A new federal energy committee and a renewed strategy for a continental energy relationship with the United States will accelerate increased resource activity in Canada’s north, say Calgary’s energy leaders following a visit by Prime Minister Jean Chretien.
In town on Friday to speak to about 500 members of the the Canadian Association of Petroleum Producers, Chretien delivered an upbeat message emphasizing federal support for open and competitive markets for Canada’s vast oil and natural gas reserves.
“Our government’s approach to all of these exciting energy opportunities will be governed by an . . . unswerving commitment to competitive markets and fair regulation,” said Chretien.
He added developing Canadian natural gas reserves in the Northwest Territories and the McKenzie Delta and bringing it south as soon as possible is a high priority. He vowed that a Canada-U.S. energy relationship will benefit both consumers and producers without sacrificing domestic energy needs or Canadian sovereignty.
The prime minister’s remarks were “music to our ears,” said CAPP chairman Raymond Woods, who is Shell Canada Ltd.’s senior operating officer, resources.
“The time frame for development of reserves in the north is impossible to estimate definitively, but we would broadly expect that sometime before the end of this decade is quite reasonable,” he added. “Let’s get on with it at the front end. I think some of the regulatory challenges that we will come across as we go down that path, we’ll have to encounter in a co-operative way. If we’re able to do that, that will accelerate the end date.”
But Alberta Energy Minister Murray Smith said CAPP members at his table felt the speech was thin on details. “Where’s the beef, where’s the Alberta beef? There was a consensus at the table that there wasn’t much content,” said Smith.
When asked what a new energy deal with the U.S. could mean for Alberta, Smith replied: “Billions, in terms of new investment. Money creates jobs,” he added.
“I think this continental energy program for North America is one where we have to be very vigilant on so we get maximum development of a non-renewable resource.”
Former Alberta premier Peter Lougheed said the timing of Chretien’s address was “exceptionally significant.”
“This country is going to have to be right on our toes when we get these proposals from the United States on continental energy. And that’s what it really is — continental energy,” Lougheed remarked following Chretien’s speech.
The new energy committee, chaired by Foreign Affairs Minister John Manley, and including western cabinet ministers Anne McLellan and Ralph Goodale, will co-ordinate the work required at the federal level to ensure Canada takes full advantage of available opportunities, said Chretien.
“The potential is enormous,” Chretien told CAPP members. “We have worked with you to develop a fiscal regime that has seen additional investments of $50 billion announced for the next 10 years. And we will continue to work together with you to maintain a positive investment climate.”
Meanwhile, CAPP unveiled a new report on oil and natural gas strategies for North American energy markets in response to a request from Washington for input into a U.S. energy policy development task force.
“There is real interest in learning more about the industry,” added CAPP president Pierre Alvarez.
“They are interested in learning, and knowing what are the steps that can be put into place to make things go even faster. We have been very pleased with the reception of our position both in Washington and in Ottawa.”
The CAPP report calls for a renewed energy strategy to support the development of North America’s untapped oil and natural gas resources, as well as additional infrastructure needed to bring these supplies to market. It also notes the increasing interdependence of global economies and notes policies need to be consistent with the operation of free markets and open competition.
CAPP chairman Raymond Woods says oil and natural gas trade between Canada and the U.S. is currently working well, with market forces driving decision-making and producers and consumers benefiting from competitive pricing.
Among the paper’s recommendations:
* Building on and enhancing the successes in energy trade;
* Recognizing resource development in North America as a priority, and reforming regulatory practices to facilitate response, market-driven resource activity;
* Ensuring competitive tax and royalty regimes for the energy industry;
* Ensuring consistent environment policies with the goal of maintaining current high standards of protection.
Reacting to the U.S. withdrawal from the Kyoto process, Woods said industry still recognizes the climate-change issue as serious.
“I don’t think very much will change in the short term,” said Woods. “When I look at my own company, and other companies in the oilpatch, many of us have already adopted emission-reduction strategies and targets for the short term and medium term, perhaps as a spinoff of the Kyoto initiative.
“I don’t think you’ll see any reversal in activity. But there will be an ongoing, constructive engagement by CAPP with the government and others on how we move that policy issue forward.”
CAPP represents 150 companies who produce about 95 per cent of Canada’s natural gas and crude oil, and 120 associate members who provide upstream services to the industry.
