Canadian premiers near environmental deal to clear pipeline projects

By JOSH WINGROVE
Bloomberg

Canada’s premiers are nearing a deal aimed at clearing a path for pipeline projects in exchange for new environmental commitments, such as potential pledges to cut greenhouse gas emissions, people familiar with the talks say.

A draft of the agreement known as the Canadian Energy Strategy is circulating among bureaucrats and expected to be presented to premiers in the next few months, said the officials, who spoke on condition of anonymity because the discussions aren’t public.

The push for a Canadian Energy Strategy began with oil-producing Alberta in 2011 and has grown to include all 13 provinces and territories. Several officials said a deal is possible by July.

“I’m very optimistic, and there’s many reasons to be optimistic,” New Brunswick Premier Brian Gallant, one of four co-leaders of the talks, said when asked if a July announcement is expected.

The agreement is aimed at bridging a divide between provinces such as Alberta, which is pressing for the approval of pipeline projects, and provinces such as Ontario and Quebec who want the country to be more aggressive on emissions-reduction targets and regulations. Provinces are specifically considering whether to include emissions reduction targets, officials said.

If they do, the premiers would move ahead where Canadian Prime Minister Stephen Harper has not. Provinces have wide jurisdiction over environmental standards and emissions, while the federal government has jurisdiction over major energy projects that cross provincial borders, such as pipelines. A Harper spokesman declined comment.

Climate Fight

Environmental concerns and inter-provincial disputes have delayed or underpinned opposition to pipeline projects including TransCanada’s Keystone XL and Energy East, Enbridge’s Northern Gateway and Kinder Morgan’s Trans Mountain expansion. British Columbia, for instance, announced five conditions it wanted met before it backed Gateway.

A Canadian Energy Strategy was initially designed to avoid arbitrary or lengthy barriers for proposals. Quebec was the final province to join talks, and did so last year under the condition action on climate change be a part of the Energy Strategy.

“Provinces and territories are going to work together,” Quebec Environment Minister David Heurtel said in an interview. “It’s clear that sub-national states are playing a bigger and bigger role in the fight against climate change.”

Emissions Limits

Ontario Premier Kathleen Wynne said a Canadian Energy Strategy deal could lead to further talk of carbon taxes or a cap-and-trade system for emissions.

“I feel very optimistic, given the conversations I’ve been having with both the premier of Quebec and the premier of Alberta, that we’re going to be able to land on a Canadian Energy Strategy,” Wynne said in an interview in Toronto. “There’s a lot the provinces can do.”

The provinces are moving to seal an agreement ahead of the United Nations Climate Change Conference in Paris in December. Countries “ready to do so” were invited by the UN to submit emissions-reduction plans by March 31, ahead of Paris. Harper’s government has avoided committing to that date.

Canada will submit its emissions plans “well in advance” of the summit after consulting with provinces, Ted Laking, a spokesman for Environment Minister Leona Aglukkaq, said in an e-mail. “Canada wants to ensure it has the most complete picture of provincial and territorial plans possible before submitting.”

‘Step Up’

Aglukkaq didn’t specifically answer a question in a January parliamentary session from lawmaker and Green Party leader Elizabeth May about whether Canada would meet the March 31 submission date.

Two emissions plans, known as “intended nationally determined contribution” or INDC documents, have been submitted to the UN thus far. One of them was from the European Union, whose member states pledged to cut domestic emissions by 40% by 2030, compared to 1990 levels.

“The industrialized world is expected to step up to the plate,” May said. “We’re on the verge of a deadline of a treaty Stephen Harper has claimed he wants to see -- one that is comprehensive, includes all nations -- and we are continuing to be unhelpful.”

In the 2009 Copenhagen Accord, Canada pledged to cut emissions to 611 megatons by 2020, down from 2005 levels of 736 MT, according to government figures. Environment Canada figures show the country is on pace to churn out 727 MT in 2020, well short of the Copenhagen goal. Canada’s emissions are also projected to grow over the next five years, with most of the growth coming from the oil and gas sector -- leaving environmentalists warning new pipelines will speed crude production and emissions alike.

Missing Targets

Provinces have previously set their own emissions targets, and are almost all on pace to miss them. Alberta, home of the oil sands, is the fourth-largest province by population and the nation’s top emitter, and those emissions are forecast to increase as oil production grows.

Harper’s government promised oil and gas regulations in 2006. They haven’t yet been introduced. He said recently Canada won’t move on broader rules until the US does, and that it would be “crazy” to do so as the price of oil remains low.

The federal government, through meetings of energy ministers, has worked to streamline inter-provincial energy projects -- chiefly, moving to a “one project, one review” system for pipelines and other projects.

‘Maximizing Benefits’

An energy strategy would help provinces develop resources, a spokesman for federal Natural Resources Minister Greg Rickford said in an e-mailed statement. Regular meetings and talks are “essential to maximizing the benefits to Canadians and the Canadian economy,” the spokesman said.

Premiers say more needs to be done to take action on matters of energy and environment.

“We as a nation need to have a much more up-front conversation about what we need to do collectively about climate change,” said Gallant. New Brunswick would receive oil through the proposed Energy East pipeline. “We have a very good starting point where everybody again has reiterated their support for us to develop such a strategy.”

Former Alberta Premier Alison Redford called for a strategy in 2011, and co-led a working group established in 2012. Talks have progressed now because premiers involved “are much more open to compromises,” one person familiar with talks said, specifically citing the current Alberta Premier, Jim Prentice. “The dynamic around the table is completely different than it was two years ago,” the person said.

Deal Signal

One potential milestone comes next month, when Quebec Premier Philippe Couillard is hosting his own summit. Progress there could signal an energy deal is close.

A major hurdle is whether to include specific commitments by provinces to reduce emissions -- some are for it and others against, one official familiar with the talks said.

Another sticking point may whether leaders will commit to rules for pipelines that cross their territory. “Everybody wants to be masters of their own domain,” Bob McLeod, premier of the resource-rich Northwest Territories, said in an interview. “They don’t want other provinces imposing their demands.”

Wild Card

Election timing poses another risk. Oil-producing Newfoundland “could be the wild card” with an election upcoming, said one official familiar with talks. Alberta is also reviewing its climate strategy and carbon tax in the run up to an anticipated spring vote.

Ontario, which is weighing whether to join Quebec and California in a cap-and-trade deal, is pushing for the Canadian Energy Strategy to include access to renewable and affordable clean energy, one person familiar with the talks said. New Brunswick is reviewing its own climate strategy. “We’re looking at everything,” Gallant said.

Negotiations over pipelines and energy must accompany climate change discussions because “the two are intertwined,” Quebec’s Heurtel said. “This will be the first time that we have a pan-Canadian discussion on these issues,” he said.

McLeod, the Northwest Territories premier, expects a strategy by fall with an update in July. Any final strategy needs to help get oil and gas to market, he said. “As long as the strategy allows for that, we’ll support it,” he said.

No Response

In an e-mailed statement, a spokeswoman for Newfoundland, another oil-producer and co-leader of the talks, said “further work has to be done,” but the province’s leaders “look forward to a timely completion of the strategy.”

Prentice will attend the Quebec summit next month, Heurtel said, although a spokeswoman for the Alberta premier said nothing is confirmed. His attendance “would send quite a signal” of progress and raise hopes a deal is near, one person familiar with talks said.

Quebec’s Heurtel said he asked the federal government for its collaboration in drafting documents for the Paris climate conference. He’s still waiting for a response, he said.

“We want the federal government to bring concrete measures to the table to reduce greenhouse gas emissions,” Heurtel said.

British Columbia Premier Christy Clark spoke recently in Ottawa about provincial efforts to cut emissions.

“When we go to Paris, provincial governments are going to lead that conversation -- because it’s us that did it,” she said, later dismissing a question of what the federal government should do.

“That’s up to them,” she said. “Economic growth and environmental impact are inextricably linked. Those two areas of policy should properly, primarily rest with provincial governments.”

• Most Read
• Most Commented