Risks to Canada's Energy Security
According to the first International Index of Energy Security Risk, Canada ranks well in the world, primarily because of its huge resource base and energy self-sufficiency. In fact, Canada's energy security ranking is the 8th best among the world's top 25 energy users, just below that of the United States, though Canada's ranking dropped from 2009, when it ranked 7th in energy security. The main risk to Canada's energy security, as seen in the Index, is the need for high levels of domestic energy consumption, comparatively low levels of energy efficiency, and a lack of access to diverse markets, particularly in the face of increased US production of oil and natural gas, and ongoing opposition to the Keystone XL oil pipeline.
The development of Canada's oil sands coupled with US unconventional oil and gas production is shifting the world's energy center of gravity from the Middle East to North America. The impact of these trends is rippling through world markets. It has, for example, caused the Mexicans who are seeing their oil output drop to rethink the wisdom of their constitutional prohibition of foreign investment in the oil industry, and it is leading OPEC to worry that its sway over the world oil market is weakening. These and other trends potentially beneficial for Canada, however, are contingent on the ability to move energy to markets. The Keystone XL Pipeline is a critical piece of that.
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