- Mar 2017
The Canadian government established Petro-Canada as a state owned Crown Corporation to manage oil resources in the country. This decision was aided by a variety of international pressures, mainly the OPEC (Organization of Petroleum Exporting Countries) embargo in which the oil rich Middle Eastern countries prohibited the sale of oil to the U.S., Canada, U.K., Netherlands, and Japan due to U.S. support of Israel during the 1973 Yom Kippur war. This oil embargo sparked a world shortage which spiked prices and caused Canada to look at moving towards more domestic sources of oil independence. With a new government, under the leadership of Trudeau, they adopted a more nationalist focus to their energy independence emphasizing the importance of Canadian industry. The Canadian government looked to reduce the influence of U.S. multinational oil companies in their own abundant oil fields in Alberta. Additionally, as a Crown Corporation, Petro-Canada was tasked to perform many tasks that wouldn’t be expected of privately owned companies. For example, the Canadian Government expected that Petro-Canada would explore the frontier for various, harder to access, resources like tar sands, heavy oil, or areas that would be difficult to develop transport chains. This charge from the state made it so Petro-Canada was more invested than private companies in exploring difficult to reach areas like the Mackenzie Delta in the mid 1970’s. The duties of the Crown Corporation were beyond simply providing energy for the nation, but also ensuring a sustainable future of energy independence.
Annotation drawn from Fossum, John Erik. Oil, the State, and Federalism: The Rise and Demise of Petro-Canada as a Statist Impulse. Vol. 2. University of Toronto Press, 1997.