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Russell K. Girling, President & CEO of TransCanada meets with the Globe and Mail editorial board on May 13 2014. TransCanada Corp. chief executive officer Russ Girling said Wednesday that Canada faces fundamental choices about the future of the country’s economy, including questions around aboriginal relations, resource extraction and pipeline development.

Fred Lum/The Globe and Mail

Canada's push to become a global resource powerhouse is at risk of failing unless government leaders take action to resolve the many conflicts holding up key projects, the head of the company behind the Keystone pipeline says.

TransCanada Corp. chief executive officer Russ Girling said Wednesday that Canada faces fundamental choices about the future of the country's economy, including questions around aboriginal relations, resource extraction and pipeline development.

Those issues have pitted industry against opponents, transforming once-staid pipeline hearings into a forum for oil sands critics. Meanwhile, infrastructure projects are shouldering long-standing aboriginal grievances with the federal government, Mr. Girling said in a meeting with The Globe and Mail's editorial board.

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"We've got to quit the little bickering that goes on between us and get to the bigger picture and let the institutions that we charge with managing the public good get on with doing their job," he said.

His comments point to the growing frustration in the energy sector as Alberta's oil patch braces for an extended slump due to the dramatic plunge in crude prices.

Governments are torn as they weigh resource development against local concerns, involving everything from greenhouse gas emissions to marine life and oil-tanker safety. "They're responding to public sentiment," Mr. Girling said, but "at some point, you've got to lead."

The country faces a fundamental question: "As Canadians, I think that we should be screaming right now, saying, just a second, are we a resource-based nation or not," Mr. Girling said.

Prime Minister Stephen Harper has touted Canada as an emerging "energy superpower." But the rhetoric is now clashing with tumbling oil prices and economic reality: Several large pipeline projects designed to pump crude to overseas markets have ground to a standstill amid legal challenges and deep-seated opposition from environmentalists and some aboriginal groups. Meanwhile, the commodity rout has crimped government revenues and forced some of the world's largest energy firms to abandon billions of dollars worth of new projects.

Other major projects are facing uncertainty due to regulatory snags. Malaysia's Petronas last year postponed a final investment decision on a natural gas-export terminal for the Pacific coast, jeopardizing as much as $36-billion in investment. And Enbridge Inc.'s Northern Gateway pipeline faces widespread opposition despite having been approved by government and regulators, subject to conditions.

TransCanada's proposed $8-billion (U.S.) Keystone XL is facing higher costs and the potential for further delays despite intensifying U.S. political pressure to approve the project.

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Mr. Girling said the Calgary-based company's sunk costs for the pipeline have escalated dramatically and that he has no idea when it will see the light of day.

"We're at $3-billion now on this project and I'd like to say I know where it's going to come to an end, but I really don't," he said.

The proposed Alberta-to-Texas conduit, designed to funnel up to 830,000 barrels a day of mainly oil sands crude to U.S. Gulf Coast refineries, was thrust into the spotlight again this week after the U.S. Environmental Protection Agency said the pipeline's impact on the environment should be revisited in light of falling oil prices.

TransCanada has long maintained that rising oil sands production does not hinge on construction of a single pipeline. Mr. Girling reiterated that view, pointing to the pending startup of several large expansions in the sector.

"You're not going to see any of them [reduce] crude-oil production," he said.

But he warned of possible delays to the company's proposed $12-billion (Canadian) Energy East pipeline. The project would pump more than one million barrels of oil a day as far as Canada's Atlantic coast starting in 2018, giving oil sands companies long-sought access to richer global markets.

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It has already encountered push back in Quebec over potential impacts on Beluga whale calving grounds at the site of a planned export terminal.

"This is going to be, unfortunately, a slower process than we had hoped," he said.

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