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Oil, the State, and Federalism

Oil, the State, and Federalism: The Rise and Demise of Petro-Canada as a Statist Impulse

  • Book Info
    Oil, the State, and Federalism
    Book Description:

    John Erik Fossum explores the reasons for the federal government?s intervention in the energy industry between 1973 and 1984 and shows how its initial objectives failed, culminating in the privatization of Petro-Canada in 1990.

    eISBN: 978-1-4426-7801-9
    Subjects: Political Science

Table of Contents

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  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-v)
    (pp. vi-vi)
  4. Acknowledgments
    (pp. vii-2)
  5. 1 Introduction
    (pp. 3-24)

    Since the discovery in the second half of the nineteenth century that oil is a highly efficient source of fuel, millions of wells have been drilled in the crust of the earth, on both land and sea, and vast sums have been spent and enormous efforts taken to search for the ‘black gold.’ Gradually, as producers, investors, politicians, and others became aware of the uneven global distribution of the resource, the search for and delivery of oil became a matter of great urgency, and the ‘politics of oil’ became a central issue in world affairs.

    The resource’s political importance increased...

  6. 2 The OPEC Oil Crisis, Canada, and the Federal Adjustment Strategy
    (pp. 25-72)

    From the Second World War until at least the early 1970s, federal–provincial interaction in the energy sector was characterized mainly by continuing attempts on the part of policy-makers to reach an appropriate balance between provincial needs and federal requirements. In this process, the needs of multinational corporations tended to dominate the formulation of Canada’s energy policy, and as a result the federal government tended to share the concerns of both the oil industry and the producing provinces.

    These concerns were especially apparent within the framework of the Diefenbaker government’s National Oil Policy (NOP), introduced in 1961. The NOP, at...

  7. 3 The Establishment of Petro-Canada
    (pp. 73-103)

    The birth and early days of the federal government’s national oil company was – as is usual in these matters – a prolonged and untidy affair. The nationalist-oriented politics of the late 1960s and new concerns about foreign ownership had brought the notion of more direct government intervention into the political mainstream and led to harsh critiques of the 1961 COGL regulations. Yet the 1973 EMR report had been ambivalent about the need for a NOC. In the House of Commons debates that year, ‘the minority Liberal government seemed to be hedging its bets while the New Democratic Party pressed...

  8. 4 International Oil-Market Changes and the NEP
    (pp. 104-151)

    To many observers at the time the rise of the Organization of Petroleum Exporting Countries, and the economic turmoil that surrounded it, marked a turning point in postwar history. The remarkable postwar expansion of the advanced industrial economies was at an end; no longer could governments promise unlimited economic growth. Nor could they retain exclusive control over the management of the world economy; developing countries, particularly those rich in resources, had to be brought into the system. Most important, American postwar leadership, already perceived to be on the wane, looked to have been dealt another, decisive blow. An era was...

  9. 5 Petro-Canada and the Effects of the NEP
    (pp. 152-198)

    Within the framework of the NEP, Petro-Canada had to reconcile its past role as a vehicle for energy development with a greatly expanded role in Canadianizing the oil and gas industry. Because federal energy policy at the time was informed and largely driven by jurisdictional conflicts that prompted Ottawa to promote those areas under federal jurisdiction, the strong Canadianization and Canada Lands thrust of Petro-Canada became an act of ‘policy mobilization.’ The corporation was pulled into and used in the ongoing federal–provincial conflicts, both to counteract the role and importance of the producing and potentially producing provinces and also,...

  10. 6 Oil in a Changing International Context and Conservative Energy Policy
    (pp. 199-235)

    By the time the Liberals left office in 1984, the issue was not whether the NEP would be changed, but what would be left of it. The Clark and Mulroney Conservatives had been opposed to the NEP all along. Their task of doing away with it was greatly facilitated by the continued strengthening of the international developments that had served to undermine the NEP in the first place, and also by the mobilization of countervailing forces, primarily in the oil-producing provinces and in the business sector, that had been hostile to the NEP from the start. In response to what...

  11. 7 The Privatization of Petro-Canada
    (pp. 236-267)

    By February 1990, when it finally announced the decision to privatize Petro-Canada, the Conservative government had been in power for six years. From the start, the party’s heavyweights had pondered selling the Crown corporation. Even before being elected, in 1983, Mulroney had appointed a five-person task force on privatization. Although the committee’s report was never made public, according to D.J. Savoie it became ‘widely known’ over time that it ‘recommended selling numerous crown corporations, including Petro-Canada, CN, Air Canada, and AECL.’¹ During the 1980s, it seems, privatization was never far from the minds of Tory policy-makers, who carefully and systematically...

  12. 8 Conclusion
    (pp. 268-292)

    The twisted and tangled threads of the federal government’s massive intervention in oil policy during the first two periods under scrutiny (1973–84) were not abruptly snipped away in the last period (1985–91). Rather, they were unravelled in a cautious and prolonged process lasting until at least 1990. The rationale for Ottawa’s intervention, and the unravelling of that intervention, were closely connected.

    At first the federal government responded in a neomercantilist fashion to the sudden and dramatic rise in the price of oil and to the threat of future supply disruptions arising from OPEC’s actions. Ottawa emphasized the need...

  13. Notes
    (pp. 293-328)
  14. Bibliography
    (pp. 329-352)
  15. Index
    (pp. 353-368)