The first National Oil Policy (NOP), released on Feb.1, 1961, proposed increasing western Canadian production from 600,000 to 800,000 barrels of oil per day in two years with more domestic consumption.
The NOP proposed that the Canadian domestic oil market be divided at the Quebec-Ontario border. West of the line refineries would buy western Canadian oil and east of the line refineries continue to import Middle East crude. The boundary was called the Borden Line.
Western Canadian producers would develop a second market of exports to the United States.
The NOP abandoned a proposed expansion and extension to Montreal of the ten-year-old Canadian crude oil pipeline system from Alberta to Ontario and the United States midwest.
The architect of the policy was the Borden Royal Commission on Energy, created in 1957 by Prime Minister John Diefenbaker and headed by Henry Borden, the president of Brazilian Traction Light and Power, later known as Brascan.
At the beginning of commission hearings, independent Canadian producers advocated a pipeline to Montreal and access to that market for Canadian crude.
However, the NOP nixed the proposed pipeline extension of the ten-year-old Canadian crude oil pipeline system to Montreal.
The Borden Commission and the NOP gave the multinational oil producers a Canadian supply pattern they wanted and the independent Canadian producers led by Dome Petroleum were persuaded to change their minds because they would have access to two growth markets.
Also included in the NOP was the creation of the National Energy Board and it played a strong role in the success of energy exports, pipeline development, and regulation.
George Hees, Prime Minister Diefenbaker’s gregarious Minister of Trade and Commerce used the NOP as his political proving ground.
Previously dismissed as a wealthy playboy, Hees earned serious credentials by heading the implementation of the NOP.
There were no enforcement provisions and compliance depended on persuasion by charm, and arm-twisting when charm was not enough.
Hees and a cadre of deputy ministers did an able job of making the Borden Line a success.
However, Hees opposed Diefenbaker on the nuclear arming of BOMARC missiles stationed near North Bay, Ontario.
Hees was one of the cabinet ministers who thought Canada had an obligation to NATO to accept the nuclear arms.
When the Liberals also supported nuclear weapons, they defeated Diefenbaker in the election of 1963.
Hees rose in Conservative esteem during the BOMARC debate and was an unsuccessful candidate for the leadership of the party when Diefenbaker was deposed in 1967 and was an elder statesman for Prime Minister Brian Mulroney.
He was one of the energy-literate advisors that Mulroney and Energy Minister Pat Carney relied on to repair the damage that Prime Minister Pierre Trudeau did with the 1980 National Energy Program.
The National Oil Policy, a Conservative tool successfully did the federal government’s share of nurturing the growth of the Canadian oil industry until the mid-1970s.
Hees was a political craftsman who helped steer Conservative energy policy in the right direction.
After the Trans Mountain Pipeline fiasco, what Canadian energy needs are new Conservative policy tools and a new generation Conservative policy craftsmen like George Hees.
– Frank Dabbs is a veteran energy, business, and political journalist and author.
