Petro-Canada: The National Oil Company as a Tool of Canadian Energy Policy

Because of similarities between American energy needs and the needs of industrial countries having national oil companies, along with the recurring interest in the proper U.S. Government role in oil activities, GAO reviewed the responsibilities and functions of an existing national oil company to determine what lessons might be learned and applied to the U.S. energy situation. Of the numerous government-owned companies, the Canadian national oil company, Petro-Canada was the most logical candidate for review because of the similarities in the energy and economic situations of the United States and Canada. GAO reviewed the four principal functions assigned to Petro-Canada: (1) to act as a source of information on the oil industry by participating in various oil activities to provide Federal energy policymakers and regulators with reliable information and first-hand operating experience to regulate the industry more effectively; (2) to act as a social benefit company by accelerating the development of high-risk and high-cost energy resources which the private sector could not reasonably be expected to develop in large quantities; (3) to act as a trading company by purchasing oil for Canada directly from foreign producer countries; and (4) to produce more oil, both domestically and internationally.