The current dispute between Canada and Saudi Arabia feeds nicely into the third installment of our 2018 Tanker series. NDP leader Jagmeet Singh’s recent suggestion that “there are other nations we can look at in terms of access to oil (CBC News)” is almost a perfect tie-in to this segment. To recap, in part one of our series, we looked at the effect of the Trans Mountain pipeline expansion project on tanker traffic off Canada’s west coast, determining the clear majority (roughly nine to one) of oil tankers moving from Alaska through the Salish Sea to Washington State are American, and the slight increase in traffic to accommodate expanding the pipeline would be effectively inconsequential. We also looked at the volumes of tanker traffic entering eastern ports. In part two, we explored the numerous new safety enhancements which will be implemented by both Kinder Morgan Canada Inc. (TSX:KML) and the federal government to ensure the risk of ship-sourced oil spills will be negated as much as possible. While the second installment focused on TMEP tanker traffic specifically, it highlighted the enormous safety and environmental precautions Canadian energy initiatives are required to go through – a standard not matched anywhere in the world on a scale comparable to Canada’s energy sector.

In this third installment of our series, we examine the top countries Canada imports oil from and the consequences of purchasing foreign oil through the lenses of corruption, human rights, and environmental performance – a timely connection to current policies and comments made by our federal leaders – which beg for an obvious solution.

To first understand where Canada ranks in the world’s top oil producing countries, – oil meaning crude oil, all other petroleum liquids, and biofuels – as of 2017 we were ranked fourth at 4.87 million barrels per day (U.S. Energy Information Administration), or a five per cent share of the world’s total oil production, behind the U.S. at 14.86 million barrels per day, Saudi Arabia at 12.08 million barrels per day, and Russia at 11.18 million barrels per day.

Although we are one of the world’s top oil producing countries, lack of infrastructure connecting our oil reserves in western Canada to eastern provinces means we are extremely limited in the volumes of oil we can ship across the country, making it necessary to import oil from foreign exporters. The U.S. is our top supplier, sending 412,000 barrels per day north across the border (with much of this oil originating in Alberta and Saskatchewan), followed by Saudi Arabia at 87,000 barrels per day, and Algeria at 85,000 barrels per day being shipped here by tanker.

The U.S. exports oil to Mexico, Canada, China, Brazil, and Japan to list the top five countries. Saudi Arabia’s are Japan, the U.S., China, South Korea, India, and Singapore. Algeria exports oil mostly to France, Canada, the U.S., Netherlands, and the United Kingdom. Nigeria’s top oil export countries are India, the U.S., Spain, South Africa, and France (Canada ranks 7th). Norway’s are the United Kingdom, Netherlands, Germany, France, and Sweden (Canada ranks 9th). Canada, with access to eastern ports, could not only supply all the oil needed in eastern Canada, but also reduce the amounts of oil imported to our European allies from other regions of the world.

Purchasing foreign oil means Canada is stimulating the economies of these countries (while internally damaging Canada’s growth prospects), and supporting regimes which do not share our environmental, human rights, corruption and rule of law standards and expectations.

It is important to understand the consequences of this and exactly what our money is contributing to – a topic ignored by our politicians and activists. The oil will come from somewhere, as clearly evidenced by Canada importing from and supporting Saudi, Algerian and Nigerian regimes.

Corruption

Transparency International releases an annual Corruptions Index which ranks 180 countries by perceived levels of public sector corruption according to experts and business people. Countries are rated on a scale of 0 to 100, where 0 is highly corrupt and 100 is highly clean.

In 2017, some of the countries supplying Canada with oil were awarded high or average scores, such as Norway, which was ranked third in the world with a score of 85, the United Kingdom, which was ranked eighth with a score of 82, and even the U.S., which was ranked 16th with a score of 75. Other countries, however, were determined highly corrupt, such as Iraq, which was ranked 169th in the world with a score of 18, Nigeria, which was ranked 148th with a score of 27, and Russia, which was ranked 135th with a score of 29.

Over the next 20 years, it is expected that 90 per cent of the world’s oil production will come from developing countries. Many countries which are rich in oil and gas are home to the poorest people, as the wealth stays in the hands of politicians and industry insiders. A big part of the problem is that revenues in these countries don’t get published and payments made to governments to exploit resources remain a secret. Corrupt leaders hide stolen funds unnoticed, and inadequate financial statements make it easy to disguise corrupt deals. Many companies don’t publish information and hide royalties, taxes, and fees they pay.

In 2017, U.S. President Donald Trump signed legislation to repeal anti-corruption rules for energy companies set in place by the Obama administration. The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) was introduced in 2010 to increase transparency in the energy sector, making it mandatory for all American oil, gas, and mining companies listed on the U.S. Stock Exchange to report any payments they made to foreign governments and make this information available to the public. Civilians of energy-rich countries often do not see wealth generated by industry, as it goes straight to those with political connections. These rules made it possible for civilians to hold their governments accountable. However, Trump believed the rules stunted America’s opportunity on the international stage and that American businesses were put at a disadvantage. In a vow to put American business first, Trump abolished the rules, leaving financial reporting by American energy companies unchecked.

Canada was tied with the U.K. on the 2017 Corruptions Index at a ranking of eighth in the world with a score of 82. We follow strict regulations under the Canadian Corruption of Foreign Public Officials Act (CFPOA) when it comes to reporting foreign payments and bribery provision.

Human Rights

The Human Freedom Index is co-published annually by the Cato Institute, the Fraser Institute, and the Liberales Institut at the Friedreich Naumann Foundation for Freedom. It ranks the countries of the world based on personal, civil, and economic freedom. The institutes describe human freedom as the absence of coercive restraint. We looked at how countries supplying Canada oil ranked within the index, and as with the Corruptions Index, some scored well, such as Norway, which was ranked seventh out of 159 countries with a score of 8.57 out of 10, and the United Kingdom, which was ranked 11th with a score of 8.55. However, most countries scored poorly, such as Algeria, which had a human freedoms score of 5.05, ranking 153rd out of 159, Saudi Arabia, ranking 149th with a score of 5.37, and Nigeria, which ranked 133rd with a score of 5.92.

Since 2015, Saudi Arabia has committed numerous violations of humanitarian law. As of November 2017, at least 5,295 civilians have been killed and 8,873 wounded, according to the UN Human Rights Office. Human Rights Watch shows that there have been 87 unlawful attacks by the Saudi coalition since 2015, six unlawful airstrikes between June and September 2017 which killed 33 children, and the coalition has attacked civilian factories, warehouses, and other protected sites. Dozens of activists have been arrested and are serving long prison sentences in Saudi Arabia for peacefully protesting human rights abuses. In Algeria, authorities regularly arrest and prosecute peaceful activists, including those protesting about unemployment and public services, according to Amnesty International. Citizens continue to be persecuted for their religious beliefs, and the Labour Code continues to unduly restrict the right to form trade unions. Doing business with these countries and putting wealth in the hands of their corrupt leaders and political allies will only continue to lessen the humanitarian rights and freedoms of their citizens. Canada ranked 11th on the index with a score of 8.54.

Environmental Standards

The Environmental Performance Index (EPI) is produced each year by Yale University and Columbia University in collaboration with the World Economic Forum. The EPI provides a basis for comparing, analyzing, and understanding environmental performance for 180 countries. Countries are scored and ranked based on their environmental performance in a variety of categories. Results show a positive correlation with country wealth, as meeting sustainability goals requires monetary resources to invest in human and environmental health. Of the top countries that supply Canada with oil, the U.S. rated 27th out of 180, Saudi Arabia 86th, Algeria 88th, Nigeria 97th, Norway 14th, Kazakhstan 101st, Côte d’Ivoire (Ivory Coast) 139th, United Kingdom 6th, and Azerbaijan 59th. Countries with low scores, for example Côte d’Ivoire, are falling short when it comes to emissions and waste leading to environmental contamination.

Côte d’Ivorie’s methane emissions intensity specifically is ranked 142nd of 188 countries, and its black carbon emissions intensity is ranked 165th. According to the Fraser Institute, out of the highest earning OECD (The Organization for Economic Co-operation and Development) countries, Canada ranks 10th of 33 for environmental performance, based on air quality, water quality, greenhouse gases, air emissions, water resources, forests, biodiversity, agriculture, and fisheries. We are also the first country to commit to regulations which limit damaging and wasteful methane emissions from new and existing oil and gas facilities nationwide, and we have committed to reducing the waste of natural gas by 40 to 45 per cent in the next eight years.

Conclusion

Jagmeet Singh’s contention that the Trans Mountain pipeline project should not go ahead, as shown in recent social media posts in which the NDP Leader attested that a “rigged process … [made it] clear [the] pipeline should not be built (Twitter)” and that the “pipeline is a bad deal that won’t solve the problem (Twitter),” as well as numerous appearances and speaking engagements at anti-pipeline rallies does not seem to take into account that our need for oil is growing, and this oil needs to come from somewhere. As Alberta Premier Rachel Notley said in May of this year, Singh’s statements are “absolutely, fundamentally, incontrovertibly incorrect in every element (Global News).” The social license of the energy sector cannot be reduced to a single project or attribute. The bigger picture must be considered. When examining the countries currently supplying Canada with oil, human rights indecencies, corrupt political leaders, and countless blights on the environment are things that cannot be overlooked. Our high standards on corruption, environmental regulation and human rights and our reflecting high rankings across the board in numerous reputable global performance indexes in these categories make Canada the best choice for Canadian energy.