New approach to energy game

It started with the brown-eyed sheiks’ anger at the U.S. The blue-eyed sheiks retaliated and the battle for energy super-power status was on.

In 1959, America, led by then-president Dwight Eisenhower, imposed a quota on imports of oil and refined products from the Mideast and gave preferential treatment to Canadian and Mexican crudes.

Four Persian Gulf countries — Iran, Iraq, Kuwait and Saudi Arabia — and Venezuela sought revenge by forming the OPEC (Organization of Petroleum Exporting Countries). By 1973, eight other countries — Algeria, Ecuador, Gabon, Indonesia, Libya, Nigeria, Qatar and the United Arab Emirates — had joined.

Since then, the cartel has tried to set the global oil price by either restricting production to keep prices high or flooding the market to prevent non-OPEC countries from bringing expensive crude on-stream. Saudi Arabia is the acknowledged global energy superpower. It has the world’s largest conventional oil reserves and pumps about 9.5- million barrels a day.

In defence, a shadow cartel of mostly blue-eyed sheiks emerged. These countries — Canada, Russia, the U.K., Norway, Mexico, Kazakhstan and now China — produce about 60% of the world’s crude. While Canada and Russia are recognized as the leaders, only Russia has attained superpower status as the world’s largest natural gas producer/ exporter and second biggest oil producer.

Canada ranks first in uranium, third in natural gas, fifth in oil, seventh in electricity and 13th in coal. The oilsands reserves are the second largest in the world.

Despite Prime Minister Stephen Harper’s claim Canada is an energy superpower, this country has failed to elbow its way onto the international public policy stage. It neither commands market share and market power to set world price nor sets or unilaterally changes the rules of the international energy game.

Undaunted, the Canadian energy industry has decided to explore the green-eyed route into super-power territory. These entrepreneurs are dedicated to producing energy that is reliable, affordable and secure while addressing the world’s concerns about CO2.

According to a recent paper National Energy Security from an Exporter’s Perspective , there is a growing gap between public expectations (the not-in-my-back-yard syndrome) and energy realities.

“Canada’s ability to develop and deploy its resources faces a potentially fatal erosion of community support and without this support Canada will fast become a fading superpower long before it ever emerges as one,” the paper states.

“If Canada wants to become a clean energy superpower, it needs to tackle the massive gap between expectations of Kyoto-like emission reductions and the role of Canada as an energy producer and consumer.”

Canada has taken great strides and leads North America in reducing carbon emissions. Alberta was the first jurisdiction to monitor greenhouse gases, first to pass legislation to manage large industrial emitters, and first to see real results. It has the potential to become a world leader in low carbon equipment and expertise.

The Calgary Chamber of Commerce recognizes it is a formidable challenge to move from carbon intensive to carbon smart, yet it offers entrepreneurs a tremendous business opportunity to create the Silicon Valley of energy innovation.

Meanwhile, the United Arab Emirates is building the world’s first carbon-free city, Masdar, which will be powered by renewable energy and surrounded by wind and photovoltaic farms.

In 2009, will U.S. President Barack Obama’s war on carbon mean the green-eyed sheiks actually come up the middle and win the energy battle?

The title of energy superpower is at stake.