For those who follow the energy sector, the US government blocked the construction of the Keystone XL pipeline several weeks ago. The proposed pipeline was to transport oil from Alberta to the Gulf of Mexico where it was to be refined and then either exported or sold into the US market. We all know that politics in the US has hit an all time high on the 'slime' meter, but what shocked me most was the reactions of Canadians.
One question: Is Canada so dependent on one pipeline and one product export that the entire stock market can drop by the cancellation of one project?
The type of economic, political and media reaction was one that is typical to those that we see in an emerging market: where there are only a handful of projects that make up a large portion of an economy and if one fails, the entire country is rocked to its foundation.
The Canadian reaction to the Keystone decision is a reflection of a failed national energy strategy as well as a failed national strategy to diversify the economy while reducing its dependence on the US. If Canada is to secure its economic future, it needs to make sure that it produces more and exports more to countries other than the US.
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