Oilsands play big role in Redford's 'national energy strategy'

Alberta Premier Alison Redford nominated herself to champion the herculean task of spearheading a Canadian energy strategy, but on the eve of the annual summer premiers conference in Halifax, the B.C. government has made her undertaking that much more difficult.  

Yesterday's announcement by B.C.'s ministers of the environment and aboriginal affairs sent a message to Alberta that Enbridge's Northern Gateway pipeline will have to overcome environmental and financial hurdles before the provincial government will allow the project to proceed.

That's a big problem for Redford. Especially if you believe that her energy strategy is really all about getting Alberta oilsands bitumen to market.  

Larry Hughes, an engineering professor at Dalhousie University in Halifax, would like to think that the energy strategy is about energy security: giving energy poor regions of the country guaranteed access to the resources of energy rich regions. 

"It all really comes down to one three-letter word and that's oil," says Hughes. "And to be fair to Premier Redford, that's really what she's pushing."

The simplified theory goes something like this: Alberta is landlocked. It has some of the biggest oil reserves in the world in the oilsands. The oilsands have a bad reputation as a dirty fuel. Plus, there is only one customer for the product at the moment: refineries in the U.S.  

Redford needs pipelines to the West Coast and the East Coast, not just to the Gulf coast. That will help her diversify her markets and get a better price for Alberta crude.

She also has to get all the premiers onside when it comes to bitumen's bad name. Ideally, she'd like every province to put its support behind the resource. If some can't, she would at least like them not to slag it in public.  

Canada an energy warehouse

Hughes's assessment of the energy strategy is pretty common, but David Sawyer wishes it wasn't.  

"If the conversation is about oilsands, then we're in deep trouble," says the vice-president of energy and environment at the International Institute for Sustainable Development.  

The energy strategy should encompass two big ideas, according to Sawyer.

The first is that Canada is an energy warehouse. "[The energy strategy] is not just about market access. You know, punching pipelines to the south and to the west. A true national energy strategy recognizes the diversity of Canada's energy [resources]," says Sawyer.

That means Alberta oil but also Saskatchewan and Newfoundland oil, B.C. and Nova Scotia natural gas, Saskatchewan uranium, green energy and electricity in Ontario and hydro from Manitoba, Quebec, and Labrador, as well as B.C.

Even the Senate's energy and environment committee acknowledged the complex nature of Canada's energy resources in a report released last week calling for a national energy strategy. Among its recommendations was an endorsement for hydraulic fracturing – or fracking – for natural gas in Quebec and New Brunswick.  

When you paint the energy picture using this more diverse palette the idea of a Canadian energy strategy starts to get a lot more complicated. And that's where Sawyer's second idea comes in.

Dialogue, not documents

He thinks the energy strategy shouldn't be a document set in stone that every premier signs on to. There are just too many moving parts.  

Instead, the strategy should be a political process. It should be a constant dialogue between provincial governments. Sawyer doesn't see much leadership from Ottawa, and for the most part, resources are a provincial jurisdiction.

"The brawling that's going on over the pipeline development is a good indicator of this hands-off approach," he points out. 

A national energy dialogue is probably a good place to include First Nations, as well. Without aboriginal support, a resource project like Northern Gateway is nearly impossible to build.  

The premiers will begin their talks this week by sitting down with aboriginal leaders who are likely to echo this point. A report from the Canadian Council of Chief Executives, also released last week, emphasized the need for provinces to help bring aboriginal partners to the table.

Low-carbon alternatives

Federal indifference isn't the only reason for pipeline fights. Those battles have just as much to do with environmental concerns.  

"Anything that comes out of a [Canadian] energy strategy, is it actually going to have the greenhouse gas issue at its core or is it going to be on the periphery?" asks Ed Whittingham, executive director of the Calgary-based environmental think-tank The Pembina Institute.  

He's worried that in all the talk of energy security and diversification of markets, a transition to a low-carbon economy is going to be lost.  

"If I had my druthers, [the energy strategy] would put the transition to a low-carbon economy at the forefront," says Whittingham.

Last week, a coalition of more than 700 industry, environmental and aboriginal groups released an energy strategy plan that focused on renewable energy sources: what they callied a "clean energy accord." 

Pembina has long been on the record as being in favour of oilsands development, noting it is an immense source of income for the country.

But in Pembina's opinion, that money should be used to invest in a green energy future for Canada.

Shorter-term benefits in fossil fuels  

David Collyer, the president of the Canadian Association of Petroleum Producers, is fine with that vision. But he'll leave the energy future decisions to the provincial and federal governments.  

"I certainly would not condition or, in any other way, limit the growth of oilsands based on the pace at which that transition would occur," he says.  

For the time being, Collyer sees nothing but strong demand for the nation's fossil fuel products. He said it makes good business sense to keep developing and marketing the oilsands resource.  

Collyer is adamant that the national energy strategy is not all about bringing Canadian oil to market even though that idea is being pushed by the Alberta premier.

But he does have this to say to those opposed to the oilsands:  "Think about the scenario where that revenue opportunity is not available. If we don't continue to grow oil and gas, and oilsands in particular, what is the impact of that on the availability of revenues for a variety of uses? You know, health care, education, transition to a low-carbon economy, whatever."  

Even though Dalhousie's Hughes admits he sounds like a heretic, he agrees with Collyer.  

"We need western Canadian crude," he says.