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It’s hot-button time in Canada Arctic, environment figure large in federal election, more than sideways glance at U.S. campaign; Harper favored by industry Gary Park For Petroleum News
Canada’s Prime Minister Stephen Harper has called a federal election for Oct. 14, right in the thick of the U.S. campaign.
Given that everything Harper does is carefully and strategically designed, take it as a given his timing is no accident, especially if the contest between John McCain and Barack Obama turns U.S. energy security and the environment into spin-off issues that benefit Harper’s attempt to gain a majority government.
For close to three years Harper has been forced to engage in a skillful balancing act, cobbling together short-term alliances with the left-of-center Liberal and New Democratic parties, to pass legislation and preserve his minority administration.
Now, with his so-called “pre-dawn election” call on Sunday, Sept. 7, he has apparently decided to make an all-or-nothing bid to gain outright control of the government.
And most pundits are of the view that the direction the U.S. campaign takes on energy and the environment will influence the vote north of the 49th parallel.
For the petroleum industry, there is little doubt, outside of his blunders over the taxing of income trusts, that Harper is the preferred choice.
Whatever action he takes on the environmental front is not likely to spell the undoing of the oil sands sector.
Growing belief in Mackenzie And there is a growing belief based on Harper’s own declarations that the Mackenzie Gas Project will proceed, serving as a springboard to exploration and development of Canada’s most northerly resources.
Despite some Canadian misgivings about the volume of oil and natural gas exports — both the environmental impact and the depletion of national reserves — the sentiment still favors the huge economic benefits Canada enjoys from its petroleum trade with the U.S.
If the next U.S. administration puts the emphasis on more stable, secure sources of supply Canada can only benefit from growth in those exports, which translates into even greater investment in the upstream sector accompanied by more high-paying jobs and long-term benefits to federal, provincial and territorial revenues.
Should the incoming U.S. president give urgency to advancing the Alaska natural gas pipeline, the pressure will be on the Canadian government to finally clear away the fiscal and regulatory obstacles that have slowed the Mackenzie Gas Project.
Harper has said as much, with his late-August statement that “in the not-too-distant future (the MGP) will come to fruition … opening up a region of the country in a way that it has not been opened up before and of establishing our economic reach and sovereignty in a way it has never been done before.”
In other words, the MGP plays a key role in Harper’s overriding desire to ensure Canada does not let its claims to Arctic sovereignty crumble amid inaction — a goal that has no dissenters among Canadians, although the route to that objective is the subject of an intense debate over the exploitation of Arctic resources.
The Harper government, despite its pledge to streamline the northern regulatory process, has been slow to move on the MGP, failing to settle on fiscal terms with the co-venturers. A majority win for the Conservative party could see a fast turnaround in the pace of decision making.
It also might reignite the dormant debate over the blending of the Mackenzie and North Slope gas delivery systems.
Mackenzie path not clear-cut But the path ahead for Mackenzie gas is far from clear cut.
Alternatives North, a social justice coalition based in Yellowknife, Northwest Territories, has made the case for environmental safeguards in the North in a recent response to special recommendations from Neil McCrank to the federal Department of Indian Affairs and Northern Development on ways to improve the NWT regulatory system.
Speaking for the coalition, Doug Ritchie said northerners “don’t want the uncontrolled and unsustainable development that is happening in Alberta and that’s the model put forward in the (McCrank) report.”
He said the recommendations fail to address the “real issues with the northern environmental management system” including the federal government’s failure to implement and fund the process.
Ritchie also objected to the exclusion of submissions from non-governmental organizations and northern boards from the McCrank report, while industry submissions were cited, including those by the Conference Board of Canada and the Fraser Institute, both promoters of “unfettered resource development.”
“The Alberta-type model is so appealing because people don’t have much control over it,” he said.
Ritchie said the report reflects the growing oil and gas industry and the fact that there is limited monitoring of the industry’s activities.
He said there is no desire by any aboriginal groups to “substantially change” the Mackenzie Valley Resource Management Act by lessening community involvement.
“We have a good system that aboriginal people fought for at the negotiating table,” he said.
A federal spokeswoman said the government won’t issue a response until the report has been fully reviewed.
Growing interest in Arctic But interest in the Arctic as the last great global hope to generate large new oil and gas reserves and provide a security shield for North America is gathering momentum, bolstered by U.S. Geological Survey findings that the area north of the Arctic Circle may hold almost one-quarter of the undiscovered, technically recoverable resources.
Benoit Beauchamp, executive director of the Arctic Institute of North America at the University of Calgary, said the Arctic is the least explored of all the places left on Earth where there is any reasonable hope of making major conventional discoveries “in spite of all the formidable barriers against exploration,” including the lack of infrastructure.
The spotlight is now on BP and an ExxonMobil-Imperial Oil joint venture in the Canadian portion of the Beaufort Sea, where both have made substantial commitments to exploration licenses and are now developing seismic and drilling programs.
Mudslinging between parties It took less than a day for the environment to turn green to black as party leaders engaged in a spate of mudslinging.
Liberal party leader Stephane Dion, the greatest threat to Harper’s re-election hopes, called the prime minister a liar and accused him of grossly misrepresenting the Liberal’s carbon tax Green Shift plan, which is aimed at taxing greenhouse gas emissions and provides offsetting tax breaks and subsidies.
He said Canadians “want to do the right thing for their wallet and for the planet.”
The main plank involves a tax to eventually raise C$15 billion a year from diesel, natural gas, coal and jet fuel designed to reduce the use of fossil fuels and the resulting greenhouse gas emissions.
Harper said the tax would punish Canadians at a time of sky-high energy prices and when the economy is slowing down.
Polls show 45 percent of Canadians supported the plan in early September, down from an initial 52 percent.
“We want to focus on social justice and the environment. Harper wants to pit one against the other,” Dion said Sept. 8.
Harper countered that it is not credible for Dion to claim his carbon tax will be revenue-neutral and have no impact on taxpayers.
“Every politician in history who promises a new tax says that it is temporary or revenue neutral. That is never true,” he said.
Dwindling support for the Green Shift is viewed as a threat to business and industry in Western Canada, where Harper has his strongest support and is thus unlikely to shift the current balance of power.
To become the leader of a majority government, Harper has little prospect of making major inroads in Ontario, which accounts for about 30 percent of the Canadian population, leaving Quebec as his best hope of turning a long list of second place results in 2004 into victories.
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