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July 2011

Vol. 16, No. 28 Week of July 10, 2011

Canada mulls national energy strategy

Energy minister says strategy would end regulatory foot-dragging, opposition to pipelines, answering the crucial need for new markets

Gary Park

For Petroleum News

Canada urgently needs a National Energy Strategy (NES) to secure future oil and natural gas markets and serve as a stepping stone to a North American policy, said Alberta Energy Minister Ron Liepert.

He will take his arguments to Kananaskis, a mountain retreat west of Calgary, on July 16-19, when Canada’s federal, provincial and territorial energy and mines ministers will again see if they can resolve their differences over an NES.

They will have backing from the Canadian Council of Chief Executives (which includes the leaders of 13 energy companies and 13 financial firms), the Canada West Foundation (a Calgary-based think-tank) and the Calgary Chamber of Commerce.

In the build up to Kananaskis, Liepert told a business audience in Calgary that a “coherent, collaborative Canadian energy framework is needed if we are going to realize our full potential as a global resource powerhouse.”

But he is not going to the meeting with any greater hopes than reaching agreement on “some basic principles, goals and objectives of what a strategy would look like” as a prelude to involving the “real stakeholders” (Canadians) in the discussions.

If pipelines such as Enbridge’s Northern Gateway to the British Columbia coast and TransCanada’s Keystone XL to the U.S. Gulf Coast are not approved, Alberta may not be able to sell all its bitumen production by 2020, he said.

That in turn would put at risk estimates that oil sands development could contribute C$1.7 trillion to the Canadian economy over the next 25 years, or C$68 billion a year, creating C$300 billion in tax revenues, Liepert said.

“Every dollar invested in the oil sands creates about $9 of economic activity and a third of that is outside the Alberta border,” he said.

Leading Canadian energy executives say the real reason for an NES is to circumvent an energy regulatory process that has bogged down applications such as Northern Gateway and the Mackenzie Gas Project.

“If we had a national strategy that said something like, ‘Canada needs to take all necessary steps to ensure we are not reliant on only one customer for our products,’ we wouldn’t be having a debate about whether the Northern Gateway pipeline should be approved or not. Either it would fit in that strategy or it wouldn’t,” Liepert said.

“If we had a continental strategy, it might say something like ‘the U.S. should take all available (steps to reduce its reliance) on imported offshore crude,” he said. “If that were the case, we wouldn’t be having debate today about TransCanada’s Keystone expansion.”

He said harmonizing regulations across Canada would also ensure all parties were treated fairly on environmental issues and not face different sets of regulations in different provinces.

The Chamber of Commerce and Canada West Foundation, supported by utility company Enmax, have developed a position paper calling for Canada to strengthen its energy ties with the United States and Asia-Pacific markets, pursue continuous improvement on environmental performance without hurting the economy, build a national consensus on energy issues and foster development of renewable and non-renewable energy.

It said the fact that the U.S. is the biggest external consumer of energy “should not preclude diversifying our customer base to capitalize on high growth regions such as the Asia-Pacific and attract higher prices.”

The chief executives’ council wants to set up a bilateral energy and environmental accord with the U.S. along with initiating a national approach to climate policy and carbon pricing and launch a technology and innovation strategy.






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