Editing National Energy Program (section)

===Canadian context===
{{Main|History of the petroleum industry in Canada|Energy policy of Canada}}
The Canadian petroleum industry arose in parallel with that of the US. The first oil well in North America was dug in Ontario in 1848 by using picks and shovels, one year before the first oil well in the United States had been drilled in Pennsylvania.<ref>{{cite book |last=May |first=Gary |title=Hard Oiler!: The Story of Canadians' Quest for Oil at Home and Abroad |url=https://books.google.com/books?id=NdYFO2GGkooC&pg=PA33 |year=1998 |page=33 |publisher=Dundurn |isbn=978-1-55488-184-0}}</ref> By 1870, Canada had 100 oil refineries in operation and was exporting oil to Europe.<ref>[http://www.petroleumhistory.ca/history/cdnbeginnings.html] Petroleum History Society - Canadian Beginnings</ref> However, the oil fields of Ontario were shallow and small, and oil production started to decline around 1900 while the automobile started to become popular. In contrast, US oil production grew rapidly after huge discoveries had been made in Texas, Oklahoma, California, and elsewhere. By the end of World War II, Canada imported 90% of its oil, mostly from the US.

The situation changed dramatically in 1947, when [[Imperial Oil]] drilled a well near [[Leduc, Alberta]], to see what was causing peculiar anomalies on its newly introduced [[reflection seismology]] surveys. The peculiar anomalies turned out to be oil fields, and [[Leduc No. 1]] was the discovery well for the first of many [[history of the petroleum industry in Canada, part one#Leduc|large oil fields]]. As a consequence of the large finds, cheap and plentiful Alberta oil produced a huge surplus of oil on the Canadian Prairies, which had no immediate market since the major oil markets were in Ontario and Quebec. In 1949, Imperial Oil applied to the federal government to build the [[Enbridge|Interprovincial Pipeline]] (IPL) to [[Lake Superior]], which allowed it to supply the [[Midwestern United States]]. By 1956, the pipeline had been extended via [[Sarnia]], Ontario, to [[Toronto]]; at {{convert|3100|km}}, it became the longest oil pipeline in the world. The federal government gave approval to build a pipeline in Western Canada, and in 1953, the {{convert|1200|km}} [[History of the petroleum industry in Canada#Crude oil arteries|Transmountain Pipeline]] was built from Edmonton to [[Vancouver]], British Columbia, with an extension to northwest [[Washington (state)|Washington]]. The pipelines did more to improve the energy security of the United States than that of Canada since the Canadian government was more interested in Canada's [[trade balance]] than in military or energy security. The Canadian government assumed that Eastern Canada could always import enough oil to meet its needs and that imported oil would always be cheaper than domestic oil.

====National Energy Board====
{{main|National Energy Board}}
The National Energy Board (NEB) was created in 1959 "to monitor and report on all federal matters of energy as well as regulate pipelines, energy imports and exports and utility rates and tariffs."<ref name="OAG_2007" /> The NEB regulated mostly the construction and the operation of oil and [[natural gas pipeline]]s crossing [[provinces and territories of Canada|provincial]] or international borders. The Board approved pipeline traffic, tolls, and tariffs under the authority of the National Energy Board Act.<ref>{{citation |author=Government of Canada |author-link=Government of Canada |title=National Energy Board Act (R.S.C., 1985, c. N-7) |publisher=Department of Justice |url=http://laws-lois.justice.gc.ca/eng/acts/N-7/index.html |date=2014-04-01 |orig-year=Enacted 1985 |access-date=2014-11-03}}</ref>

From its introduction in 1961 to its end in September 1973, the National Oil Policy (NOP) was the cornerstone of Canadian energy policy. It "established a protected market for domestic oil west of the Ottawa Valley, which freed the industry from foreign competition,"{{attribution needed|date=October 2016}} and the five eastern provinces, which included major refineries in Ontario and Quebec, continued to rely on foreign imports of crude oil, such as from Venezuela.<ref name="OAG_2007">{{citation |url=http://www.oag-bvg.gc.ca/internet/English/att_c003aa_e_11101.html |title=2000 May Report of the Commissioner of the Environment and Sustainable Development |date=15 November 2007 |work=Auditor General |access-date=27 January 2015}}</ref> In 1973, "the federal government announced the extension of the inter-provincial oil pipeline to Montreal (completed in 1976), froze prices of domestic crude and certain oil products, and sought to control export prices. The federal government announced this change in policy so that supply problems in the United States would not automatically raise prices for Canadian consumers."{{attribution needed|date=October 2016}}<ref name="OAG_2007" />

After the first OPEC price shock in 1973, the federal government "formally broke the link between domestic prices and international prices. The objective of 'made-in-Canada' prices for crude oil was to protect Canadians across the country from the whims of the world oil market and to provide producers with enough incentives to develop new energy resources."{{attribution needed|date=October 2016}}<ref name="OAG_2007" />

In 1981, the [[Edmonton]] economist Brian Scarfe claimed that the NEB's setting of the price of oil and natural gas in Canada meant that producers did not receive full world prices for the resource and that consumers were not charged world prices.<ref name="Scarfe_1981" />{{rp|2–5}} He claimed that the subsidies had a number of side effects, including larger trade deficits, larger federal budget deficits, higher real interest rates, and higher inflation.<ref name="Scarfe_1981" />{{rp|2–5}}<ref name="Doern_1984">{{citation |first1=B. |last1=Doern |first2=G. |last2=Toner |title=The NEP and the Politics of Energy |year=1984}}</ref><ref>{{citation |first=J. |last=McDougall |title=Fuels and the National Policy |year=1982}}</ref>

====Petro-Canada====
{{main|Petro-Canada}}
[[File:Petro-Canada logo.svg|thumb|150px|upright=1.3|Petro-Canada logo]]
In 1975, in response to the world energy crisis, the federal government created Petro-Canada, a Canadian [[crown corporation]] that was national oil company. Petro-Canada was involved in the massive [[Hibernia oil field|Hibernia]] oil find off Newfoundland and was a partner in the Syncrude [[oil sands]] venture in Fort McMurray, Alberta. The Alberta oil industry was then overwhelmingly owned by Americans, who were also the major importer of Albertan oil. The [[Petro-Canada Centre]] (1975–2009) was known in the oil patch as "Red Square" until its purchase by [[Suncor]].<ref name="Red Square">{{citation |url=http://www.cbc.ca/news/canada/suncor-rebrands-red-square-1.810901 |title=Suncor rebrands 'Red Square' |date=4 August 2009 |access-date=27 January 2015}}</ref> The NEP included plans for a "greatly-expanded Petro-Canada."{{attribution needed|date=October 2016}}<ref>{{citation |url=http://www.thecanadianencyclopedia.ca/en/article/petro-canada/ |title=Petro-Canada |first1=Larry R. |last1=Pratt |first2=Sasha |last2=Yusufali |date=16 September 2011 |access-date=27 January 2015}}</ref>

====Price controls====
In 1974, Canada inaugurated its first system for pricing oil with three objectives: to regulate prices of domestic crude oil by federal-provincial agreements, to subsidize imported oil so that consumers in Eastern Canada would enjoy lower prices, and to control prices and quantities of crude oil and products in the exporting market. [[Synthetic crude]] oil (upgraded petroleum from oil sands) was exempted from the policy and was sold at the world price. The federal government levied a tax on all oil refined in Canada to pay for the difference between the price of synthetic and that of conventional crude oil.<ref name="OAG_2007" />

The federal budget in October 1980 reflected the concern that Canada could "become increasingly dependent on insecure foreign supplies and, therefore, unnecessarily subject to the vagaries of the world oil market."<ref name="Budget_1980" />

On 28 October 1980, Finance Minister [[Allan MacEachen]] introduced the National Energy Program but cautioned that things could get worse if there were "new shocks coming from the price of oil or food or if the upward momentum of costs and prices proves impervious to the economic climate I am seeking to create."<ref name="Budget_1980" />  
{{blockquote|"The new energy policy limits the rise in prices of oil and gas to domestic consumers and thus continues to protect us from the violent shocks of OPEC price increases. It strengthens our specific measures to promote the most economical use of energy and in particular the displacement of oil by other fuels. It provides new impetus to the development of new sources of supply, through direct government programs and through new incentives of particular value to Canadian-owned producers. Energy policy is only the most urgent element of our new strategy. Renewed growth in productivity and lower costs are needed throughout the economy. Within the overall expenditure plan which I will lay before the House, we have assigned clear priority to economic development."|MacEachen October 1980}}