While oil is cheap, China is cannily buying up to 700,000 barrels of oil a day to boost its emergency oil reserves.
Ensuring energy security can make governments money. The U.S. Treasury has netted $22 billion by selling oil from its giant strategic petroleum reserves (SPRs) when oil prices were high and filling them when prices were low.
China is joining most rich countries in stocking SPRs because it knows Saudi Arabia is driving down oil prices to stall output of high-cost, non-OPEC oil, including U.S. shale oil.
Oil demand will recover and with output flat, another massive international oil supply shock will come. China is boosting reserves from 30 to 100 days of oil imports to protect its people's economic and physical wellbeing when the shortage hits.
Should we follow China's lead? Quebec needs emergency oil reserves much more than its maple syrup reserve. Oil powers almost all Quebec's transportation.
Alberta's tar sands' two centuries of recoverable oil cannot protect us from international oil shortages. Canada exports much oil in the West, but imports 40 per cent of Canadians' oil use in the east. Quebec imports 90 per cent of its oil.
Imports will drop somewhat when Enbridge's pipeline 9B is reversed and ships some Western Canadian oil to Montreal.
But the proximity of Enbridge's pipelines to North Dakota shale oil means line 9B will also bring U.S. oil to Montreal.
As recently as 2012, Algeria and other OPEC countries supplied half of Canada's oil imports. Now half of Canada's crude oil imports and much refined oil, including gasoline, come from the United States.
U.S. oil imports seem reassuring, but aren't.
Would U.S. oil shipments to Quebec and Ontario stop during international supply crises? Probably. When CBC radio host Anna Maria Tremonti asked the late Matt Simmons this question in a 2008 interview, he replied: "It's pretty simple. We'd shut you off."
Simmons headed Houston's largest energy investment bank and advised George W. Bush on energy.
Despite the surge in fracked shale oil, the U.S. Energy Information Administration forecasts the U.S. will import a quarter to a third of its oil through 2035. National security always trumps anything else in the U.S. In a supply crunch, Washington will probably keep domestic oil for Americans.
Will Enbridge line 9B and TransCanada's Energy East pipeline give eastern Canadians oil security? Not necessarily.
If it makes commercial sense, both pipeline companies will sell domestic oil to eastern Canadians. But there is no guarantee the incidental security would last because oil for Quebecers and Atlantic Canadians would be a sideline to delivering oilsands oil to world markets.
Canada promises the U.S. oil security. The U.S. has a national energy security and independence plan. If Canada looks after U.S. oil security, and the U.S. looks after its own oil security, who looks after Canadians?
Canada belongs to the International Energy Agency. Unlike the other members, including oil-exporting Norway and Denmark, Canada has no SPRs. We need them.
Should Canada follow France's 1925 lead and require that oil corporations keep emergency stocks for national purposes or follow China and the U.S. and have government oil reserves?
To access low oil prices now, Canada should start with requiring oil companies maintain stocks, but plan now to build government stocks.
Canadians can reach long-term energy security, though, only by also combating climate change. Phase out Canadian carbon energy exports, direct Canadian conventional, non-fracked oil to eastern Canadians and use it to transition to a low carbon future.
Gordon Laxer is the founding director and former head of University of Alberta's Parkland Institute and author of a forthcoming book on Canadian energy and ecological security.
This piece originally appeared in the Montreal Gazette and is reprinted with permission from the author.
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