Kelly McParland: Canada shouldn't panic over Venezuelan oil

When I was still a kid in the 1970s, the OPEC oil cartel launched an embargo that sent prices through the roof, hitting western economies like a sledgehammer.

When prices spiked, long line-ups formed at pumps, gas stations ran dry, speed limits were slashed. Received wisdom was that long family road trips were dead, drivers would need smaller, more efficient vehicles, strict conservation was the new normal.

My father didn’t believe the end was nigh, spent a few days in Florida where real estate had crashed, and bought a townhouse on the beach at fire sale prices. It turned out to be a smart move: eventually the market adjusted, the lineups disappeared, road trips continued and people returned to gas-guzzlers. America’s biggest-selling vehicle for more than 40 years has been Ford’s F-Series pickup truck.

We no longer own the townhouse, but for 20 years it offered a winter respite. For me, it was a lesson that world crises don’t always play out as anticipated. Short-term predictions are easy: shock produces uncertainty, which produces nervousness, which often puts pressure on governments to respond posthaste. Longer-term is tougher, since the very definition of uncertainty is that solutions aren’t clear.

The United States’ surprise foray in Venezuela is a prime example. It could be the administration’s most disruptive threat yet to world order. Or it could backfire, a crisis too far that convinces ordinary Americans that Washington’s unpredictable leadership seems to have forgotten its focus on affordability and other domestic affairs in favour of a series of foreign adventures.

Just days into the Venezuela affair, Washington is well into contradictory statements and rival assertions. President Donald Trump’s declaration that “we’re going to run” the country devolved into reports that Venezuela’s Vice President Delcy Rodríguez would be the new leader, under U.S. oversight and according to Washington’s rules.

That morphed into the old order remaining in Caracas, minus Nicolás Maduro, but with a pledge to hand over “between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America,” according to Truth Social. Rodríguez’s staying power is open to doubt, however, given that Maduro’s fearsome long-time enforcer Diosdado Cabello, officially minister of the interior but also head of heavily-armed loyalist gangs already patrolling the streets, is under indictment in the U.S. and could conclude he risks ending his days like Maduro in an American cell if he doesn’t move to secure power himself.

Disconcerting as the Venezuela situation may be, it pales next to the tumult that would erupt should the administration make a serious effort to follow through on renewed threats to seize Greenland and its resources, one way or another.

Secretary of State Marco Rubio, considered a key figure behind the Venezuela incursion, reportedly told congressional leaders in a closed briefing that the U.S. wants to buy Greenland, not invade it. The White House press secretary quickly undercut that assurance by asserting that “utilizing the U.S. military is always an option at the commander in chief’s disposal.” Trump aide Stephen Miller dramatically fed the flames by boasting that “nobody’s going to fight the United States militarily over the future of Greenland,” while questioning Denmark’s “right” to the territory it has controlled for more than 200 years.

“For the United States to secure the Arctic region to protect and defend NATO and NATO interests, obviously, Greenland should be part of the United States,” Miller declared.

Except Denmark is already a member of both NATO and the European Union, and for the U.S. to invade, attack or seize land from a fellow NATO member would be a blow to western unity well beyond a raid on a decrepit Latin American dictatorship. Potentially its death knell.

Canada’s Liberals sought election on the assertion that Canada faced a “hinge moment” in which “threats from a more dangerous and divided world are unravelling the rules-based international order” on which Canada relies. To prevail, Prime Minister Mark Carney warned, “we will have to … work harder than we’ve had to in decades.”

Carney may not have known the half of it. If this week’s events demonstrate anything, it’s the need to focus with even greater determination on readying for a world in which it appears so many of the certainties we’ve long taken for granted will no longer apply.

Conservative leader Pierre Poilievre says Ottawa must act by approving a new western oil pipeline without concerning itself about potential opposition from British Columbia or indigenous communities,

“Courts have already confirmed that provinces cannot block interprovincial pipelines and that Indigenous consultation does not mean a veto,” he wrote in a letter to the prime minister. “Under Canada’s constitution, legal authority for interprovincial pipelines rests only with the federal government.”

There’s no question that Canada must sell more energy to more customers rather than relying on U.S. buyers, and must move quickly in doing so. A new pipeline would certainly help. But pipelines aren’t built quickly. The Trans-Mountain expansion took 12 years to complete in the face of regular obstruction efforts and spiralling costs. The Keystone expansion spent 15 years being batted around by politicians, courts and activists before being killed by President Joe Biden.

There is no specific pipeline plan to get behind at the moment. Ottawa and Alberta have a memo of understanding and the apparent will to proceed, but no blueprint, no known offers to build, and no committed financing beyond hopes the private sector will head the effort.

Existing energy operators have expansion plans that could significantly add to export capacity in the interim. And the extent of the threat from Venezuela is up for debate in any case: the country has vast reserves but its existing energy infrastructure is so decrepit it would take years and billions of dollars to rebuild, a task American oil firms have shown little enthusiasm for embracing.

The world has plenty of oil on hand, there are easier places than Venezuela to get more, and the country has a long history of nationalizing industries and seizing assets that must trouble any prospective investor.

In the face of all this, there is no pressing reason for Ottawa to run roughshod over provinces and interest groups that may have valid interests that could be dealt with without pulling out a hammer and hitting them with it. The seriousness of the threat facing Canada is obvious. It needs to be addressed with speed, firmness and determination, but also with clear heads.

There may come a time when confrontation becomes inevitable, and it will have to be handled by putting Canada’s national interests ahead of other concerns.  But that time’s not now and may not come. There’s no point creating a brawl when no brawl is required.

National Post