A New Democratic Party government would do a better job gaining public acceptance for infrastructure projects like new pipelines because it would enforce a more credible environmental review process, Mulcair said in an interview at Bloomberg’s headquarters in New York.
“I’m claiming that the NDP would be better for anybody who wants to develop any natural resources because we would put in place, and we’d maintain and we’d enforce a credible, thorough assessment process,” Mulcair said. “You want to get people onside if you want to move product to market. That’s what’s missing.”
Producers are encouraging new pipeline construction to carry bitumen from oil sands deposits to coastal refineries and overseas markets, relieving a glut of supply that has constrained Canadian prices. Conservative Prime Minister Stephen Harper has called the creation of new energy infrastructure a national priority, and oil-rich Alberta has blamed the low price of crude for depressing royalty revenue and keeping Canada’s wealthiest province per-capita in deficit.
The price of Western Canada Select, the benchmark heavy crude exported from Alberta to the U.S., reached a record discount below the price of U.S. West Texas Intermediate oil last year amid uncertainty over the prospect for Keystone, Northern Gateway and Kinder Morgan Energy Partners LP (KMP)’s proposal to expand its Trans Mountain pipeline that ends at the Pacific Ocean near Vancouver.
“All of a sudden you are talking about quintupling the number of heavy tankers in that water,” Mulcair said. Harper “will never get the public onside for that.”
Mulcair, a former Quebec environment minister who was elected NDP leader a year ago, said he agrees the country needs to diversify markets for its energy, adding Canada should build a pipeline to ship oil from Western Canada to the east.
Exports make up about a third of the world’s 11th-largest economy, with about three-quarters of all shipments headed for the U.S.
Harper has taken steps to speed up and simplify environmental reviews for major energy and mining projects, including imposing hard deadlines on reviews, consolidating agencies that conduct reviews and forgoing federal reviews for smaller projects, angering environmental groups.
“This is a process that is set up to fail,” Mulcair said. “There is no credible process in place to get the public onside.”
Mulcair faces an uphill battle to convince the oil industry that its interests are aligned with environmentalists, said John Stephenson, senior vice president and portfolio manager at First Asset Investment Management Inc. in Toronto.
“The big obstacle to infrastructure is the environmental movement, so I don’t know how you square the circle,” Stephenson, who helps oversee C$2.7 billion ($2.6 billion) and manages shares in Canada’s largest oil producers and pipeline companies, including Suncor Energy Inc. (SU), TransCanada and Enbridge, said in a telephone interview.
Mulcair gave the interview one day after speaking to the Woodrow Wilson Center in Washington about building a “balanced, sustainable economy in North America.” His remarks drew a rebuke from Alberta Premier Alison Redford, who said “it is truly unfortunate the federal NDP continues to put politics ahead of fact, betraying the economic interests of all Canadians.”
“Their comments are exactly the opposite of what we need,” Redford said in an e-mailed statement.
Canada’s regulatory body, the National Energy Board, has been holding hearings on Enbridge’s proposed Northern Gateway, which would move crude from Alberta’s oil sands to Kitimat, British Columbia on the West Coast where it can be shipped to Asia. Environmental and aboriginal groups say the project will increase the risk of an oil spill off the coast. The panel has said it plans to complete the review by the end of this year.
About 34 percent of British Columbians in an October Angus Reid poll of 800 respondents said they completely opposed Northern Gateway and another 23 percent said they are opposed but could change their minds, according to a statement on the polling company’s website.
Canada is awaiting a U.S. decision on whether to approve the Keystone pipeline, designed to carry 830,000 barrels of crude a day to Gulf Coast refineries.
While he wouldn’t have made Keystone a priority, Mulcair said it’s up to the U.S. to make a decision in its own interest.
Mulcair also said Harper’s Conservatives have hurt the nation’s economy by not requiring companies to absorb the environmental costs of their operations. “Failure to enforce existing environmental legislation had meant that there was an artificially high number of U.S. dollars flowing into the Canadian economy, pushing the dollar artificially high,” Mulcair said.
Canada’s dollar has gained 44 percent over the past decade versus its U.S. counterpart, the fifth-most among 16 major currencies tracked by Bloomberg.
Bank of Canada Governor Mark Carney, who is stepping down June 1 to head the Bank of England a month later, has rejected Mulcair’s assertions about the currency and investment, calling it a “caricature” that would limit development of the oil sands.
Mulcair, the second oldest of 10 children, was born in Ottawa and raised in Laval, Quebec, just north of Montreal. He holds a law degree from that city’s McGill University. He replaced Jack Layton, who died from cancer only months before leading the party to the best election result in its 50-year history, largely due to a breakthrough in Quebec, where they won 59 of the province’s 75 districts. The next election is scheduled for 2015.
To contact the reporter on this story: Theophilos Argitis in Ottawa at firstname.lastname@example.org
To contact the editor responsible for this story: Christopher Wellisz at email@example.com;