Tar sands a dirty outcome of free trade failures

From Institute for Agriculture and Trade Policy:  http://www.iatp.org/blog/201309/tar-sands-a-dirty-outcome-of-free-trade-failures

by Patrick Tsai
September 3, 2013

As controversy over TransCanada’s Keystone XL pipeline has captured most of America’s attention, Minnesotans have been dealing with a different pipeline carrying tar sands bitumen to the United States. On July 17, 2013, the Minnesota Public Utilities Commission (PUC) granted Enbridge, L.P. a 120,000-barrel-per-day (bpd) capacity increase to line 67, the “Alberta Clipper”, from 450,000 bpd to 570,000 bpd.

This is the first of a two-phase capacity increase that Enbridge hopes will reach 880,000 bpd (50,000 bpd more than the projected 830,000 bpd capacity of Keystone XL). The application for Enbridge’s second-phase increase has garnered more attention and activism by Minnesota pipeline opponents, led by MN350. Comments submitted by MN350’s legal team to the PUC point out a number of contested facts found within Enbridge’s Phase 2 Certificate of Need. On September 4, the PUC will make a decision on whether a contested case hearing is necessary as a result of the disputed facts uncovered during the comment period. MN350 has asked the public to “pack the PUC to send the message that the contested case hearing is necessary.” There will also be an event on September 9 in Duluth organized by IEN, Sierra Club, Idle No More, MN ASAP and MN350 to resist the tar sands being transported through northern Minnesota. Contentious debate over tar sands mining and its exportation is not new to environmentalists and trade analysts alike.

Canadian crude has become a longstanding source of energy for the U.S. To keep the flow continuous and secure, the U.S. has strategically negotiated free trade agreements with an eye toward control of future Canadian energy supply and less toward sustained mutual benefit. The result is an agreement that drives energy exports from Canada, guaranteeing the U.S. a high percentage of Canadian oil and natural gas. Under NAFTA (article 605), Canada must maintain the previous three-year proportional average of energy exports of total energy supply (domestic production plus imports) to the United States. This means that if, for example, Canada has exported 50 percent of their total energy supply to the U.S. over the past three years, they must maintain energy exports to the U.S. at 50 percent or higher of their total supply, even if it means allocating more energy away from its own domestic need.

The proportionality clause is unique in that there is no similar clause in any other trade agreement, nor does NAFTA’s other signatory (Mexico) ascribe to it (page 26). Projections by the Parkland Institute show that even a 10-percent decrease in production would cause a domestic shortfall due to trade obligations, leaving Canadians the options of importing oil from other oil exporters or importing their own oil back from the U.S. Under the proportionality clause, reductions in production caused by natural disaster do not release Canada from these trade obligations. Sovereignty can only be described as absent in cases where Canada is unable to provide its own natural resources to its own people in need.

Continue reading at:  http://www.iatp.org/blog/201309/tar-sands-a-dirty-outcome-of-free-trade-failures

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