National Energy Policy

The National Energy Program (NEP) was an energy policy of the Government of Canada from 1980 to 1985. It was created under the Liberal government of Prime Minister Pierre Trudeau by Minister of Energy Marc Lalonde in 1980, and administered by the Department of Energy, Mines and Resources.

In his preamble to the announcement of the National Energy Program, introduced as part of the October 1980 federal budget, Finance Minister Allan MacEachen echoed concerns by leaders of developed countries globally regarding the recession following the two oil crises of the 1970s and the "deeply troubling air of uncertainty and anxiety" shared by Canadians. The Bank of Canada reported on economic problems that were accelerated and magnified. Inflation was most commonly between 9 and 10 percent annually and prime interest rates over 10 percent.

"... ever since the oil crisis of 1973 industrial countries have had to struggle with the problems of inflation and stubbornly high rates of unemployment. In 1979 the world was shaken by a second major oil shock. For the industrial world this has meant a sharp renewal of inflationary forces and real income losses. For the developing world this second oil shock has been a major tragedy. Their international deficits are now three to four times the sum they receive in aid from the rest of the world ... They are not just Canadian problems ... they are world-wide problems. At the Venice Summit and at meetings of Finance Ministers of the IMF and OECD, we have seen these new themes emerge."

Historically, the United States had been by far the world's largest oil producer, and the world oil market had been dominated by a small number of giant multinational (mostly American) oil companies (the so-called "Seven Sisters of oil": Standard Oil of New Jersey, alias Exxon (US); Standard Oil of New York, alias Mobil (US/UK); Standard Oil of California, alias Chevron (US), Gulf Oil, now part of Chevron (US); Texaco, now part of Chevron (US); Anglo-Persian Oil Company, alias BP (UK); and Royal Dutch Shell, alias Shell (UK/Netherlands). During the late 1940s, 1950s, 1960s, and early 1970s, the discovery and development of a large number of giant oil and gas fields outside of the United States by these and other companies kept the world flooded with cheap oil. At the same time, global demand increased to take advantage of the increased global supply at lower prices. In particular, American oil consumption increased faster than American production, and the US, which had previously been a net oil exporter, became a major oil importer.

...
Wikipedia