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The Globe and Mail

U.S. Speaker Pelosi a willing listener in crucial oil-sands talks

Fresh out of a lengthy dinner discussion about Canada's controversial oil sands with the third-most powerful politician in America, Alberta Premier Ed Stelmach had a quick assessment of how it went: "Better than I thought."

The meeting of Mr. Stelmach, two other premiers and two federal cabinet ministers with Nancy Pelosi, the Speaker of the U.S. House of Representatives, came at a critical time in the energy trading relationship between the two countries. Washington is considering approval of the massive cross-border Keystone XL pipeline project, while looming mid-term elections have placed Ms. Pelosi and the rest of President Barack Obama's Democrats under domestic pressure from environmentalists to reduce the country's dependence on the oil sands.

The premiers' session, which ran well over its scheduled time, was the first of three Ms. Pelosi has set up to learn about Canada's energy industry - most prominently the oil sands. The leaders discussed few specifics, but all praised the progress of the dinner meeting.

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In an interview Wednesday night, Mr. Stelmach said that while he might have expected to be grilled by Ms. Pelosi, a bona fide environmentalist, she instead came to listen to his pitch about Alberta's oil sands and the province's efforts to mitigate carbon emissions. However, environmental critics - who will meet with the Speaker Thursday - claim such efforts fall well short of their goals, and Mr. Stelmach took the meeting after the release of two recent studies showing his government has under-reported both river pollution and bird deaths in the oil sands.

But Ms. Pelosi didn't ask about that.

"I thought that they might have pushed back on any of the information we imparted on the Speaker, but she said: 'Hey, I'm here to listen. We want to get both sides of the story,'" Mr. Stelmach told The Globe and Mail. "Boy, after today, I'm excited."

In a statement, Ms. Pelosi spoke in equally positive tones about the meeting.

"Tonight's discussion confirmed that the United States and Canada share a strong commitment to addressing climate change and energy security. We share much more than a border, and with respect to our energy future, we are in the same boat," she said. "Our discussion focused on more than the oil sands issue; we discussed the need for aggressive research and development on renewable energy and conservation technology. Our mutual clean energy goals will drive innovation and create millions of jobs on both sides of the border."

The meeting discussed Quebec's hydro-electric capacity, the United States' efforts to reduce its dependence on coal (much of which is bought from Saskatchewan), and Canadian innovations in the field of carbon capture and storage, an unproven but promising method to reduce the emissions footprint of oil sands development.

However, the sides dealt with few specifics. Saskatchewan Premier Brad Wall told The Globe and Mail there was "no specific signal on Keystone [the proposed pipeline]or generally on oil sands developing." Nevertheless, "it was a very engaging discussion and that's why it went as long as it did. And I think that also bodes well," Mr. Wall said.

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The sides also loosely discussed developing a benchmark of what an acceptable carbon footprint for the lucrative industry might be - something the Alberta premier referred to as "certainty" about the industry's future.

"In order to get that certainty, both countries have to get together to work on the targets. Saskatchewan and Alberta said we'll meet those targets and exceed them," Mr. Stelmach told The Globe.

U.S. ambassador to Ottawa David Jacobson played host to the dinner at his Ottawa residence. It began at 7 p.m. local time and ended just before 10 p.m. One of his predecessors said a successful dinner may help counteract campaigns by environmentalists and win Washington's support for continued oil sands development.

"The arguments that have been made in the U.S. are either misrepresenting facts or flat out distorting facts," said Gordon Giffin, a former U.S. ambassador to Ottawa and current director of energy giant Canadian Natural Resources Ltd. "This will get her focused and she will hear straight from all interested parties in Canada. [It]will enhance the dialogue in the U.S. because the challenge is lack of information. And the more informed she is, the better the debate is."

The meeting was perhaps most crucial for Mr. Stelmach, whose province includes the vast majority of the oil sands and is largely the reason Canada has become the top supplier of oil to the United States, ahead of countries such as Saudi Arabia. Mr. Stelmach had never before met with the Speaker, though his province's economy relies squarely on U.S. energy consumers. In 2008, the U.S. bought $79.5-billion in energy from Alberta - a staggering 72 per cent of the province's total exports in all industries.

Both Mr. Stelmach and Mr. Wall said they urged Ms. Pelosi to consider the economic impacts when weighing calls from environmental groups to avoid the oil sands. The Speaker and Congressman Edward Markey, himself an outspoken environmentalist who also attended the dinner, received a letter from 26 environmental groups Wednesday urging them to reconsider "the very serious consequences of reliance on Canadian tar sands oil."

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Quebec Premier Jean Charest, federal Natural Resources Minister Christian Paradis and Environment Minister Jim Prentice were also in the meeting.

It's possible the meeting could influence the U.S. government's decisions regarding the Keystone pipeline, as well as the reopening of a pipeline belonging to Calgary-based Enbridge that leaked oil into a Michigan river in July. Ms. Pelosi is a close ally of Mr. Obama, as is Mr. Jacobson, the ambassador who organized this week's meetings.

However, Mr. Obama and Ms. Pelosi's Democrats are at risk of losing control of the House in this fall's midterm elections, in which case Ms. Pelosi would no longer be the Speaker. She's also facing a challenge in her own district in California - a state that itself produces heavy oil with a carbon footprint equal to that from open-pit oil sands mining, according to figures cited by both the oil industry and environmentalists.

Mr. Wall, whose province's conventional oil exports to the U.S. totalled $6.4-billion in 2009, said the meetings "went very well."

He acknowledged Canadian environmental standards aren't where they need to be, but said more progress is being made in Canada than anywhere else. And he said Canada could just as easily sell its energy to Asia if the U.S. doesn't want it and pledged to make it clear to Ms. Pelosi that the Canadian energy sector supports U.S. jobs.

He relayed all points to Ms. Pelosi Wednesday, Mr. Wall said.

"I felt genuine engagement on the part of our friends and guests. They're knowledgeable, have done their homework, and are sincerely interested in hearing the rest of the story," Mr. Wall said, adding that despite Asia's interest, "our number one priority is a good relationship with our top trading partner," the United States.

The meeting came nine days after the release of a damning peer-reviewed study by a University of Alberta scientist that found a host of toxins in the Athabasca River, which runs through the oil sands, that flied in the face of long-standing claims by Mr. Stelmach's government. It came two days after another study, which was also peer-reviewed, estimated that the number of birds dying in Alberta's tailings ponds (settling basins key to the oil sands mining process, which the industry is trying to phase out) were dozens of times greater than those reported by the industry. (Alberta's top wildlife biologist immediately dismissed the peer-reviewed study's estimates as "unknowable" numbers.)

In a statement sent to reporters late Wednesday evening, Mr. Stelmach acknowledged that while "development of the oil sands has its challenges," he had a "open and candid" discussion with Ms. Pelosi and "impressed upon her that Alberta is taking the necessary steps to balance energy security with environmental responsibility and economic growth." He is scheduled to comment further Thursday morning in Calgary.

Ms. Pelosi scheduled the three oil sands crash course meetings while in Ottawa formally for the G8 Speakers' conference. The final two will include environmentalists, first nations leaders and industry leaders, and are scheduled to take place at the U.S. embassy Thursday morning. The environmental studies released recently in Alberta will almost certainly be cited in those meetings.

Mr. Giffin, the former ambassador, said the meetings are a chance to counter the allegations that the oil sands are the dirtiest oil on earth - instead, its impact is roughly equal to heavy oil sources from Mexico, Venezuela and Nigeria, which are the competing sources. It's a chance to persuade Ms. Pelosi of the advantage to sourcing oil from a friendly nation, he said.

In their meetings Thursday, environmental advocates will point to Alberta's projected increase in greenhouse gas emissions. Four groups have been invited - the Pembina Institute, the David Suzuki Foundation, Environmental Defence, and Climate Action Network Canada. Only the latter two of those groups, however, signed the environmentalist letter Ms. Pelosi received Wednesday. The Pembina Institute and the Suzuki Foundation, which are perceived as more moderate, did not. Both oppose unmitigated continued expansion of the oil sands and plan to say so to Ms. Pelosi.

"We do not want to see Alberta get in the way of Canada achieving its new national [emissions reduction]target," said Marlo Raynolds, executive director of the Calgary-based Pembina Institute.

Ms. Pelosi will also hear from first nations leaders, including Allan Adam, Chief of the Athabasca Chipewyan First Nation, in one meeting Thursday. Another will include five leaders of Canada's energy sector, whose companies are collectively worth more than $100-billion.

With a report from Shawn McCarthy

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