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Canada prohibited from cutting gas and oil exports to the U.S. - even if we experience shortages

EDMONTON—Despite the fact that we are running out of natural gas, and that we import 49% of the oil we consume, NAFTA dictates that Canada's government cannot reduce the percentage of oil and gas we now export to the United States even in times of domestic shortages. A new report released today by the University of Alberta's Parkland Institute and the Canadian Centre for Policy Alternatives (CCPA) says that the only solution to this and other potential scenarios is for Canada to pull out of NAFTA's 'proportionality' clause.

Over a Barrel: Exiting from NAFTA's Proportionality Clause provides a brief history of the proportionality clause in NAFTA, and highlights Canada's energy insecurity resulting from diminished conventional oil and gas reserves, our need to import 49% of the oil we consume, and the fact that we export two thirds of our oil and 60% of our gas to the U.S.. The authors examine three scenarios in which the U.S. could invoke NAFTA to limit the ability of Canadians to set our own energy policy.

"We looked at whether Canada could reduce exports for the sake of conservation or environmental policy, or whether we could prioritize our dwindling natural gas reserves for domestic value-added production, or even for household heating. We cannot. We cannot even guarantee eastern Canadians access to western crude," says John Dillon, economic justice researcher at KAIROS and co-author of the report.

"Barack Obama and Hillary Clinton have put NAFTA back on the table with their musings about re-negotiating or ripping up the agreement," says co-author Gordon Laxer, a political economist at the University of Alberta. "The Canadian government must realize it is the only country in the world that has jeopardized the energy needs of its people in this way, and move quickly to exit the proportionality provisions of NAFTA."

The research also draws attention to the fact that even Alberta only has 8 years of established natural gas reserves remaining in direct violation of its own legislation requiring a minimum 15 years of proven supply before any can be removed from the province. The report calls on the Alberta government to uphold its own policy.

The report concludes with a strong call to action by the federal government: when an energy supply crisis hits and Canadians are trying to cope under difficult conditions, the outcry for Canada to get out of the NAFTA clause will be deafening. Instead of waiting for such a crisis and such an outcry, the time to act is now.

This study is part of the ongoing work being done by Parkland, CCPA, KAIROS, and other organizations to develop a Canadian energy security strategy, which will meet the environmental, economic and energy needs of Canadians over the long term.

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