Abstract

In a previous paper presented at last year's C.I.M. meeting, the role of the new oil price leadership and the long-term prospects for stable oil prices and supplies were discussed. On both counts, this author was of the opinion that the OPEC leadership is unshakeable for a long time to come, and that world oil prices will remain at approximately their current level in 1974 dollars. This paper will focus on the opportunities and advantages for the U.S. and Canada to coordinate their energy policies for the mutual benefit of both countries in the light or the two dominant considerations namely stable overseas oil prices and supplies over the long term and the opportunities for technology transfer on the international scene.

Canada has a lot to gain and very little to lose, by taking the lead in a bid for joint U.S.-Canadian energy policies. Some of the attractive prospects still open for Canada in this respect are discussed in the paper, such as: Supplying? the Northeastern and part of the North Central regions of the U.S. via overseas oil imports to Eastern Canada, as well as developing a secure market for tar-sand oil and for nuclear power export to the U.S. The economic viability of these two last prospects would become attractive only if the price of oil in Canada and the U.S. is allowed to reach equilibrium with the world price. In turn, security of supply from overseas sources could be bolstered by strengthening ties with oil exporting countries, namely in the form of large-scale technology transfer and development programmes.

Introduction

The analysis presented in early 1974 on the, "New Oil Price Leadership and the World Price or Oil", (Ref. 1) is here reviewed and updated in the light or developments of the past year, up to the First International Energy Conference convened by France (Ref. 52) with the objective of assessing North America's posture, focusing on Canada's opportunities ithin the new world economic order brought about by the "energy crisis."

The past year was a trial of learning period for all parties involved, namely the OPEC countries, the "Group of 77" or Third World countries which includes OPEC, the Soviet bloc or COMECON countries, China and the technologically advanced, petroleum hungry countries of OECD.

The posture of the respective parties has somewhat evolved during the past year with a strengthening of OPEC despite the oil surplus situation that has developed in February 1975, and with a weakening if the U.S. led drive to force a reduction in the price of oil, despite the formation of an International Energy Agency, an intense diplomatic wooing of the major Oil exporting countries and as a last resort, despite hints of military intervention(Ref. 30).

Although the "hard to handle" Western Leaders such as Willy Brandt, Edward Heath and particularly the late Georges Pompidou have been replaced by more docile, open-minded or pro-American leaders within the OECD camp, the U.S. has not yet managed to organize an effective cartel of oil importing countries.

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