Canada must nationalize its oil and gas industry: Quebec accounting professor
April 11, 2007 – 7:50 p.m.
MONTREAL (CP) – Canada must nationalize its oil and gas industry to help lower the cost at the pumps by one-third, says a Quebec university accounting professor.
Leo-Paul Lauzon said Wednesday that Quebec could also build a refinery with independent dealers and negotiate directly with oil exporting countries.
Lauzon analyzed annual reports of major oil companies such as Exxon Mobil, Royal Dutch Shell, BP Amoco, Chevron Texaco and Conoco Philipps over a period of eight years with researcher Marc Hasani.
“We can’t afford to keep getting poorer,” said Lauzon, who teaches at the University of Montreal at Quebec.
Lauzon has been calling for the nationalization of Canada’s oil and gas industry over the last several years.
He told a news conference the analysis has shown that major oil companies continue to eliminate their competition by either buying or merging them and most of the profits go to the shareholders rather than investing and building refineries.
“Currently Canada, self-sufficient in oil and gas as the third-largest producer of natural gas and the sixth-largest for oil, has prices imposed on it due to events that happen in Iran, Iraq or Saudi Arabia,” he said.
“Among oil-producing countries, Canada is going the wrong way. It’s the only western country to privatize this essential resource, largely to foreign interests,” Lauzon said.
Petro-Canada (TSX:PCA) of Calgary was created as a government-owned company during the Trudeau era in response to an oil shortage during the mid-1970s due to a crackdown on supplies by the OPEC oil cartel.
However, subsequent Liberal and Conservative governments have since divested their ownership in Petro-Canada, which remains a major integrated oil company with exploration, production, refining, distribution and retail operations.
Lauzon said that if the federal government can’t be convinced to nationalize the Canadian oil industry, Quebec should act with its own governmental bodies, such as pension fund manger Caisse de depot et placement du Quebec, in partnership with independent dealers.
He suggested they could build a refinery in partnership and negotiate with oil producing countries such as Venezuela, Mexico, Bolivia or Iran.
The political instability and lack of security of all those countries, with the exception of Mexico, make the suggestion questionable, an industry representative said Wednesday.
“One of the big foundations that Canada now has … is that everyone in the world looks to Canada as the symbol of security, reliability and stability,” Greg Stringham, spokesman for the Canadian Association of Petroleum Producers, said.
After flirting with nationalization under the National Energy Policy, Canada learned a competitive market with many players is more effective than one price and goal-setting entity, Stringham added.
he Canadian oil and gas industry is very responsive to world oil prices,” he said. “And that’s what’s really led to the development of a lot of the technology and growth that we’ve seen in Canada.”
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