Canada Energy Crisis Essay

Canada is an excellent example of the country with a very sensible and reasonable energy policy plan. Regarding to the IEA Sankey diagram [5] (Picture 1), Canada has never had considerable economic shocks or significant changes in consumption by type of energy and levels of imports/exports in its history for the last 50 years. There were a few oil crises that had a slight influence on Canadian economy because of the Canadian policy. Canada was historically divided into two oil markets due to the great distance between the sides; the east side had to use imported oil and the west side used its own supplies; «For most of the 1961-73 period, East consumers to the West paid between $1.00 and $1.50 per barrel above the world price» [1]. The great growth of oil prices in early 70s exposed the importance of government activity in energy police and since then, they have played a larger role in the development of the petroleum industry than before.

«The US played a large role in the development of Canada's oil and gas reserves» [2]. In order to prevent possible crisis problems that Canada was faced with Canadian government established a two-price system for Canadian oil in September in 1973. The idea was about having fixed price oil at domestic market and export price that was growing. «To keep the domestic price of oil lower than the export price, the government levied an export tax on oil, the proceeds of which help to subside the prices paid by the five eastern provinces» [3]. It was a brilliant political stroke of Liberal government; and it was also popular due to the advantages over U.S. that were given to the Canadian manufacturing