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Major push needed to get oil to Pacific markets: Prentice

Jim Prentice

Adrian Wyld/The Canadian Press

Canada faces a half-decade of extraordinary effort if it is to send oil and gas to new Pacific markets, an imperative that will require drafting broad new environmental laws and reshaping federal relations with first nations, especially in British Columbia's disputed territory.

Much of the debate over the Northern Gateway pipeline, the $6.6-billion project that would export oil sands crude to Asia and California, has involved pipeline-builder Enbridge Inc., and its ability to navigate the troubled environmental and first nations waters it is seeking to cross.

But in a speech before the Vancouver Board of Trade Thursday, Jim Prentice, the former Conservative cabinet minister, lays much of the responsibility at Ottawa's feet.

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"The federal government needs to take the lead. They need to consult. They need to negotiate," he said. "Developing pipeline corridors to the Pacific requires much more than money. Leadership, patience and time need to be invested."

Northern Gateway, and the broader thrust for Canada to use energy exports to profit from the "Asian century," has become the single greatest economic imperative for Canada, Mr. Prentice said.

"I don't think it is an option for Canada to not have a Pacific energy corridor, or West Coast access for our hydrocarbons," he said in an interview. "The energy industry is one of the driving engines of the Canadian economy."

But he also acknowledged it may be the single thorniest issue the country faces, one that will require a political response far beyond the three-year regulatory review of Gateway currently under way with the National Energy Board.

Gateway faces a wall of opposition from groups that don't want Alberta crude crossing B.C., and don't want tankers sailing through the province's pristine and often stormy waters. Many of them are first nations who have a century-long history of unresolved land claims, and Ottawa needs to "step up" its efforts to consult and negotiate with those groups, Mr. Prentice said. Senior negotiators are needed on the file to press through creative, but tricky solutions.

"Energy corridors will need to be secured on a non-derogation basis, allowing for development, without forcing first nations to relinquish unresolved issues," he said.

He also called on lawmakers to engage, laying out a blueprint for a new "ocean management regime" that would involve Ottawa, the B.C. government and first nations. Such a scheme could examine bonding requirements for vessels, navigation and safety requirements and the responsibilities of various levels of government.

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It would be a sweeping piece of work, that would address "how we're going to deal with and protect ourselves from any environmental occurrences on the west coast – and what would be the plans put in place if something was to ever happen," he said.

There is little doubt that such legislation would be difficult to craft, although Mr. Prentice said there remains sufficient time to do so ahead of Gateway's startup in 2017. "There's reason to be concerned, but I'm not advocating that anyone be panicked about this," he said. "This can be done in an orderly way."

Indeed, rushing review of Gateway – or any of the issues facing it – is a dangerous path, he warned: "If it is forced, rushed or arbitrarily constrained, it will not withstand either public or judicial scrutiny."

He offered a thinly veiled jab at the Harper government, which has been vocal in its criticism of a regulatory review process that, various ministers have suggested, takes too long and is open to "hijacking" by environmental "radicals." Gateway's NEB review "needs to be conducted at arm's length with all of the players receiving a proper hearing," Mr. Prentice said.

Mr. Prentice now serves as vice-chairman at Canadian Imperial Bank of Commerce.

In an e-mailed statement, Jan O'Driscoll, spokesman for Aboriginal Affairs Minister John Duncan, said the government "will ensure that first nations are heard on resource projects."

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But, he made clear the government sees advantages to approving new projects. "There are potentially transformative economic benefits for these communities, including jobs and equity in the project," he wrote. "This could make a positive difference for these communities."

Indeed, it seems clear that shepherding new environmental laws would require a change in course for a government that has put much of its energy into paring back regulation. A major thrust for Environment Minister Peter Kent, who has declared himself a "strategic partner" of the oil sands industry, has been stripping away duplication and red tape in major industrial approvals. With regard to marine regulation, in particular, he boasted to a Calgary oil patch audience in January about the government's moves to trim "the regulatory burden under the Navigable Waters Protection Act."

The Harper government also came under fire last fall from environmental groups after pulling funding for the Pacific North Coast Integrated Management Area, an ocean management regime Ottawa said needed to be "realigned."

Environmental critics of the Gateway plan also disagreed with the argument that West Coast energy exports are central to Canada's national interest.

Gateway "is not nation-building. It's a nightmare," said Eric Swanson, a campaigner with the Victoria-based Dogwood Initiative. He called the project "a liquidation tube to send our resources away as fast as possible. That doesn't mean it's in everybody's interest."

Indeed, he argued, many B.C. first nations are less interested in negotiations than overthrowing the project.

Mr. Prentice, however, drew a parallel between opening Asian energy exports and construction of the Canadian Pacific Railway, "Canada's first great nation-building infrastructure project," that "was subject to intense scrutiny and stoked public debate and controversy, as is the nature of developments that hold the potential to change the fortunes of a nation."

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