On energy policy, where’s the leader?

A ‘National Energy Program’ won’t fly, but Canada needs a comprehensive plan on development and distribution of its resources

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by L. IAN MacDONALD
The Gazette, Wednesday, July 25, 2012

In any discussion of energy policy in Canada, words are important.

No one is more aware of this semantic sensitivity than Canada’s premiers, who will have energy as the main agenda item at their annual Council of the Federation meeting beginning Wednesday in Halifax.

For example, no one in his or her right mind would propose a “national energy program.” More than 30 years after Pierre Trudeau’s disastrous NEP, the mere mention of it still raises hackles in the West.

Well then, what about a “national energy strategy” for the development, distribution and diversification of Canada’s abundant energy resources?

That doesn’t fly either – not in Quebec, anyway. In the rest of Canada, “national” means coast to coast, but in Quebec “national” ends at the Ottawa River.

So what about a “Canadian energy strategy?” Better, but not quite, since it can be construed in Quebec as a federal initiative to the exclusion of the provinces.

All right then, how about a “pan-Canadian energy strategy,” including all the provinces and territories?

Aha! The eureka moment.

Whatever it’s called, it’s high time it happened.

After all, we have 170 billion barrels of oil in the ground, the world’s third-largest proven reserves, as well as trillions of cubic feet of natural gas, and abundant undeveloped capacity in hydroelectricity and other renewables such as wind and solar, not to mention coal, uranium and other commodities such as potash, all of which the world wants.

Canada’s natural-resource riches are such that energy exports last year were $94 billion, or 23 per cent of all our exports – by far the largest segment of our international trade. But 90 per cent of all our energy exports, and 99 per cent of our oil and gas exports, go the U.S., which buys it at a significant discount. There’s an obvious need to diversify and develop new markets, especially the fast-growing Asia-Pacific region.

China, projected to be the world’s largest economy within two decades, has already invested heavily in the Alberta oilsands. Just this week a Chinese state-owned enterprise announced the $15-billion acquisition of Nexen, a Calgary oil producer. Not to put too fine a point on it, but if the Americans don’t want bitumen from the oilsands – a possibility that has been raised by the Obama administration’s delay of approval for the Keystone XL pipeline – the Chinese will buy everything we can send them.

The problem is getting it there in an environmentally sustainable manner, with the First Nations as partners rather than opponents in transportation routes such as Enbridge’s proposed $6-billion Northern Gateway pipeline from the oilsands to the West Coast at Kitimat – a proposal that still does not have the political blessing of the B.C. government.

Even if the pipeline is approved after regulatory hearings that can drag on for years, the environmental and First Nations issues would still be a daunting obstacle. There are 45 First Nations along the proposed route, and while some support taking an equity and employment role, they are far less vocal than are the opponents of the project.

Nothing prevents the construction of new pipelines to Eastern Canada, where there is also refining capacity, or even reversing east-west flows as Enbridge has said it may do on one of its routes. Neither is there a shortage of world-class ports, such as Montreal, Quebec and Halifax.

But this is only one issue in a much larger dialogue and dance involving the provinces and Ottawa. The provinces own the natural resources, while the environment is a mixed jurisdiction, Ottawa has the final word in the resource-rich northern territories and aboriginal matters, and the feds are also in charge of international trade.

What it comes down to, in a word, is leadership, an attribute that has been notably lacking in our federal-provincial affairs.

Enter Alison Redford, the new premier of Alberta, the most articulate and persuasive advocate since Peter Lougheed of Alberta’s dual role of promoting its economic interest within a Canadian context.

As she has pointed out about the shared opportunities of Alberta’s wealth: “We stand together or we fall together. There is no other way.”

Redford is one of five premiers to watch in Halifax, the others being Brad Wall of Saskatchewan, Dalton McGuinty of Ontario, Jean Charest of Quebec and Nova Scotia’s Darrell Dexter, the host.

The stars may be aligning. Wall, like Redford, sees his newly wealthy province playing a larger role on the Canadian stage. McGuinty, after meeting Redford last week, pulled back from his brain cramp of last spring about the Canadian dollar, Dutch disease and Alberta prospering at Ontario’s expense, when it’s well known that Ontario stands to gain $55 billion in economic activity from the oilsands over 25 years.

Charest is now the ranking premier, the Council was his brainchild in the 2003 Quebec election, and he is a week away from dropping the writ for what will be his last election campaign. He could use a game-changer on interprovincial relations, a win for Quebec within Canada.

His colleagues, being politicians first and foremost, understand about elections. Redford, who has just been through one where she stood conventional wisdom on its head, knows this best of all.

 
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