Canada’s provincial and territorial premiers and its energy ministers vowed at separate conferences in July to build oil and natural gas exports markets in the United States and Asia-Pacific, despite mounting domestic and global pressure to clean up oil sands production, and to work on national energy “collaboration.”
In no time, the rare and hard-won display of unity started unraveling, with British Columbia Premier Christy Clark hedging on whether her government would support Enbridge’s Northern Gateway project, the first significant route to Asia for oil sands crude.
Then Ontario Premier Dalton McGuinty drove a wedge into the solidarity by arguing his province, which accounts for 40 percent of federal tax revenues, objects to the Canadian government transferring “subsidies” to Western Canada to support development of the petroleum industry.
The same day an “action plan” for a national energy strategy was released, Ontario objected to language praising the “responsible and sustainable” development of the oil sands.
That was quickly followed by spokeswoman for Quebec Natural Resources Minister Nathalie Normandeau who insisted an energy strategy should strictly be a provincial matter.
Not all provinces attended
The speed with which the initial building blocks were dismantled underscored why Canadian governments have struggled and failed to find a replacement to a National Energy Program that was introduced in 1980 with the objective of promoting Canadian ownership of oil and gas resources and setting a fixed price on the commodities.
In short order the program triggered an exodus of U.S.-based companies and cost thousands of jobs, while effectively robbing Alberta alone of an estimated C$50 billion to C$100 billion from its gross domestic product until the program was abolished in late 1985.
It didn’t help that Ontario (Canada’s largest energy consuming province) and British Columbia (the third-largest oil and gas producing province) did not send their ministers to the energy summit.
However, Alberta Energy Minister Ron Liepert welcomed what he viewed as an overwhelming show of support for a “collaborative approach” to build a national framework that would place the onus on the Canadian government to promote export pipelines and streamline the regulatory approval process to avoid a repetition of the drawn-out Mackenzie Gas Project hearings.
Liepert and federal Natural Resources Minister Joe Oliver said in a joint release the ministers established a “shared vision for Canada as a recognized global leader in secure and sustainable energy supply,” although the final communiqué made no reference to an “energy strategy.”
The ministers identified areas of possible collaboration as regulatory reform, energy efficiency, energy information and awareness and new markets/international trade.
They plan to review progress at a conference scheduled for Sept. 9-11, 2012.
Liepert said he believed the governments were “all on board” in setting some basic principles, goals and objectives.
Oliver also said he believes the energy ministers can ultimately agree on how major projects, such as pipelines and natural gas liquefaction and export facilities, aimed at developing energy markets get approved.
He called for reduced duplication between governments through a “one-project, one-review” process, arguing “you don’t undermine regulatory independence by putting time frames on decisions.”
CAPP: ‘positive step’
The Canadian Association of Petroleum Producers rated the energy ministers’ conference as a “positive step” toward advancing an energy strategy that would result in “increasingly sustainable hydrocarbon production and renewable energy.”
CAPP also emphasized that, regardless of the important role of governments, any strategy must be “grounded in a fundamental view that market forces are the key determinant in decisions on energy supply, transportation and use, both domestically and in Canada’s trading relationships.”
It said a strategy should put its emphasis on fiscal and regulatory competitiveness to grow production, the role of technology and innovation to improve environmental performance and cost-competitiveness across the full spectrum of supply and use.
Canada West Foundation President Roger Gibbins said that although he was disappointed that the communiqué used only “softer language” rather than referring to a national energy strategy, “most of the components” of a strategy were contained in the statement.
At the premiers’ conference, newly elected Clark was less than eager to back Oliver’s endorsement of the Northern Gateway pipeline to take advantage of China’s rising hunger for energy.
Although the final decision on a pipeline rests largely with the National Energy Board, Clark said only that she would await the outcome of an environmental review.
She said British Columbia and Canada need to be thinking about ways to increase exports and maximize job-creation opportunities.
But she also noted that the West Coast belongs to both British Columbia and Canada and needs to be protected.
—Gary Park
