Prentice Says Canada Should Look Beyond Obama on Climate

Canada should wait to negotiate a continental accord on climate change until the next U.S. president takes office, Canadian Imperial Bank of Commerce Vice Chairman Jim Prentice said.

Uncertainty over U.S. approval of TransCanada Corp. (TRP)’s Keystone XL pipeline has become an “irritant” between the two countries, Prentice said today in the prepared text of a speech he’s giving in Ottawa. The next window to change the “core fundamentals” of the relationship will come in 2017, when President Barack Obama’s successor takes office, he said.

“Our opportunity to engage the U.S. will come,” said Prentice, who was a senior cabinet minister in Prime Minister Stephen Harper’s government until 2010. “When it does, we need to be ready. We need to work with the Americans to achieve an accord relating to climate change and the oil sands.”

Emissions from Alberta’s oil sands have become a focal point for those apposed to Keystone, which would carry bitumen to Gulf Coast refineries. Opponents like billionaire Tom Steyer say the line would encourage companies to exploit the world’s third-largest crude reserves, unlocking vast amounts of carbon and accelerating climate change.

TransCanada first applied to build Keystone XL in September 2008. Producers are counting on the project to help ease a transportation bottleneck and raise the price of Canada’s heavy crude, which averaged $24.50 a barrel lower than the main U.S. benchmark last year.

Continental Regime

Harper has resisted pressure to introduce rules to reduce greenhouse gas emissions by the nation’s oil and gas sector. In an interview with Bloomberg News in January, the prime minister said his government would prefer to develop a North American regulatory regime with the U.S., a position echoed by Alberta Premier Alison Redford this month.

Obama said in June the U.S. wouldn’t approve Keystone if it’s found to “significantly exacerbate the problem of carbon pollution.”

To give itself more leverage with the U.S. before 2017, Canada should move ahead “with pace and with purpose” in building Enbridge Inc. (ENB)’s Northern Gateway pipeline to the west coast and TransCanada’s Energy East route east, Prentice said. Harper’s cabinet must decide this year whether to approve Northern Gateway, designed to create an export hub to Asia.

Prentice said Canada must also build terminals in British Columbia to export liquefied natural gas, pursue “genuine engagement” with aboriginal groups and improve the country’s environmental performance.

“In a world concerned about carbon, Canada will either be an environmental leader or have other jurisdictions dictate our environmental policies,” he said. “If you doubted this before, surely your eyes have been opened by the U.S. administration’s sustained focus on the scope of greenhouse gas emissions created by oil sands production.”

To contact the reporter on this story: Andrew Mayeda in Ottawa at amayeda@bloomberg.net

To contact the editor responsible for this story: Paul Badertscher at pbadertscher@bloomberg.net

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