AFTER GORGING ON OUR OIL AND GAS- U.S. Is Now Determined to Control Canada's Electric Power (Why Canada Needs a National Energy Plan)

Article excerpt

Canadians who care about the effects of U.S. imperialism tend to associate it with the adamant positions the U.S. takes on trade deals and its aggressive measures related to security. The drama of these events-particularly the war in Iraq, the softwood lumber and beef disputes, border issues, and U.S. surveillance of Canadians-overshadows the less visible but equally insidious acts of U.S. imperialism.

I refer here to the regulatory changes that the U.S. makes, by fiat, on matters like energy that affect Canadian economic security. These involve actions that are leading to a deep and permanent integration with the United States - to a form of continentalism with the U.S. firmly in control.

Canadians did not pay much attention to the U.S. Energy Policy Act that was passed last summer-aside, that is, from the warnings of environmentalists that the Act would likely intensify North American environmental destruction. I suspect the decision to ignore it by Canadian media and politicians is because the U.S. point of view already firmly dominates the oil and gas sectors in Canada. And the federal government is anxious not to say or do anything that might give the impression it was contemplating another National Energy Policy. By adopting a head-in-the-sand approach to energy, however, Canada imperils its energy security for the future, particularly for one area of energy that is still mostly in public hands in Canada: electricity. But both the generation and sale of electricity in Canada are increasingly and rapidly coming under U.S. control.

Official U.S. policy is designed to create an integrated, competitive, privatized "North American" electricity market run by American rules and American players. The prevailing Canadian system is based on public utilities which engage in long-term planning to ensure sufficient supply of electricity and adequate transmission and distribution. The Americans plan to transform it into a competitive market-based model that will rely on the vagaries of the market to determine how much is produced and who gets it.

In Canada, the response of governments to U.S. dictates has been surprisingly limp: rather than challenging U.S. regulatory imperialism-as, ironically, many U.S. states and state public utilities are doing-Canadian governments at both the national and provincial levels are readily acquiescing to U.S. demands. All of this is occurring with virtually no public debate, government analysis, or media scrutiny.

The U.S. plans for electricity restructuring assume that competition will bring about abundant supplies and lower prices. In the face of the rather monumental restructuring failures that have actually occurred in the U.S., this approach seems more faith-based than reason would allow. The weird reluctance to face up to the problems of restructuring-inadequate supplies, transmission congestion, price escalation, and more government subsidies of private electricity development just to get more generation built-can only be accounted for by a government that is firmly in the control of the private energy companies, or one that follows a blind adherence to the myth that the market is always efficient-even when it clearly isn't. (Of course, there is always the possibility that both these factors are in play.)

One of the major problems for Canada is that our own energy regulatory body, the National Energy Board (NEB), is extremely weak, at least relative to the enormous powers of its U.S. counterpart, the Federal Energy Regulatory Commission (FERC). And it is through FERC that the U.S. is implementing its plans. The new U.S. Energy Policy Act ratcheted up FERC's powers considerably. According to FERC's chairman, Joseph Kelliher, these new powers constitute "the most important change in federal electricity and gas laws since the 1930s."

FERC has become decidedly imperialistic since George W. Bush came to power. The main drive is to pave the way for a "seamless" continent-wide marketplace for electricity through what it calls a Standard Market Design (SMD). …