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February 2010

Vol. 15, No. 9 Week of February 28, 2010

Hands across the border

Canada’s provincial premiers get vote of confidence from US governors who want to keep the cross-border crude oil pipelines open

Gary Park

For Petroleum News

For seven of Canada’s 10 provincial government premiers it was music to their ears.

While slightly discordant, a handful of U.S. state governors delivered an impromptu version of “O Canada” on Feb. 20, to melt away feelings of unease and tension over cross-border trade relations and threats by some states to use climate-change measures to block imports of crude from the Alberta oil sands.

But, even more pleasing to the premiers, was the apparently unanimous message from the governors about how much they valued Canada’s contribution to U.S. oil and natural gas security by meeting 16-20 percent of U.S. demand.

The first-ever meeting between the premiers and the National Governors Association in Washington, D.C., ended with most governors endorsing calls for stronger bilateral ties and commerce.

For Canada’s petroleum-producing provinces, some of the most soothing words came from Minnesota’s Republican Gov. Tim Pawlenty, touted as a presidential candidate in 2012, who said the U.S. would be “very ill-advised” to impose any sort of barriers to Canadian oil.

“There is a very large need for Canadian crude in Minnesota,” he said. Utah’s Gary Herbert echoed that sentiment.

Stelmach a no-show

Of Canada’s premiers, three were no-shows — British Columbia’s Gordon Campbell (because of hosting duties at the Vancouver Winter Olympic Games), Newfoundland’s Danny Williams (recuperating from heart surgery) and, most surprisingly, Alberta’s Ed Stelmach (because of unspecified family commitments).

Stelmach’s absence was unfathomable to observers given the fact that Alberta is the only producer of crude from the oil sands and stands to lose the most if U.S. states attempt to boycott or ban the flow of sands-derived crude across the 49th parallel.

In Stelmach’s place, Alberta sent International Relations Minister Iris Evans, leaving behind Environment Minister Rob Renner, who might have quieted the doubts of some governors by repeating his recent message in the Alberta legislature that: “The fact remains, the overwhelming evidence clearly indicates that climate change is real, that human-induced climate change is something that we need to address.”

But the premiers probably left the U.S. capital happier than they arrived.

Saskatchewan’s Brad Wall, chairman of the premiers’ federation, said U.S. officials recognized concerns in Canada that sales of Canadian crude oil and other products in the U.S. should not be subject to any punitive trade measures imposed in the name of reducing greenhouse gas emissions.

“There is an awareness of that concern and I think a general acknowledgement that this is an issue that will have to be resolved by way of international agreement, as opposed to unilateral action,” he told CanWest News.

Meetings with administration

In addition to meeting governors, the premiers also had sessions with Larry Summers, President Barack Obama’s senior economic advisor, and Lisa Jackson, the administrator of the Environmental Protection Agency, which has threatened, in the absence of action by Congress, to regulate carbon dioxide emissions which could erect a barrier to any Canadian products from carbon-intensive industries.

Wall said he made a case for Canadian efforts to develop carbon-capture projects that could reduce greenhouse gas emissions from coal-fired electrical generation plants, which are a leading source of U.S. GHGs.

Ontario’s Dalton McGuinty urged the governors to support barrier-free trade between the two countries.

“We need not only to protect that trading relationship, we need to enhance it,” said McGuinty, who has been critical of what he views as indirect federal subsidies to support oil sands development.

Based on the discussions in Washington, he sensed “there is a new awareness that in an era of globalization, where we are all so trade-dependent, we’ve got to guard against protectionism and ensure we keep our trade links strong.” Wall summarized the meetings by quoting the words of President John F. Kennedy on the strength of the Canada-U.S. relationship.

During a 1961 visit to Canada, Kennedy said: “Geography has made us neighbors. History has made us friends.”






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