If sabotage of the energy industry doesn't end now, we face impoverishment

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With his removal of Nicolás Maduro from Venezuela, Donald Trump has opened another front in his economic assault on Canada by indirectly targeting our oil industry. Canada must respond decisively with diversification to the world market via the rapid construction of at least another pipeline to the coast, and ideally more.

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There is now a new urgency to Canadian pipeline construction that didn’t exist prior to the weekend. The reason is simple: Venezuela has the world’s largest proven oil reserves, and its oil – from the Orinoco Belt — is extra heavy crude, similar to that found in Alberta’s oilsands. With around 303 billion barrels of proven reserves, Venezuela has nearly double the proven reserves of Alberta’s heavy oil. Further, until 1997, Venezuela was the no. 1 exporter of heavy crude to U.S. Gulf Coast refineries. This only changed in 1999 with the election of Hugo Chavez who raised export prices and royalties.

Due to sanctions and mismanagement of the Maduro regime, the Venezuelan flow of production has dwindled to a trickle. In the 1970s, Venezuela produced over 3.5 million barrels per day and was producing 2.5 million in 2011; that number has now shrunk to under 1 million barrels per day because of infrastructure decay and general mismanagement of the country’s most valuable resource. All this is to say that Venezuela is a potentially serious player in the oil market, which has self-sabotaged itself for the past decade or more. Alberta’s production, in contrast, has increased continuously from around 200,000........

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