CALGARY — Building export pipelines will greatly improve Canada’s energy security risk rating and ease the risk to its trading partners as well, concludes a new study from the U.S. Chamber of Commerce.
The study released Monday morning shows that Mexico, with high energy production and low domestic demand, plus few export barriers, had the lowest energy security risk in the top 25 high energy-consuming nations of the world in the 1980-2010 period.
The list places the United Kingdom second, Norway third, New Zealand fourth, Denmark fifth, Australia sixth and the United States seventh.
Canada is eighth, just slightly behind the average score of developed OECD (Organization of Economic Co-operation and Development) countries and a little better than Germany, Indonesia and France.
“On balance, Canada’s energy security is about average, but it has tremendous potential to improve its own security,” the study says, adding efficient development of oilsands is key.
“Much will depend, however, on market conditions and the development of necessary infrastructure to bring this oil to international markets, including pipeline infrastructure to move this oil from Alberta to U.S. markets via the Keystone XL pipeline and to Asian markets via the Northern Gateway pipeline to Canada’s West Coast.”
Both proposed pipelines have attracted fierce opposition.
The international ranking uses 28 measures of energy security, including fossil fuel imports, energy expenditures, efficiency, transportation, power generation and carbon dioxide emissions and applies them to the 25 nations that consume 80 per cent of global energy.
“Countries that do well in our index tend to have a large homegrown resource base, a diverse power sector and improving efficiency,” said Steve Eule, a vice-president at the U.S. Chamber’s Energy Institute, in a news release.
“As a whole, we’ve seen the risk scores for most of the large energy users worsen over the past decade after a long period of improvement, which is cause for concern. Emerging economies, in particular, are experiencing rapidly rising energy security risks.”
Canada has been a little above or a little below average throughout the 30-year study period.
It notes Canada is a large energy producer and exporter but it loses points for its energy use per capita, “the highest of any country in the large energy user group,” which also contributes to its high carbon dioxide emissions per capita.
“Greater energy efficiency could improve all of these metrics,” the study notes.
Canada is decidedly above OECD average when it comes to electricity because 60 per cent of its power is hydroelectric, adds the study.
Canada’s largest energy export market, the United States, has consistently been slightly above OECD averages, the study notes.
U.S. gains have been made in increased domestic energy production, particularly in light oil from the Bakken shale formation in North Dakota and natural gas from the Barnett and Marcellus shale formations in Texas and Pennsylvania, and due to lower energy costs.
It notes that greater access to U.S. federal lands and deep water resources could further lower future U.S. oil import risks substantially.
The country with the worst energy supply risk is Ukraine, a status that has existed for 30 years although it is gradually improving. The country is a net importer of oil, natural gas and coal and scores poorly on energy expenditures and energy use intensity.
The United Kingdom has been in the top three spots over the 30-year duration and is considered the most energy secure country in Europe.
Its advantage is shrinking as net imports of oil and gas increase, although that could be reversed if new offshore oil and gas fields in the North Sea pan out as hoped.
The most dynamic scores have been posted by China, the study shows. It bounced from very poor scores in the 1980s to just below OECD average in 1999.
However, over the past decade many of those gains were erased because domestic energy production has not been able to keep pace with demand, leading to increased reliance on imports.