The tumultuous approval processes for the Gateway and Keystone XL pipelines highlight two glaring problems with the federal government’s approach to energy policy.
First, Canada’s oil and gas industry is extremely vulnerable because it relies almost entirely on a single export market, the U.S., for both these products. And, because of breakthroughs in extractive technology, the U.S. is projected to be self-sufficient in gas and possibly in oil in as little as 10 to 20 years.
Moreover, because our products are locked into North American markets, they are currently selling at prices considerably below international market prices.
These economic realities are placing huge pressure on Canadian energy players to build the pipelines required to access the diversified foreign markets that are critical to replacing the U.S. market.
Second, it has become clear that large energy infrastructure projects are only going to be built if the public accords them the social licence, that is, the permission to build them. To earn that, Canadian industry and governments must show real credibility on the environment — on climate change, oilsands reclamation, water quality and pipeline safety. In particular, Canada needs to show significant greenhouse gas reductions if we are ever going to get the social licence required to build projects and sell our products.
Yet the federal government has been missing in action and, in some cases, actually undermining efforts to earn this social licence for energy initiatives. As hard as it is to understand, the government has launched an unprecedented, counterproductive cutback of environmental protections. Given that one of the greatest concerns about the Gateway pipeline is offshore spills, why would the government close the emergency spills office in Vancouver?
Similarly, how does it help to attack powerful U.S. foundations that fund environmental groups, when environmental credibility is at the heart of the failure to secure approval for the Keystone pipeline to the U.S.?
What message does it send about Canada’s commitment to environmental responsibility when the government guts the environmental review process, disbands the National Round-table on the Economy and the Environment, and shuts down the world-renown Experimental Lakes Area, which does research critical to fixing the water problems associated with the oilsands?
The federal government has also failed to provide the national leadership required to facilitate projects of the magnitude of these pipelines. The Conservatives can blame Premiers Christy Clark and Alison Redford as they bicker over the Gateway pipeline, but these premiers are simply representing the interests of their provinces.
Isn’t Prime Minister Stephen Harper supposed to represent the national interest? If so, why would he refuse the invitation to meet with Clark and Redford? Why would he also refuse to meet with the Council of the Federation — all the premiers — despite being invited to their November meeting to discuss national energy strategy? And why, when asked on a Calgary talk show what Premier Redford means when she talks about a national energy strategy, would Harper answer that he has no idea? If he really doesn’t know, couldn’t he just pick up the phone and ask her?
Moreover, the federal government has failed in its duty to consult with Aboriginal Peoples, a key reason why, in the estimation of Jim Prentice, a former senior Conservative minister, the Gateway project is stalled.
The Conservatives argue that the Keystone pipeline is a “no-brainer,” that the U.S. should buy our oil to replace the unethical and insecure oil they buy from questionable sources. Incredibly, the Atlantic Provinces and Quebec get their oil from the same insecure and unethical sources.
Yet, the federal Conservatives have shown no leadership on a west-to-east pipeline that could provide energy security for the eastern provinces and create another market for western Canadian oil.
They argue they will never subsidize such a pipeline. But without doing more than taking the industry’s word on the economics of this pipeline, how do they know it would take subsidies? Maybe it would just take leadership to do a comprehensive study of the economics of the project, as well as the mobilization of stakeholders.
Changing energy economics requires new pipelines and possibly other infrastructure to diversify Canada’s export markets. But before that can be accomplished, the federal Conservatives need to solve the social licence challenge. Despite the urgency in all of this, they’ve failed to understand this new reality, and they’ve failed to provide the national leadership so critical to dealing with it.
Original Article
Source: edmontonjournal.com
Author: Grant Mitchell
First, Canada’s oil and gas industry is extremely vulnerable because it relies almost entirely on a single export market, the U.S., for both these products. And, because of breakthroughs in extractive technology, the U.S. is projected to be self-sufficient in gas and possibly in oil in as little as 10 to 20 years.
Moreover, because our products are locked into North American markets, they are currently selling at prices considerably below international market prices.
These economic realities are placing huge pressure on Canadian energy players to build the pipelines required to access the diversified foreign markets that are critical to replacing the U.S. market.
Second, it has become clear that large energy infrastructure projects are only going to be built if the public accords them the social licence, that is, the permission to build them. To earn that, Canadian industry and governments must show real credibility on the environment — on climate change, oilsands reclamation, water quality and pipeline safety. In particular, Canada needs to show significant greenhouse gas reductions if we are ever going to get the social licence required to build projects and sell our products.
Yet the federal government has been missing in action and, in some cases, actually undermining efforts to earn this social licence for energy initiatives. As hard as it is to understand, the government has launched an unprecedented, counterproductive cutback of environmental protections. Given that one of the greatest concerns about the Gateway pipeline is offshore spills, why would the government close the emergency spills office in Vancouver?
Similarly, how does it help to attack powerful U.S. foundations that fund environmental groups, when environmental credibility is at the heart of the failure to secure approval for the Keystone pipeline to the U.S.?
What message does it send about Canada’s commitment to environmental responsibility when the government guts the environmental review process, disbands the National Round-table on the Economy and the Environment, and shuts down the world-renown Experimental Lakes Area, which does research critical to fixing the water problems associated with the oilsands?
The federal government has also failed to provide the national leadership required to facilitate projects of the magnitude of these pipelines. The Conservatives can blame Premiers Christy Clark and Alison Redford as they bicker over the Gateway pipeline, but these premiers are simply representing the interests of their provinces.
Isn’t Prime Minister Stephen Harper supposed to represent the national interest? If so, why would he refuse the invitation to meet with Clark and Redford? Why would he also refuse to meet with the Council of the Federation — all the premiers — despite being invited to their November meeting to discuss national energy strategy? And why, when asked on a Calgary talk show what Premier Redford means when she talks about a national energy strategy, would Harper answer that he has no idea? If he really doesn’t know, couldn’t he just pick up the phone and ask her?
Moreover, the federal government has failed in its duty to consult with Aboriginal Peoples, a key reason why, in the estimation of Jim Prentice, a former senior Conservative minister, the Gateway project is stalled.
The Conservatives argue that the Keystone pipeline is a “no-brainer,” that the U.S. should buy our oil to replace the unethical and insecure oil they buy from questionable sources. Incredibly, the Atlantic Provinces and Quebec get their oil from the same insecure and unethical sources.
Yet, the federal Conservatives have shown no leadership on a west-to-east pipeline that could provide energy security for the eastern provinces and create another market for western Canadian oil.
They argue they will never subsidize such a pipeline. But without doing more than taking the industry’s word on the economics of this pipeline, how do they know it would take subsidies? Maybe it would just take leadership to do a comprehensive study of the economics of the project, as well as the mobilization of stakeholders.
Changing energy economics requires new pipelines and possibly other infrastructure to diversify Canada’s export markets. But before that can be accomplished, the federal Conservatives need to solve the social licence challenge. Despite the urgency in all of this, they’ve failed to understand this new reality, and they’ve failed to provide the national leadership so critical to dealing with it.
Original Article
Source: edmontonjournal.com
Author: Grant Mitchell
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