Alberta, Ottawa at odds over oilsands exports to China
By Jason Fekete , Calgary Herald June 22, 2010
Ottawa has maintained it will prohibit bitumen shipments to countries like China — with lax climate-change policies — which seems counterintuitive to Alberta Premier Ed Stelmach's stance, who has said China and the rest of Asia are critical to the province’s energy future.
CALGARY — The federal and Alberta governments are mired in a sticky oilsands battle over exporting the resource, with Ottawa maintaining it will prohibit bitumen shipments to countries like China with lax climate-change policies.
Prime Minister Stephen Harper made the surprise policy announcement during a 2008 federal election stop in Calgary — a pledge that would stonewall the Stelmach government's plans to ship Alberta oilsands to China through the proposed Northern Gateway pipeline to Kitimat, B.C., and then by tanker to Asia.
Harper said his government would halt the flow of unprocessed oilsands and jobs to countries with greenhouse-gas emission standards weaker than Canada's, with China thought to be in the crosshairs. The policy was to take effect in January 2010, although it would only apply to new export deals and existing contracts.
This week, federal Environment Minister Jim Prentice, a Calgary MP, said the Conservative government is holding to its promise and expects Alberta to follow Ottawa's lead.
The lucrative resource and associated jobs shouldn't be fleeing Canada if it means a loss of investment dollars to countries that are environmental laggards, he said.
"We are bringing into place very responsible carbon reduction policies and we don't want to see a situation where we lose Canadian jobs, lose investments in Canada," Prentice said in an interview.
"This would be a classic case of carbon leakage where another country has lower standards and therefore you leak your jobs and investment to another jurisdiction," he added. "We've been quite adamant about that and continue to be adamant about it."
Ottawa's reaffirmation of its bitumen policy comes as top Chinese leaders land in Canada this week for the G20 summit in Toronto, but also at a time when the communist country is pumping billions into the oilsands.
China has made three major ventures into the oilsands since last fall, with the China Investment Corp., Sinopec and PetroChina all buying stakes in the resource, the second largest proven oil reserves in the world next to Saudi Arabia.
Premier Ed Stelmach, who travelled to China last month as part of a trade mission to expand provincial markets, has said China and the rest of Asia are critical to Alberta's energy future. Currently, Alberta only exports its oilsands to the United States.
The premier wasn't available for comment on Tuesday.
The $5.5-billion Northern Gateway project could open new markets for Canadian crude, but it faces heated opposition from aboriginal and environmental groups worried about a potential spill on land or sea. The pipeline is currently being reviewed by the National Energy Board and could be operational by 2016.
The policy manoeuvre — thought by some analysts to be an environmental olive branch to other regions of Canada — could put Ottawa and Alberta on a constitutional collision course.
"It seemed to come out of the blue. It wasn't clear where it was coming from and why the prime minister made it," said Roger Gibbins, president of the Canada West Foundation, a Calgary-based think-tank.
"When the prime minister weighed in, it didn't seem to be a thoughtful or considered move."