Ottawa targets pipeline red tape
SHAWN MCCARTHY
http://www.theglobeandmail.com/servlet/story/LAC.20070723.RLUNN23/TPStor...
July 23, 2007
OTTAWA -- Natural Resources Minister Gary Lunn says he'll press his American counterpart when they meet today to ensure speedy regulatory review of the major pipeline projects needed to carry growing volumes of oil sands crude to U.S. markets.
Mr. Lunn will host U.S. Energy Secretary Samuel Bodman and Mexican Energy Secretary Georgina Kessel Martinez in Victoria this morning for talks in advance of the three national leaders meeting next month near Ottawa.
In a telephone interview, the minister said the trilateral session will focus on measures to improve the working of the continental energy market.
These would include joint efforts to co-ordinate regulatory oversight, develop cleaner energy supplies and improve efficiency.
Mr. Lunn said he hopes to persuade his colleagues to adopt a North American standard for electronic appliances like televisions and VCRs that would require dramatically reduced energy consumption when they are in shutdown mode.
(Televisions, computers, and chargers all consume considerable energy when they are turned off.)
The ministers will also discuss how the three countries might co-operate on the development of clean coal technology, and on developing technologies to capture carbon dioxide emissions from coal-fired power plants and refineries and sequester the greenhouse gas in underground storage.
In discussions with Mr. Bodman, Mr. Lunn will talk about various planned pipeline projects that will add as much as one million barrels per day of capacity by 2010, and are essential to ensure there are markets for the vast expansion of oil sands production under way.
"We need to look at the regulatory approval process to make sure it is done as quickly and efficiently as possible," Mr. Lunn said, "while at the same time, ensuring that environmental concerns and other issues are addressed."
Amid dire warnings of a looming energy crunch and of growing reliance on the Middle East and countries of the former Soviet Union, U.S. government and energy officials are eager to see oil sands production grow as rapidly as possible.
ConocoPhillips Co. chairman Jim Mulva said last week the company is eyeing an expansion of the planned pipeline network down to the Gulf Coast, and a refurbishment of its refineries there so they can process oil sands bitumen.
The Houston-based company has already partnered with Calgary's EnCana Corp. to expand oil sands production and is spending more than $5-billion (U.S.) on two U.S. refineries to handle the tarry oil sands crude.
But industry officials worry that regulatory process, which involves the U.S. State Department and several individual states as well as Canadian governments, could prove to be a serious logjam.
David MacInnis, president of the Canadian Energy Pipeline Association in Calgary, said his members would like the federal government to seek assurances that the State Department is properly funded and has adequate staff to oversee an increase in its regulatory role. And they want Ottawa to encourage Washington to require its federal department to do joint reviews with the various state regulators.
Mr. Lunn would not discuss specifics of the U.S. jurisdictional issues. But he said the Americans are just as eager as their Canadian counterparts to streamline the process and get the additional crude oil supplies flowing.
Both sides want to speed up the regulatory review of such projects, he said.
In fact, that U.S. appetite for Canadian energy has provoked a backlash among Canadian nationalists and anti-free-trade forces, who are mobilizing to protest next month's leaders' meeting.
Groups like the Council of Canadians and Alberta's Parkland Institute argue the so-called Security and Prosperity Partnership agenda - which includes broader security and trade initiatives - is a secretive effort aimed at deepening continental integration and robbing Canada of control over its resources.
But on the energy front, Canada committed to a continental market long ago - in the Canada-U.S. free-trade agreement, and the North American free-trade deal.
Now, governments are essentially dealing with plumbing, looking to clear regulatory blockages and market failures that impede the flow of north-south energy trade, while working together on regulatory standards and research and development.
Canada has as much to gain from a well-functioning market as the energy-hungry Americans do, Mr. Lunn said.
"We want to ensure there is greater access to their markets," he said. "We export close to $100-billion of energy a year, which is a huge boost to our economy. This helps Canadian sovereignty."
