Alberta can no longer rely on the United States to snap up nearly all the province's oil exports and will instead do more to open up trading lanes with Asia, provincial leaders say.
The province plans to strike its first Asia advisory council while pushing for both increased rail capacity and a controversial pipeline project to bring its energy resources to Canada's West Coast - accessible to China, India, Japan and South Korea.
But the announcements (championed by a lame-duck Premier and included in the Throne Speech that kicked off the province's brief spring legislative session on Tuesday) may have been meant as much for Alberta's current top client, the United States, as for new would-be buyers.
U.S. legislators are considering projects and regulations that could block or limit some of the export of Alberta's oil sands bitumen, which requires extensive processing to convert to conventional oil.
Premier Ed Stelmach's government needs another option if North American demand slows, although the United States remains a preferable market for the province, observers say.
"We're now seeing the increased politicization of energy exports to the U.S. So, I think the symbolism [of the Throne Speech]is both a signal to our Asian trading partners and a signal to the United States as well," said Mike Percy, dean of the University of Alberta's school of business.
While Asian markets are growing quickly, they prefer decades-long deals to obtain raw materials - not refined crude - at low prices, which could be an undesirable scenario for Alberta, said Michal C. Moore, a University of Calgary professor of energy economics.
"If this market really were to open up, we run a risk of locking ourselves into low value-added products for a long, long time. And that's not a way to diversify your economy," he said, adding that, in such a case, "the province isn't necessarily better off."
Alberta business leaders are largely supportive of wooing Asia, as the oil sands already draw extensive investment from the region. "We have to start thinking about a two-way flow - capital comes in, goods come out," said Dick Gusella, chairman and chief executive officer of Connacher Oil and Gas.
The new Asia advisory council will be created by Bill 1 of the legislative session, a purely ceremonial move. It builds on Alberta's "New West Partnership," a coalition with Saskatchewan and British Columbia meant to open up the provinces' access to Asia.
"A major opportunity exists to expand trade and investment with Asia. This region is home to most of the world's largest and most diverse economies," Alberta Lieutenant Governor Donald Ethell said in presenting his first Throne Speech.
The Western provinces have "the products these markets need "and will "underpin Canada's economy in the 21st century," he said.
The vanguard of any move to bring oil and gas to the West Coast is Enbridge's proposed Northern Gateway Pipeline, which is largely outside Alberta jurisdiction and would run from Edmonton to Kitimat, B.C. Several First Nation groups (Greenpeace counts more than 60) oppose the pipeline project. Another pipeline company and Canada's two rail lines are pursuing similar projects.
"They want to push the pipelines to the West Coast - I think that's what it [the Throne Speech]signals, regardless of environmental concerns or aboriginal concerns or in fact community concerns," Alberta New Democrat leader Brian Mason said.
The speech also reiterated Alberta's opposition to a federal plan for a national securities regulator.
The province said it is still "challenging the unprecedented attempt by the federal government to take control of this area of provincial jurisdiction," adding that "unwarranted" criticism of the current model simply serves to "undermine the confidence in capital markets that the federal government says it is trying to protect."
The speech begins what will be an unusual session. Mr. Stelmach and Liberal Leader David Swann are both stepping down this year, and races to replace them have begun. Cabinet ministers seeking the leadership have stepped down, leaving the province with rookie finance and justice ministers.
The session will last for about two months and the government is expected to introduce only a handful of bills. The opposition has questioned what, if anything, the spring session will accomplish.
The provincial budget is set to be tabled on Thursday, and is expected to draw heavily from a savings fund to avoid deep cuts to services and infrastructure projects.