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Why a national energy strategy makes sense

Syncrude's oil sands plant north at Mildred Lake north of Fort McMurray, Alta.

Kevin Van Paassen/The Globe and Mail/Kevin Van Paassen/The Globe and Mail

Ask oil industry proponents about the need for a national energy strategy and they'll invariably raise the ill-fated Mackenzie Valley Pipeline.

If Western Canada is going to increase production of oil sands crude and unconventional natural gas as much as anticipated by the industry, it will need significant additional pipeline capacity to reach new markets in the United States and Asia.

But oil and gas companies - and the Alberta government - dread the prospect of pipeline proposals getting bogged down in a regulatory quagmire that includes dealing with unsettled First Nations' land claims in British Columbia.

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They point to the long-proposed Mackenzie Valley project, where the social and environmental assessment dragged on for years - hundreds of permits are still pending - while the commercial case for the pipeline evaporated with the shale gas revolution in North America.

As federal and provincial governments attempt to forge a national approach to energy, one area of focus will be regulatory efficiency, with Alberta proposing that Ottawa have a single body responsible for the reviews and that it place strict time limits on deliberations.

When they meet in Kananaskis, Alta., next week, federal, provincial and territorial energy ministers expect to reach agreement on basic principles that would guide a national strategy. Those include lofty notions about the need to produce energy in an environmentally and socially sustainable fashion, to use it efficiently, and to be leaders in the global shift to a low-carbon energy future.

Businesses are looking for practical measures. Whether it's an oil company eager to expand export markets, an electricity producer aiming to sell in a neighbouring province, or a clean-tech company commercializing innovative technology, they want consistent and supportive government policies that will clear away existing barriers.

Federal Natural Resources Minister Joe Oliver says Ottawa endorses the need for Canada to expand its reach to new energy markets, but industry officials say that acknowledgement needs to have greater force.

"Right now, we don't have a policy directive on what the national interest looks like on energy and the environment, and that's important," said Brenda Kenny, president of the Canadian Energy Pipeline Association. Such a directive would make clear to regulators such as the National Energy Board that the government wants oil and natural gas pipelines built to the West Coast to secure access to Asian markets.

Such a policy would tilt the regulatory playing field toward approval of projects such as Enbridge Inc.'s $5.5-billion Northern Gateway pipeline, which is facing opposition from environmentalists and native communities.

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Ms. Kenny said Ottawa should also impose time limits on the regulators' reviews of proposed projects. While such federal action does not require a national energy strategy, she said governments should be providing a clear framework for specific actions, including new deadlines for regulators.

Roger Gibbins, president of the Canada West Foundation, will address the ministers next week. He said he does not expect them to produce a detailed strategy document, but to agree on broad principles and, over time, a specific set of policy directives that will have a real impact on energy investment.

Mr. Gibbins said Prime Minister Stephen Harper must take action because issues such as environmental reviews and First Nations involvement fall outside the energy ministers' ambit.

"The issues are too broad to be segmented into departmental responsibilities," he said. "There has to be some aspirational leadership from the Prime Minister. I think that is almost unavoidable."

The ministers will also hear from representatives of non-government organizations that are urging governments to embrace and provide support for the transition to cleaner energy.

"We certainly won't be an energy superpower if we're just thinking about business as usual," said Merran Smith, director of the energy initiative at the non-profit group Tides Canada. Ms. Smith will address the ministerial meeting.

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About the Author
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More

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