Jim Prentice’s No. 1 challenge

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Canada has staked its future on the oil sands. In November, Report on Business magazine together with Thomson Reuters examine what that means both at home and abroad. Read more from the issue at tgam.ca/oil.

Sitting in a quiet office amid the jungle of oil and gas towers in downtown Calgary, Jim Prentice pauses before moving full throttle into a discussion about arguably the most intractable problem he faces as Alberta's new premier: access to new energy markets.

The province's 16th premier leans forward in his chair and clasps his hands: "We have become far too dependent on the Americans," he says in an exclusive interview. "They're our best friends, best allies and always will be but they can't be our only customer when it comes to energy. We've become a supplier of discounted energy products into a congested North American marketplace and that isn't working. We need to find a way to tidewater."

Yes, the elusive tidewater. Prentice was well aware of this dilemma before he was sworn in on September 15. He was aware of it in his capacity as federal minister of Indian affairs from 2006 to 2007, and later the environment. He certainly became acutely conscious of the challenge after he left federal politics in 2010 and consulted with First Nations along the Northern Gateway pipeline route on behalf of the project's proponent, Enbridge.

It's because of Prentice's background, and the high reputation he has among business and aboriginal leaders across Canada, that many are guardedly optimistic about his chances of finding a way to get a pipeline built to either the West or East Coast. Short term, the proposed Energy East pipeline to the Maritimes appears to have the best chance. There is far less opposition along the route and most of the premiers whose land the pipeline would cross seem to be onside.

But Alberta really wants the pipeline to the West Coast. It is salvation. It's the one that gets oil to China and other Asian markets quicker. It's the route in which the bigger profits are embedded. But it's also the most difficult politically. Opposition to the proposed Northern Gateway pipeline (with its terminus in Kitimat) and the Kinder Morgan pipeline (ending in Vancouver) is fierce.

Prentice made national headlines shortly after taking office when he suggested to The Globe and Mail that Enbridge consider a different end point for Northern Gateway, such as Prince Rupert or a site further north. He wasn't talking through his hat. He's spent many hours talking to Coastal First Nations and knows how solidly entrenched their views are about shipping oil from Kitimat in tankers that would have to navigate the ecologically sensitive (and sacred to some First Nations) waters of Douglas Channel.

Enbridge was not amused by the suggestion. It quickly stated that were no plans to reconsider the end point.

Still, company president Al Monaco is bullish on Prentice's chances of negotiating some kind of West Coast breakthrough. "He has a good perspective on all sides of the issue," said Monaco, between meetings recently in New York. "He's not just acquainted with the industry side. He also has an aptitude for bringing people together and being collaborative in trying to reach solutions."

Prentice, unlike his predecessors, has already shown he's prepared to speak some hard truths. For instance, he admits the province's environmental reputation, internationally, is terrible, and he plans to do something about that. In his office, the term "climate change" won't only be uttered through a cough. Still, he admits that carbon emissions from the oil sands will only go up in the next several years as oil output grows.

So Prentice will have to cut into those numbers other ways. He wants to speed up shutdowns of many of Alberta's coal-fired power plants, which generate more than 40 per cent of its electricity. He also has a climate change task force putting together a long-range plan (20 to 25 years) that includes reducing carbon emissions.

In another sign that Prentice plans to be hands-on with the energy file, he's taken on ministerial responsibility for First Nations, and international and intergovernmental relations. The energy sector applauded.

Despite all its wealth, Alberta faces an uncertain economic fu-ture. The Premier has said that if the province doesn't access tidewater for its oil by 2017, it will put Alberta and the entire country in a financial bind. And almost every day there are more stories about plunging oil prices and waning demand in Asia for energy.

Prentice has already begun to forge a strong partnership with B.C. Premier Christy Clark, who would no doubt welcome a less fractious relationship than she had with his predecessor, Alison Redford. Prentice says he's looking forward to his inaugural first ministers' meeting, where he'll undoubtedly get a warm reception. This is a good thing. Looking down the road, the Alberta Premier will need all the help and friendships he can get.