Time for a clear energy policy in Canada

Industry umbrella group puts pressure on Canadian governments to act in face of price-supply squeeze; wants coherent direction

Gary Park

Petroleum News Canadian Correspondent

A ghost from the past has resurfaced in Canada’s energy circles, only this time the specter is taking on a friendly form, as a broad coalition of producers, shippers and service providers calls for a national strategy to deal with soaring prices, tight supplies, climate change, labor shortages and the need for investment to develop new energy sources.

The Energy Dialogue Group, made up of 18 industry-related associations, said Canada’s federal government, 10 provinces and three territories need to start building a framework in conjunction with industry to tackle rapidly evolving conditions through a clear, coherent policy.

EDG chairman Michael Cleland said a clear sense of direction is vital if Canada is going to handle the pressures implicit in oil prices above US$60 per barrel.

It is also essential for Canada to be equipped to discuss its energy directions with the United States.

But Cleland conceded that talk of a national policy immediately raises fears of a second National Energy Program, like the 1980 policy imposed without consultation by the Canadian government to curb galloping oil prices and promote exploration and development of frontier regions by Canadian-based companies.

The end result was that U.S.-based companies fled south of the 49th parallel, thousands in the industry lost their jobs and the Alberta economy, in particular, was sent into a nosedive.

Cleland gave an assurance that the EDG has no thoughts of reviving the National Energy Program by encouraging governments to take over from the free market.

Four major topics

• Policies that are articulated, rather than implicit, so that politicians, not regulators, set priorities over competing societal values.

• A realistic climate change policy that is part of a broader energy framework.

• Better interaction on energy with Canada’s foreign partners.

• A better context for government programs on technology, efficiency and support for emerging energy sources.

• A more balanced approach to the public debate on energy, which the EDG believes is too focused on the environment and not enough on energy security and prosperity.

• A reaffirmation of a free market approach to encourage investment.

John Richels, president of Devon Energy and previously head of Devon Canada, made a case earlier in July for Canada and the United States to team up on a joint energy strategy that would enable the United States to improve its energy security while accelerating the development of the Alberta oil sands.

Paper will be presented in September

Cleland is not deterred by the fact that previous attempts to initiate action at the political level have fallen flat, because he believes governments can no longer ignore the impact of commodity prices and the squeeze on supplies.

He said there have been advances in the area of fiscal policy and commitments have been made to streamline regulatory processes, but the infrastructure needed to develop energy resources is lagging behind growth demand.

What Cleland hopes is that governments will be more open to a policy discussion with his coalition and stakeholders such as the Canadian Energy Efficiency Alliance, a group speaking for industrial energy users, and start to tackle the tough issues that stand in the way of developing a broad national consensus.

He argued that if energy had received the attention it deserved Canada could have avoided signing the Kyoto Protocol on climate change and would have been better prepared to make key decisions on gas pipelines from the North Slope and Mackenzie Delta.