Canada's Use of Sanctions Against Russia to Push for Further Integration into U.S. War Economy

– Fernand Deschamps –

Canada's ruling circles are using the events in Ukraine, the war hysteria against Russia, and specifically the energy sanctions imposed on Russia to call for further integration of Canada's energy sector into the U.S. war economy. Several examples during the week of March 21-25 show how the energy issue is being used for the purpose of integrating Canada even more into the U.S. war machine.

On March 24, the International Energy Agency (IEA) started its two-day ministerial summit meeting in Paris, France, by issuing a Member statement which repeated the U.S./NATO narrative justifying its illegal sanctions against Russia in an attempt to isolate and crush it.

"Russia's invasion threatens global energy security and democratic principles. Russia's actions, including its use of energy as a weapon, threatens the rules-based international order that has prevailed since the end of the Second World War. Energy should never be used as a means of political coercion or to threaten national security."

IEA Executive Director Fatih Birol said all member countries came to the organization's summit armed with plans, policies and various other tools to reduce reliance on Russian oil and gas. "They were different policies, different measures, different timelines, but one single target -- reducing, radically, Russian oil and gas imports," Birol said.

IEA is presently made up of 31 member states. It was set up in 1973-74 by member states of the Organization for Economic Co-operation and Development (OECD) that were dependent on oil imports -- such as the United States, Japan, European nations and Canada -- to counter the influence of the Organization of the Petroleum Exporting Countries (OPEC). OPEC nations had cut their exports drastically in opposition to the 1973 U.S.-sponsored Israeli aggression against neighbouring Arab countries, such as Egypt, Syria, Jordan and Lebanon.

It is the countries linked to the IEA that use energy as a weapon. After meeting with his global counterparts in Paris during the same week as the IEA meeting took place, Canada's Natural Resources Minister Jonathan Wilkinson pledged to pump out more oil and gas "to alleviate Europe's energy crisis."

"We have our European allies who are facing the prospect of not being able to heat their homes or fill up their trucks to actually service their grocery stores and their restaurants. It would be incredibly irresponsible for Canada to say 'we don't care,'" Wilkinson told reporters.

On March 24, he announced that Canada's industry is expected to increase oil production by 200,000 barrels per day, and the equivalent of 100,000 barrels of natural gas per day, by the end of the year.

Currently, Canada produces about 4.7 million barrels per day (bpd) of oil, and exports about four million bpd, 99 per cent of which goes to the United States. More than three-quarters of Canada’s crude oil exports to the U.S. go to the Midwest refineries and the refineries and ports on the Gulf Coast, mainly by pipeline but also by rail. Oil is also exported through the Trans Mountain pipeline, with the majority going by pipeline to refineries in Washington State, and through the railways leading to Irving's oil refinery and East Coast port facility located in St. John, New Brunswick.

Following a G7 summit in Brussels on March 23, Prime Minister Justin Trudeau said in a joint statement with European Commission President Ursula von der Leyen that officials would be meeting that same week to discuss enhancing energy-related co-operation and eliminating the European bloc's dependence on Russian energy.

"A dedicated working group on green transition and LNG [liquid natural gas] is being created to develop a concrete action plan on these matters," the statement read.

Last year, Russia exported about 4.6 million barrels per day of crude oil, according to energy consultancy group Wood Mackenzie. It claims those exports have fallen because of the widespread economic and energy-focused sanctions against the country.

A practical roadmap for achieving independence from Russian fuels has been the subject of "intense back-and-forth" in recent weeks, U.S. National Security Advisor Jake Sullivan told reporters during the same week the IEA summit was being held.

Narrow Private Interests Leading the Fray

The same day IEA concluded its 2-day summit, Victor Dodig, Chief Executive Officer of the Canadian Imperial Bank of Commerce and the new Chair of the Business Council of Canada (BCC) held a zoom meeting with journalists during his week long trip to Washington, DC, where he met with his U.S. and Mexican counterparts.

"We talked about energy resilience," Dodig said. "We talked about food and agriculture resilience. We talked about resilience in our manufacturing supply chains. [...]"

Dodig, along with BCC President Goldy Hyder, said their U.S. and Mexican counterparts "asked primarily about energy."

"It's important we get that right," Dodig added. "It's important that we're seen as a constructive player both in our region and globally."

The BCC delegation made up of Dodig and Hyder met with the Chairman of the U.S. Senate Energy and Natural Resources Committee, Democratic Senator Joe Manchin from West Virginia, and Republican Senator Pat Toomey of Pennsylvania, who, Hyder said, were "very welcoming" to the delegation's ideas.

There were also talks during the same week Dodig was in Washington, DC, about Canada as a NATO member state having to fulfill its commitment to spend two per cent of its Gross Domestic Product (GDP) on military spending.

"Canada needs to invest as a member of NATO to the expectations that NATO sets for itself and its membership," Dodig said. "I believe that we can do that, and I believe that we can do that sensibly to benefit everyone through peace and stability," he added.

Three days after Dodig said this, the Trudeau government announced it would begin negotiations for the purchase of 88 Lockheed Martin F-35 fighter jets at the cost of $19 billion.

During that same week of announcements, the U.S. Federal Energy Regulatory Commission gave its approval in reconsidering the completion of three interstate gas pipelines, one of them the controversial and widely opposed Mountain Valley Pipeline. Another, the Atlantic Coast Pipeline that could have also shipped fracked gas from West Virginia to the strategic Atlantic sea port of Norfolk, Virginia, had already been cancelled due to the people's opposition to the project.

In arguing for completing the Mountain Valley Pipeline that will transport fracked gas from West Virginia, his home state, Senator Joe Manchin said on March 3 that "the U.S., working together with our allies, can put an end to Putin's ability to weaponize energy against Ukraine and our NATO allies." Ironically, Manchin favours the same kind of approach by the U.S. presenting the need to use North American fossil fuels and infrastructure as a way to "strengthen our ability to use energy as a geopolitical tool to fight for our values abroad and support our strategic partners."

So much for not using energy as a weapon.

While U.S. Senator Manchin talked about building infrastructure to counter Russia and take over European fossil fuel markets, Alberta Premier Jason Kenney tweeted in a similar vein, "Now if Canada really wants to help defang Putin, then let's get some pipelines built! Alberta stands ready, willing and able to supply the energy markets to displace Russia from global markets. Message to Ottawa and Washington: stop helping Putin and OPEC by killing pipelines."

In the words of Tristan Goodman, President of the Explorers and Producers Association of Canada (EPAC), there are opportunities to increase production to address affordability issues in North America and the energy security problem around the world, but it's not a certainty.

"You will need investors to have confidence that they should increase production. And if you're not going to have investor confidence, you will not see increased production," he said.

Goodman, who took part in a panel focusing on Canadian energy at CERAWeek sponsored by Standard&Poor Global in Houston in early March, was referring to the fact that in recent years, instead of increasing oil and gas production, investors have pushed oil companies to give more cash to shareholders.

"In the long-term, or in the mid-term, there does need to be a conversation with Canadians over infrastructure related to natural gas and oil," added Goodman. In other words, governments have to step in with more pay-the rich schemes to restore what they call "investor confidence."

Canadian Oil: 'Godsend' for U.S. Imperialists

On March 23, a senior leader with the U.S. Chamber of Commerce stated he would rather see the country focus on oil imports from Canada than other potential partners. The Canadian Energy Centre, an Alberta government corporation, reports:

"'From a pure, selfish U.S.-centric viewpoint, we should be careful and very particular where we import from,' says Christopher Guith, Senior Vice-President at the Chamber's Global Energy Institute.

"'We have an administration that is currently begging OPEC, specifically Venezuela and potentially even Iran to increase production when Canada has significant spare capacity, especially long term, that could come online. But the takeaway capacity is not there, primarily because this administration revoked permits for Keystone XL on the first day in office.'

"Guith says U.S. imports of Canadian oil -- which doubled between 2005 and 2019, according to the U.S. Energy Information Administration -- have been a 'godsend' for 'energy security.'

"'If you look back over the last 25 years, bringing Alberta's oil sands production online is the second most important advent to American energy security, second only to our own shale revolution. It transformed our energy economy incredibly and enabled us to push out OPEC imports,' he says. [...]

"[I]t makes more sense that much of the U.S. oil is sold on global markets while U.S. refineries stick to Canadian heavy oil, Guith says. 'It is more economic for the U.S. to export a good portion of the light, sweet crude that we produce and then import the heavy crude from Canada,' he says.

"'If we could get all that we needed, we wouldn't even have to worry about Venezuela, or potentially Saudi Arabia, even Russia, other producers of heavy crude, but the lack of takeaway capacity limits the amount of crude that we get from Canada. And so, we have to turn to others like Russia.'"[1]

A report by the Canadian Energy Centre notes, "A strong American oil and gas industry is a critical element of economic prosperity and the North American energy security network linking Canada, the United States, and Mexico."

It fails to point out that this "strong American oil and gas industry is a critical element" not in our joint prosperity but as a pillar of the U.S. economy and its gigantic aggressive military spread throughout the world that could not function without Canadian oil and gas.

All of this shows that none of these plans will help Canada's energy sector become an important component in creating a self-sufficient economy, one that addresses the needs of the people, develops trade relations with other countries on the basis of mutual benefit and respect, and contributes to making Canada a factor for peace on the world scale, instead of wars of aggression, occupation and regime change.

What these plans mean is that the current pay-the-rich direction of the economy will continue to cause havoc across the country. Governments at the federal and provincial levels will continue to clash and collude over stepping up the extraction of fossil fuels while simultaneously promoting a "green economy." The people will continue to pay "carbon taxes" while the federal government claims it is meeting their required cutback of carbon emissions.

Significantly, it means a continuation of the policy to build pipelines by splitting the working people, pitting the well-being of the environment and hereditary rights of the Indigenous peoples against the need for jobs. It will mean they will step up their violation of Indigenous hereditary rights to decide what happens on their territories and further criminalize dissent, while taking no responsibility for the harm done to the land, water and people's health.

People are demanding a new pro-social direction for the economy that gives them control over the natural and social environments


1. "Chamber of Commerce Leader -- Reliable Supply Supports Jobs and Helps Lower Consumer Energy Costs," Deborah Jaremko, March 23, 2022, Canadian Energy Centre.

This article was published in
Volume 52 Number 4 - April 3, 2022

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