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To view complete article, please visit :http://www.geopoliticalmonitor.com/a-canadian-petroleum-reserve-security-or-savings-4736/ A Canadian Petroleum Reserve: Security or Savings? Joshua McEvoy - Oct. 8th, 2012 Geopoliticalmonitor.com It was only a little over a month ago that the world, as well as most Canadians, discovered that Canada was host to the world’s strategic maple-syrup reserve. The confounding theft of $30 million worth of maple-syrup led The Atlantic to expound upon the rationale for this largely unknown government-sanctioned enterprise. In sum, the need to assure that supply of the product will meet its demand is at the crux of the foundational logic. This rationale is similar to that which has spawned the creation of strategic petroleum reserves (SPR) the world over. Yet Canada is a nation without a SPR, and petroleum, unlike maple-syrup, lacks a viable substitute in the event of a significant shortage. The Arab oil embargo of 1973-74, which saw crude oil prices quadruple, made it acutely evident that Western economies, and their people’s way of life, depend entirely upon the security of petroleum supply at a reasonable and anticipated price. The devastating economic and psychological impact of the embargo prompted many countries to create SPRs, which are simply stockpiles of various petroleum products to be released in the event of crises and/or significant shortages. Ever cautious, Switzerland has had a SPR since 1940. In March 2001, the International Energy Agency (IEA) took the prudent step of mandating that all of its twenty-eight members possess a ninety day reserve. Unfortunately, this mandate included an exemption for the four IEA members that are net-exporters of energy. Denmark and the United Kingdom, as two of the exempted four, subsequently instituted their own reserves in compliance with a separate European Union (EU) mandate for all of its respective members. Canada and Norway are the only IEA members without a reserve. However, Canada, unlike Norway, is in fact unableto supply the entirety of its population with domestic petroleum products under normal circumstances, let alone in the event of a significant crisis. The statement that energy-abundant Canada is unable to meet the petroleum demands of its own citizens in normal circumstances may seem shocking, but the truth behind it is widely accepted. Richard Gilbert of the Globe and Mail suggested in 2010 that Quebec is particularly susceptible to an “oil shock,” as the province imports 90% of its crude oil from foreign sources, with Algeria at the top of the list. The story is similar for the rest of Eastern Canada. The reason for this is the logistics of the energy industry. Due to economic forces and treaty obligations under NAFTA, the pipelines of the Canadian energy industry run largely north-south. In turn, there is no viable manner by which to transport the vast energy supplies of Western Canada to refineries and subsequently consumers in Eastern Canada. To view complete article, please visit :http://www.geopoliticalmonitor.com/a-canadian-petroleum-reserve-security-or-savings-4736/  follow on Twitter | friend on Facebook | forward to a friend  Copyright © 2012 Geopoliticalmonitor.com, All rights reserved.  You are receiving this email because you opted in at our website.  Our mailing address is:  Geopoliticalmonitor.com 5700-100 King Street West Toronto, On M5X1C7 Canada