Energy security and transportation

Access to cheap, abundant supplies of energy has been central to the development of modern, western societies. Canada, with its vast energy resources, from hydroelectricity to coal to natural gas, is an example of such a society. In fact, some of these resources are considered to be so abundant that Canada readily exports them. For example, in 2003, Canada exported about 46 percent of its petroleum production to the United States.

What may come as a surprise is that although Canada is a net-exporter of petroleum products, it still imports petroleum from overseas markets; in 2003, about 27 percent of Canada.s petroleum was imported. The reason why Canada (or any other country for that matter) imports oil is quite simple: the demand and the supply are in different locations. For example, since Nova Scotia is not connected to the pipeline bringing western Canadian oil to Ontario, Nova Scotia gets most of its oil from the North Sea and Venezuela (a small amount comes from Hibernia).

The government of any country or region that relies on imports to meet its energy requirements must sooner or later address the issue of energy security. In its simplest form, energy security refers to the policies adopted by a government to ensure that society can meet its energy needs. When such policies exist, they usually deal with energy supply rather than energy demand.

Energy security in the United States is implemented in a variety of ways: increased national supply (as in the proposed drilling of the Arctic National Wildlife Reserve), locking its neighbours into international agreements (Canada and Mexico both supply the U.S. with oil), and militarily (U.S. Navy ships patrol the Persian Gulf and some suggest that the invasion of Iraq was about oil). On the other hand, China, the world's second largest consumer of oil, is increasing its national oil output, leasing all available tankers in the Pacific, and looking for long-term overseas sources (it has offered to buy a stake in Alberta's tar sands).

Ideally, national actions such as those described above would not be necessary and the market would be allowed to follow its own course. However, the fact that worldwide demand for oil is growing at a rate faster than it is being discovered means that the price of oil will inevitably become an energy security issue.

Of course, the price of oil already is an energy security issue in most of Atlantic Canada. For example, last summer the Nova Scotia government held hearings on the price of gasoline and home heating fuel, in reaction to gasoline prices reaching, and in some cases exceeding, $1.00 a litre. More recently, the Nova Scotia government announced a $200 rebate programme for low-income earners to help defray the cost of home heating in the winter. Over the long-term, neither the hearings nor the rebates will offer Nova Scotians any form of energy security; achieving energy security will require a variety of policies, including ones that reduce oil consumption.

This is easier said than done, especially when it comes to transportation. The following table shows Statistics Canada data for the population growth and gasoline consumption of the four Atlantic Provinces between 1990 and 2003; in all cases, consumption exceeds population growth.

Province Change in
Change in
New Brunswick+1.4%+9.3%
Newfoundland and Labrador-10.1%-0.4%
Nova Scotia+2.9%+6.4%
Prince Edward Island+5.5%+17.9%

Since the provincial governments in Atlantic Canada are in no position to influence the supply-side of world oil markets, it will be necessary for them to develop policies that address the issue of demand in their local transportation sectors. In Nova Scotia, the 2001 Energy Strategy discussed the need for energy efficiency in transportation, admitting that provincial highway construction "is costly and increases vehicular traffic in the urban areas, with attendant increased fuel use, air emissions, congestion, and inefficient energy use by commuters", while at the same time the provincial Department of Transportation and Public Works embarked upon a ten-year $3.4 billion road improvement scheme.

To achieve complete energy security in the transportation sector will require a major technological development that breaks transportation.s reliance on oil. Since this is unlikely in the foreseeable future, governments must introduce policies that encourage a shift from private to public transportation.

Published: Atlantic Construction and Transportation Journal. February 2005