The Geopolitics of Alberta’s Tar Sands in an Age of Neoliberalism

Are the tar sands a source of Canada’s geopolitical power? Liberal Leader Michael Ignatieff thinks so – and he’s not alone (1). Industry and neoliberal politicians argue Canada has increased its geopolitical power because of Alberta’s tar sands. In the process, they have ingeniously tapped into a powerful form of patriotism – petro-patriotism. While extraction equals power and profit, the real power is not centred in Fort McMurray and the region –- for the most part, not even in Alberta. These spaces of extraction in northern Alberta are not spaces of empowerment for local peoples. To the contrary, power is centred in executive boardrooms of multinational corporations, generally lacking deep ties to communities and spaces of extraction. Although industry and petro-politicans speak of Alberta, and more generally, Canada, as holding key geopolitical power, the paltry royalties collected by government, the foreign investment, and deep North American integration have eliminated the possibility for any real geopolitical power. These issues merit an in-depth discussion, but the aim of this response is to briefly connect these three issues within the context of geopolitics in an age of neoliberalism.

Commentators, academics, activists, and some politicians warn of the diminishing control Canada has over its own energy resources, specifically in tar sands. Hugh McCullum of The Canadian Centre for Policy Alternatives characterizes Canada as an “energy satellite” of the United States, while others describe Canada as an “energy colony” (2,3). The provincial government has squandered an incredible opportunity to establish a rainy day fund to prepare for the inevitable post-petroleum future. For every $100 barrel of oil, Alberta only receives $26, while even Alaska receives $42 (4). Alberta makes less on its oil than Norway, Alaska, New Mexico or Louisiana (5). Oil companies are seeing huge profits. And yes, thousands are employed in northern Alberta, but the province nor the country are valuing this finite resource at a level consistent with the social and ecological costs associated with tar sands development.

The province’s inadequate royalty scheme has partly fuelled the incredible foreign investment. The Canadian Centre for Policy Alternative’s 2006 report, Fuelling Fortress America, noted that “American investment controls 40% to 50% of Alberta’s oil” (6). While the United States views the tar sands as an answer to its energy insecurity, China, too, is investing. In 2009, PetroChina announced its plans to buy a 60% stake in the privately-owned Athabasca Oil Sands Corporation. PetroChina now has a large stake in a company whose assets include five-billion barrels of bitumen (7). To put it bluntly, Alberta’s tar sands are up for sale, yet the provincial and federal governments have raised few concerns. Even more worrisome, many argue, is the division which no longer exists between industry and government. Both are quietly working towards deep North American energy and military integration.

North American economic union became clear through the creation of the North American Free Trade Agreement (NAFTA). Specifically in terms of energy, this agreement “guarantees an increasing export of a finite resource,” even though Canada has not reserved any energy for itself (8). NAFTA paved the way for the Security and Prosperity Partnership (SPP), which the Canadian Council of Chief Executives, the federal Conservative government, and the US federal government eagerly advocated, although Parliament never voted on it. The SPP allows for deeper military and energy integration. A “streamlined regulatory process,” deregulation of cross-border oil pipelines, and the privatization of energy industries are central to this backroom agreement, which has generated little attention in the mainstream press (9). The Civil Assistance Plan, signed by both countries, allows US and Canadian soldiers to enter either country to curb civil unrest or defend oil facilities (10). Recently US Senator Lindsey Graham said he did not believe Alberta crude to be “foreign” oil, appearing to suggest that Canada’s resources are merely an extension of the United States (11). Senator Graham is not alone in this view. Any geopolitical power Canada did have is rapidly disappearing.

We can no longer see today’s neoliberal politicians and oil corporations distinct from each other. We are witnessing the emergence of corporatist states, where sovereignty is increasingly irrelevant as decision-making is conducted with government and industry in the same room –- or government simply consisting of industry. Petro-politics and petro-politicians have ensured disproportionate returns for industry, while those in regions of extraction pay the environmental and social costs. Foreign investment and deep security and energy integration, advocated by industry, are further centralizing power in the hands of a small elite. Geopolitical power cannot exist when government forfeits total control of resource development to multinational corporations and fails to properly regulate. Is geopolitical power even relevant in this age of global corporate dominance?

Notes

1. Andrew Chung, “Ignatieff touts Alberta tar sands,” The Toronto Star, January 22, 2009, http://www.thestar.com/news/canada/article/575269.

2. Hugh McCullum, “Fuelling Fortress America: A Report on the Athabasca Tar Sands and US Demands for Canada’s Energy” (Ottawa: Canadian Centre for Policy Alternatives, 2006), 23.

3. Shannon Walsh and Macdonald Stainsby, “The Smell of Money,” in Sparking a Worldwide Energy Revolution, ed. Kolya Abramsky, 341 (Oakland: AK Press, 2010).

4. Andrew Nikiforuk, Tar Sands: Dirty Oil and the Future of a Continent (Vancouver: Greystone Books, 2008), 149.

5. Nikiforuk, Tar Sands, 140.

6. McCullum, “Fuelling Fortress America,” 23.

7. Nathan Vanderklippe, “PetroChina buys 60% stake in oil sands project,” The Globe and Mail, August 31, 2009, http://www.theglobeandmail.com/globe-investor/petrochina-buys-60-stake-in-oil-sands-project/article1270720/.

8. Walsh and Stainsby, “The Smell of Money,” 340.

9. Walsh and Stainsby, “The Smell of Money,” 341.

10. Nikiforuk, 164.

11. Jane Taber, “US Senator sold on the oil sands,” The Globe and Mail, September 17, 2010, http://www.theglobeandmail.com/news/politics/ottawa-notebook/us-senator-sold-on-the-oil-sands/article1712877/.