If North America is independent in crude oil production and crude exports are banned, then supply or demand shocks in the rest of the world will have no effect on U.S. prices. Prices will still be as high as they are now, but price volatility can be greatly reduced. Awesome!
Matt Yglesias, a smart guy, issued a really dumb tweet on this issue. He then blogged, “But unless you're planning to actually isolate North America from worldwide commodity markets, you're not ‘independent’ of anything.” Well, yes! Sweet Mary, why not isolate North America from worldwide commodity markets? Aaaarrrgh!!! Noooooo! The neoliberal brain eater gets another one! Expand your mind, Matt!
Still, there is a real rub. It is unlikely that North America will achieve oil independence without Canada, that poses a dilemma. Enbridge is trying to build the Northern Gateway pipeline from Alberta through British Columbia. Build that pipeline, and North America will still be linked into global markets. The benefits from crude oil independence will be lost.
We have established that the President can stop hydrocarbon exports from the U.S. Unfortunately, because we totally lost the War of 1812 back in the day, the President cannot stop hydrocarbon exports from Canada. Does that mean that the battle is lost?
Nope. First, the pipeline runs through B.C., but the oil is produced in Alberta. B.C. is holding Alberta hostage for more money. The B.C. government can afford to walk away: the revenues from the deal as-is are that low.
Second, the First Nations are sitting in a catbird seat. The land law is a mess. Consultations could stretch on forever. Payoffs are tough, because there are around forty different groups.
Third, while Ottawa could step in, the federal incentives are not clear. Equalization payments do spread around some of the bounty of Albertan production, of course. But there is an alternative that would give Alberta a new market and let Canada enjoy the benefits of “isolation from worldwide commodity markets”: ship the stuff east! Right now, eastern Canada imports oil from Algeria and Venezuela, which is a little crazy when you think about it. Eastern Canada, then, is at best indifferent to Enbridge and at worst mildly hostile.
Finally, the New Democratic Party in B.C. has already gone all-in against the pipeline. It will be next to impossible to walk that back if the NDP wins, and why would they want to anyway? 56% of voters in B.C. oppose the pipeline, and the NDP looks set to kill the Liberals at the next provincial election.
(I have no idea if U.S. oil companies are trying to sabotage the pipeline. It would be in their interests, but it also might set a bad precedent for Keystone. I suspect not, therefore.)
In short ... this pipeline could very easily not happen. That is the way I would bet. Call it 2:1 odds. Answer your question, Bernard?