Tar Sands A Dirty Outcome Of Free Trade Failures

[Joe Shlabotnik]

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.

Still other NAFTA provisions can be used to force tar sands bitumen across the border. Articles within NAFTA’s chapter 11, often referred to as investor-state provisions, could potentially be used by TransCanada to push through Keystone XL, avoiding public debate and environmental regulation. Investor-state provisions allow corporations to bring lawsuits against governments if they perceive unfair treatment or loss of projected revenue. As of March 2013, over 100 cases have been brought about using NAFTA’s chapter 11. The threat of costly legal action deters governments from creating laws and regulations that promote regional development and public safety. In order to avoid chapter 11 lawsuits, governments are inclined to dismiss or ignore proposed laws favoring environmental and public protections if they can possibly be misconstrued as impediments to industry.

On July 16, 2013, the EU energy commissioner Gunther Oettinger addressed an audience at the Center for Strategic and International Studies in Washington D.C. Mr. Oettinger spoke of the EU’s declining energy production, its increasing energy import dependence, and the hope that through the Transatlantic Trade and Investment Partnership (TTIP) negotiations, a “trans-Atlantic energy trade” can be established between the U.S. and EU, noting the new energy wealth the U.S. has obtained through unconventional fossil fuel resources. From a social justice perspective, NAFTA presents us with a history of failure due to trade liberalization. It is quite clear that if the TTIP and the Trans Pacific Partnership (TPP) pass with articles similar to the proportionality clause and investor-state provisions, what little voice people and their communities have to control and limit unconventional energy extraction will be handed entirely over to industry, trade representatives and corporate-influenced trade tribunals.

From http://www.popularresistance.org/tar-sands-a-dirty-outcome-of-free-trade-failures/