How many times have you been talking with a fellow Albertan regarding water, fuel, power or cattle? Think about it. Those four commodities have been the subject of news reports off and on for decades. They all have one thing in common and that is foreign investment.
When cattle are brought to the forefront, it is because the USA has shut the border down to Canadian beef sales. Water comes to mind when the USA wants to get fresh. Power comes to mind every time California and the Midwest States have brown outs, because we assume that Alberta is feeding a large portion of the North America grid. Fuel comes to mind because we are sitting on one of the largest bitumen deposits in the world next to Russia, when the USA threatens to boycott our so-called dirty oil. Yes my fellow Albertans we got what they need, and our cousins to the south continually come crawling to the trough.
It seems that more often than not the USA has threatened to stop buying any of these products from Albertans. We feel threatened, betrayed and down right angry. You can be sitting in a restaurant in Alberta and listen, as many an Albertan will say. “We should just turn off the spigot to our oil, water or power. Maybe then they will appreciate our services.” or “Lets just pull the switch and leave in the dark ages for a spell.”
That’s actually pretty good logic. It fits well within the thinking of good-old capitalism. If you want to raise the price of anything, create a shortage. The increase in demand is good for the economy. A great example of this is the current price of oil. Sitting somewhere around $36.00 per barrel, oil once sold internationally for $115.00 per barrel. The cocky OPECians came out with a news release in early July stating, “The price of a barrel of oil will never drop, below $100.00!” It appears that the richest tribal community in the world finally took notice when in early December OPEC announced that they are going to reduce production of oil. Taking a lesson from their Economic 101 professor, they are trying to stimulate the prices by creating a demand through reduced production. To bad for them that Canada and Russia can produce more then OPEC if need be.
So if OPEC can get away with it, why can’t Alberta? Even former Communists have mastered the art of Capitalism. This week Russia has taken the example of the Kingdom. CBC News announced Tuesday that “Russia cuts gas flow to Europe.” The reports states that “Reductions in supply by Russia’s state gas company halted natural gas flow to several European states Tuesday and severely cut back supply to other nations amid its price dispute with Ukraine.” They cut all the countries of Europe off because Ukraine would not allow a price increase! At the risk of stating the obvious… it’s winter there! I would suspect that a demand has been created. Natural gas is the primary heating and cooking fuel in most countries. It should not take long before Europe puts pressure to bear on the Ukraine to start paying their bills.
Are the actions of Russia fair? For that matter are the actions of OPEC fair? First the OPEC solution did nothing to create a demand because while they were basking in their luxury other nations refusing to come under another 70’s style energy crisis accelerated their exploration and technology development. But in Russia’s case, I would suspect that that all pipelines lead to the Steppes of Russia.
The immediate response regarding Russia’s actions ranged from, “How unethical” to “Russia is not that stupid, they know they have the upper hand.” But many global monitors will criticize their actions, equating it to global economic terrorism. But it really is not the business of any person, group or nation how they do business. If they need to justify an increase their rates, so be it. The world has been under that energy policy since OPEC was formed and the founding countries of that organization implemented price controlling. In the 70’s the founder of OPEC, Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela cut the spigot off to the USA. In the end, prices of gasoline increased, and the markets adjusted.
So, I guess I am saying, Alberta has the upper hand. Do we join in on the new world order strong arm policies?
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