exclusively into eastern ports and the Maritimes and through ports in Vancouver and Prince Rupert, is to replace the domestic oil that cannot be transported realistically or affordably from Western Canada to meet the needs of those segments of the country. Ninety percent of the foreign oil being carried on oil freighters destined for entry into the St. Lawrence or Maritimes ports will likely not get any further than urban Ontario, Quebec and the Maritimes. That oil will NOT likely be trucked across the country as some might mistakenly choose to think. It is much less financially burdensome to get foreign oil to the outer coastal regions of Canada through importation, than it is to somehow transport domestic oil from the prairies by pipeline, truck or rail to those same locations. Tax-payers in Canada cannot afford the cost of shipping domestic oil to all parts of Canada. Suffice it to say again, that we import foreign oil, so that the "No Vacancy" signs on the country's 'poorhouses' aren't continually flashing red.

Canada is a major world exporter of oil. Canada has the third largest oil reserves on the planet. It is understandably difficult for some Canadian voters to comprehend why a country with that much oil would have to buy oil from somewhere else. To illustrate why it may be smarter and less costly to buy foreign oil than to distribute domestic oil, consider the following example.

Let’s say that I decide to take my family on a vacation to Thailand. We pack our bags and get ready to go. The next day we get on the plane. We fly to Bangkok and we disembark and go to our hotel only to find that we have forgotten to bring our suitcases with us – they are still at home on the bed. We now have a decision to make. Option #1 – At great expense, and risk of family dissolution, we could fly back to Canada and collect them ourselves, bring them back this time and continue our now-shortened winter holiday. Or – Option #2 – We could spend a few hours each day, over the next several days, (and keeping in mind, time-zone differences), on the phone with our cousins or perhaps our neighbours next door, and inconvenience the hell out of them by having them retrieve our luggage for us, take it to the airport, and check it in on another flight to be shipped to us. After the several days needed to accomplish those tasks, we could ultimately take another hour-long taxi-ride from the center of the City to Suvarnabhumi Airport to pick up our bags, assuming all the while, that they weren’t already lost by that time, travelling around the world willy-nilly, on several different carriers without any real people to look after them. Finally, we could then shell out a few hundred extra dollars to various agencies and individuals to take the last step in . . . having our luggage handed over to us. There would have to be some really important items in those suitcases, let me tell you, to justify spending all that time, effort and money to retrieve them. Realistically, there are much more proximal, less exhaustive and more economical methods of simply replacing (not returning) the items that were in the bags. For example – Option #3 – We could take a leisurely stroll down the street to the 'Terminal 21 mall' and purchase nearly the same items that were lying on the bed at home – an action that would, no doubt, save us a lot of valuable vacation days, trouble, and the family fortune to boot. If we were still really worried about the extra (wasted) money we had to spend to purchase new clothing and toiletries, we might choose to recuperate those funds, online or at a garage sale next spring, by selling our old clothes and personal items, still in the suitcases, when we finally got back home. It’s a no-brainer then – of course we would choose the last option.

Why then, do Canadians think it so implausible for the Federal Government to import foreign oil, which, let me reiterate, is used mostly in the coastal areas of the country, far, far away from the nation’s domestic oil reserves? When most individuals deal directly with personal problems, they will almost always choose the least troublesome, least time-consuming and least expensive option. However, when those same people look at a situation that is not immediately theirs – that they don’t really own, and / or which they know very little about, choosing the easiest and least expensive solution is often clouded by distractors like, pride, nationalism, political bias, self-righteousness, presumed self-importance and intelligence and so on. Importing foreign oil for use by Canadians in Canada then, in place of using Canadian oil to satisfy the needs of Canadians in Canada, does not sit well with those Canadians who are either proud nationalists (at any cost), haters of the Prime-minister and/or the political party making the decisions, self-proclaimed do-gooders, or simply oblivious to the economic benefits of such an action. Using my illustration above, in comparison to the oil situation, importing foreign oil for use in the extremities of the country, is like purchasing new clothing and personal items in Bangkok. Transporting domestic oil, at great cost I might add, to those same extreme regions of Canada would be comparable to either flying back from Bangkok to Toronto to pick up the bags, or going through the great inconvenience of having the bags shipped from Toronto to Thailand. Solutions to problems usually fall into one of two categories – they either make sense or they are just really dumb!

Anyway, Canada is also an importer of oil and has been for a long time - even long before Justin Trudeau was still being carried about under his father’s arm. In fact, Canada imported more oil in 2006 alone than in any year since 2015, when Justin Trudeau became the prime-minister. I don’t know that it serves a purpose to ridicule Justin Trudeau, or any other Prime-minister for that matter, for the policy and act of importing foreign oil. The whole idea has been around for quite a while and, I would think that it will continue to be a part of Canadian Federal Policy for some time to come – or at least until the day when the country finally makes an effort to build and / or expand distribution pipe-lines, or refurbish refineries, or when it prioritizes the reduction of the number of cars out there on the road or, when it shrinks its boundaries to become the size of Luxembourg.

If one takes the time to look objectively at how the flow of oil in Canada works, one will note that oil is produced primarily in one sparsely-populated part of the country and consumed, for the most part, in a different, distant, more-densely populated and urban part of the country. Any policy that says, “The oil produced and the oil consumed has to be the same oil”, is a slightly contrived, and archaic, pre-twenty-first-century notion, likely concocted by small-minded, backward-thinking politicians and voters. Instead of being shackled to the limited concept of Domestic oil – for Canada, Canadians need to entertain the global, twenty-first-century idea of Domestic oil – for foreign money – for exchange into domestic money – for domestic research and development – for domestic resources and processing of goods and services – for more foreign money – for exchange into more domestic money – for foreign oil – for Canada. Any good ecologist, worth his salt, knows that the more intermediary steps that are included in a food web or ecosystem, the more stable the system. In the one-step system shown above – Domestic oil – for Canada, any problem arising in either end of the step would collapse the system. Employment in this model would be dependent upon only two segments of the economy and is therefore limited to the skills needed to keep only those two-steps afloat. If world oil-prices go south, the foundation of that system collapses and . . . whole communities suddenly become ghost towns. The second system will actually endure ‘down-periods’ because it is diverse and there are other steps that stay active for long enough to help the system survive until the foundation can be reconstructed. Canada will grow into a strong economic nation if we continue to diversify our management of resources on a world market, not simply a domestic one. Now, in the twenty-first century, and more than ever, the statement, “No country is an (economic) island” rings true for every nation on the planet. All nations are connected by natural planetary systems and man-made economic networks, whether we like it or not. Canada needs to include as many diverse steps as possible in its economy in order to bolster its position in world markets. Attitudes of nationalism are quickly becoming fuel for collapse, and need to become dispensable artifacts of past civilizations. In short, Canada gets a sizeable bang for its buck by selling 85% of its domestic oil, then “laundering” the proceeds in several steps domestically to grow the money, so that foreign oil can be purchased for use in parts of Canada to which domestic oil cannot be shipped without ‘selling the farm’, so to speak.

As long as we imagine Canada to be some big 'independent' parcel of land slapped onto the side of the globe at the front of the classroom, and with no connection to the rest of the world, we are doomed to an existence of “backwardism”. I know this doesn't carry any merit for those who have trouble understanding how the world works, but it really does make sense economically. In fact, all of us really do benefit from this exercise in good business. The twentieth-century view of the world was a selfishly nationalistic view. Some people in Canada are still living in the twentieth century and therefore, still maintain, for better or for worse, that same old world view. The twenty-first-century world view however, is a global view of things. It has become, whether we like to admit it or not, more beneficial to Canadian citizens. It has become more profitable to look at Canada as a part of the world, the bigger picture, than it is to look at Canada as being separate from the rest of the world. Citizens of Canada need to recognize that giving Canada a stronger position in the world is actually giving them, as individual people, stronger positions in their own country as a by-product.

One only needs to take a look at a map of Canada, and in particular at the map-scale legend in the bottom corner, to realize how huge and geographically diverse the country is. It won't take one long to pick up on the fact that the distance from the Tar Sands of Alberta to Uncle Joe's car in Fredericton, NB, is actually thousands of kilometers. The oil in Alberta cannot just magically appear in the Maritimes simply because we think it or say it really fast. It would have to be physically transported there somehow - probably on the same highways that you and I travel on to work or for summer vacations. The whole issue about using Canadian oil in every part of Canada becomes a little less clear-cut when we imagine driving on a highway between Winnipeg and Thunder Bay and twenty-nine out of every thirty vehicles on the road are oil tanker semi-trailer trucks, which are weighing heavily on the already-crumbling pavement, all in efforts to get Canadian Oil out there to all of Canada.

To illustrate further, let's take a look at some of the numbers. The average annual volume of foreign crude oil imported by Canada over the last six years runs at about 250 million barrels with an estimated value of $15 billion per year. Last year's below-average total (2020) was actually $11.2 billion in foreign oil imported. As a side note, this is somewhere between 1/7 and 1/8 the volume of crude that Canada actually produces domestically each year. Ninety-eight per cent of the oil produced in Canada comes from Oil Sands operations and that is not easy oil to deal with. Since Canada produces 4.5 million barrels of oil per day and then exports 3.8 million barrels per day and we consume 1.5 million barrels per day – we are left with a shortfall of about 800 thousand barrels per day, so we need to import to satisfy our needs. The import volume last year was only 555 thousand barrels / day, so we were still 245 thousand barrels / day short. To pick up that slack, if central Canada (from the Rockies to the Great Lakes) needed the oil, it was further supplied most cheaply by using domestic oil. If eastern Canada, Maritimes and Coastal BC needed the oil, it was further supplied most economically by importing foreign oil. A flexible import policy is an intelligent choice. Canada makes more money selling 85% of its oil and importing the rest of what is needed, than it would by selling less and then using domestic oil to meet the rest of the at-home demands. To use domestic oil to meet the needs of, and be transported to, the most-populated and greatest oil-consumption areas of Canada (coastal BC, Urban Ontario & Quebec and the Maritimes) the start-up distribution price-tag for highway building & maintenance, truck fleets, rail service, pipelines and extra refineries would be over $200 billion at the absolute barest minimum. Ultimately, if Canada decided to follow that path, taxpayers would either go broke or be forced to forgo new programs and / or relinquish already-existing relative non-essentials like MRIs, teachers, nurses, roads and new cancer facilities, etc. Using domestic oil for ALL of Canada sounds good when you say it fast, but there are so many hidden problems and costs with doing that, that we might not be as thrilled with the outcome as we had initially imagined.

Canada has been importing oil since before the current Prime-minister was even born. That means that, over the years, a lot of (knowledgeable) Canadian politicians from all political parties, have reckoned it to be the most economically intelligent thing to do. Finally, there are other countries out there (i.e. USA) that would be a little more than pissed off if we cut back on our oil exports to them, so that we could keep more for ourselves. If you can imagine having a Bengal tiger as a pet and then further imagine cutting back on his daily food rations so that you could enhance your own diet, you might be able to picture the new risks involved for you, the caretaker, come enclosure-cleaning week. There is no good time to get into a world trade war with anyone, especially a tiger, like America.

Until we agree to spend gazillions of our tax dollars to build suitable pipelines to all the oil-using parts of Canada and then agree to spend even more $$$$$ on refineries that can actually process the oil we produce in Canada and, until we get rid of a lot of extra cars and trucks and planes, exporting oil on one end of the country and importing oil on the other end actually makes the most economic sense. Not using "Canadian" oil in Canada doesn't mean that our Canadian oil industry is going in the tank. We can still keep producing it and we can still keep using it in the parts of Canada where it makes sense to use it and, most significantly, we can still keep selling it conveniently to the United States at world prices. It's not like our "Canadian" oil is just sitting around and going to waste or that Canadian oil workers are losing jobs because Canada isn't using it’s own oil. Likewise, we can use the money we make from selling "Canadian" oil to America, to turn around and buy oil from Kuwait or Venezuela to be used in the parts of Canada where the cost of using Canadian oil would be totally prohibitive. We are actually saving money by purchasing and using foreign oil – savings that are then passed on to tax-paying Canadians who now don’t have to support a makes-no-sense system of transporting domestic oil around a country the size of Canada. At the risk of giving up valuable global-market diversity, if Canada were the same size as Venezuela or even Alberta, it might then, possibly make more sense for us to use our own oil, sell the rest and never have to import oil from anywhere else. However, Canada has to deal with a lot more issues surrounding oil distribution than the average country does. Canada is big. It is not entirely flat – only in the middle where the oil is. In addition, its oil is not as easily transported or processed and refined as much of the oil found in other parts of the world, thus further complicating the distribution of domestic oil within our nation’s boundaries.

Regarding the management of oil imports and exports and oil distribution in Canada, things may not be perfect, but we’re working on them and I think we are doing pretty well, considering the local geographic and global challenges we face to get oil out of the ground, refine it, market it, distribute it and use it. We also live in a country where we at least get the chance to discuss the issue and vote for the people who ultimately make the decisions. If we don’t like the way the elections turn out, we can vote differently the next time or, we have the privilege to lobby for election reform, or even throw our hat into the ring and run for office ourselves. That’s the part of the world we live in. We’re pretty lucky I guess.

In the future, we will just all have to learn to choose the programs we wish to support and, about which devils we actually complain. If we complain that pipelines are being built across the country, then we can't complain about importing oil and vice versa and we can’t complain about the price of gas for our car. If we complain about the present prime-minister importing oil then we also have to complain about all the other prime-ministers that did the same thing and we will certainly have to complain in the future when all the future prime-ministers continue to import foreign oil. And, if we have more than one car sitting out on our driveway, then we can't complain about anything at all, related to oil production and oil imports, pipelines and refineries - No, if that is the case, we'll just have to go back to complaining about the weather and the Maple Leafs, and we all know how much good that will do us – don’t we?