December 15, 2011 | National Post

The New Canada-U.S. Love-In, Built on Iranian Nukes and Alberta Oil

At a dinner event hosted at the Canadian embassy in Washington last week, former U.S. national security advisor Robert “Bud” McFarlane was asked to explain why America has no “energy policy.”

In response, he paraphrased an answer that Gary Hart once had given to that very question: “Oh, you’re wrong about that. We do have an energy policy. We limit ourselves to one fuel. We buy it from a cartel. And every five years, we go to war to maintain that privilege. That’s the policy.”

The fuel, of course, is oil. The cartel is OPEC. And the last war, in Iraq, has cost the United States close to a trillion dollars. That’s a hard number to swallow in a country where the national debt has become a source of shame and political paralysis. It isn’t just peaceniks who are fretting about “war for oil” these days. It’s also hawks like McFarlane and former CIA director James Woolsey, who appeared alongside McFarlane at Thursday night’s panel.

“Did you know that when you go to the pump, you’re paying about $8 a gallon?” McFarlane told the crowd. “That’s because in addition to the cost of lifting the oil out of the ground, and getting it to the market, is the amount that you send to Washington for the defence budget — and their budget is devoted in very large measure to putting forces in the field, ships at sea, to protect the flow of oil around the world.”

For 40 years, every U.S. president has pledged to make America energy-independent. (“Let us set as our national goal, in the spirit of Apollo, with the determination of the Manhattan Project, that by the end of this decade we will have developed the potential to meet our own energy needs without depending on any foreign energy source,” is how Richard Nixon put it in 1973.) And each has failed. Yet four decades later, that eight-president-long streak may finally be coming to an end.

U.S. imports of crude oil and petroleum products peaked at about five billion barrels in 2005. Annual imports from OPEC nations peaked later in the decade at 2.2 billion barrels. According to Bill Colton, Exxon Mobil’s vice president of corporate strategic planning, that latter number “will decline to almost zero” by 2040. America will continue to import oil, but almost all of it will come from within NAFTA.

More broadly, the attitude toward energy policy in Washington is radically changed from what it was just a few years ago, largely thanks to three critical developments in technology and geopolitics: America’s indigenous shale-gas boom, the expansion of Canada’s oil sands and the rise of Iran as the pre-eminent threat to U.S. national security.

The Iranian nuclear threat, especially, has injected a note of urgency into the debate. Last week, I attended a three-day forum on Middle East policy, hosted by the Foundation for Defense of Democracies. The nominal title was “Ideology, power, and alliances in a changing Middle East.” But most of the congressmen and think-tankers who spoke at the Washington event were focused on just one country — Iran. And, in particular, its nuclear program.

The central frustration of Washington policy-makers, articulated throughout the conference, is this: Iran probably can’t be deterred without the West imposing more stringent sanctions on its oil industry and central bank, and, failing that, a credible prospect of a military strike. But both of these moves could cause oil prices to spike, thereby tipping the world, America included, into another massive recession.

Put another way: America’s dependence on OPEC oil has become a central impediment to stopping Iran’s nuclear program.

Here in Canada, we’ve seen plenty of images of American activists protesting against the Keystone XL pipeline. But behind the scenes, there is a growing realization among Washington elites that the oil sands inevitably will become a major component of American energy security.

In fact, at the FDD meeting, various presenters spoke of continental energy security — often in the same breath that they used to praise Canada’s strong stance in favour of Israel, and against Iran. For the first time since I began spending time in Washington, in the mid-1990s, I now often hear people speak of Canada and the United States as a sort of single strategic entity, united by a common energy grid, and by the war on terror and militant Islam.

Watching Canada from the vantage point of Washington, it’s clear that Stephen Harper’s policies on Israel, Iran, Kyoto and the oil sands aren’t really different policies at all, but rather different facets of a larger North American strategic play that includes this month’s “Beyond the Border” agreement between Ottawa and Washington.

It is telling, in fact, that the gala evening event at last week’s FDD conference was a Can-Am love-in hosted by Gary Doer at the Canadian embassy. Back in the Liberal era, such an event, populated as it was by American hawks, might have gotten bogged down over bickering about Iraq and missile defence. Instead, the evening was full of applause lines on both sides, especially when it came to the subject of Keystone XL.

“We don’t think it’s that complicated to have oil from Canada flow to the United States to replace oil from Venezuela [or] the Middle East — we actually don’t think this is a complicated decision,” ambassador Doer said. “It’s actually not just jobs versus the environment. It’s also the whole issue of whether the United States grabs this opportunity to establish energy independence in North America through oil from Canada.”

He’s right. Barack Obama may have ducked the decision on Keystone till after the 2012 election. But one way or another, our oil will continue to flow south, and the Canada-U.S. bond will continue to strengthen.

Jonathan Kay is Managing Editor for Comment at the National Post and a fellow at the Foundation for the Defense of Democracies.

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