In the early 20th century, to help spark exploration and development in what were then the remote and uncompetitive oil fields of the Canadian west, the government of Canada adopted a unique energy policy. While Canada east of the Ottawa River (e.g. Quebec and the Maritimes) would continue to import cheap foreign oil, west of the Ottawa River (principally Ontario) oil would have to be piped in from western Canada at above world prices. This system, though no longer government enforced, is still largely in effect today.
This worked fine until the 1974 oil crisis, caused by the Arab invasion of Israel, and the subsequent OPEC boycott(s), which created a huge rise in the price of oil on the world market. For the first time, Canadian oil was dramatically cheaper than foreign oil. This created huge profits and sparked massive development and exploration in the oil fields of western Canada (primarily Alberta, but to a much lesser extent British Columbia and Saskatchewan as well). Calgary nearly doubled its population in half a decade (from 325,000 in 1974 to 650,000 by the early 1980s), and Alberta went from being among the poorest to the richest province in Canada (a title it still holds today).
While Alberta was doing great exporting oil at huge profit to the US and the rest of Canada, the manufacturing heartland of eastern Canada suffered greatly due to the increase in costs. To address the problem of the failing economy in eastern Canada (where the vast majority of Canadians lived), and the lack of Canadian ownership in their own oil industry (which was dominated by American companies), the Pierre Trudeau government introduced the National Energy Program - commonly referred to simply as the NEP.
The NEP primarily did three things:
- It set a "Canadian Price" for oil - lower than the world price - at which Alberta oil would be sold to the rest of the country.
- It created a crown corporation oil company in Petro Canada, and gave it 'back in provisions' which allowed it to automatically claim a stake in any new oil project.
- And it increased the federal share of tax revenues from oil exports.
The plan enraged Albertans. In response, the Alberta government of Peter Lougheed cut oil production, and support for the federal Liberals in Alberta fell to nil. Bumper stickers reading "Let the Eastern Bastards Freeze In The Dark" were a common sight in Alberta. This time period also saw the rise of western (primarily Alberta) separatism, and set in motion the movement that would lead to the Reform Party and eventually the Canadian Alliance. The rest of the country, however, was supportive of Trudeau and saw Albertans as greedy and ungrateful for the decades of eastern subsidization it took to get the Alberta oil industry where it was.
All this would be for little, however, as oil prices soon began to fall and the Alberta oil industry stagnated. Many Albertans blame Trudeau and the NEP for the drop in their fortunes, but in reality world oil prices just went back down for completely unrelated reasons. In 1984 the Progressive Conservative government of Brian Mulroney, upon coming to power, dismantled what was left of the NEP.
Even today most Albertans consider the National Energy Program a four-letter-word and liken any federal program that they feel sacrifices their interests to the East to the 'evil' NEP (e.g. the Kyoto Protocol, equalization payments, etc.). | 
