Rickford Says Pipelines Need Aboriginal, Province Support

Canada must win support from its provinces and aboriginal groups if it hopes to construct the pipelines needed to unlock its oil reserves, Natural Resources Minister Greg Rickford said today.

“None of that can take place until we are in a position where we are working effectively with our provincial counterparts and with our First Nations communities to build confidence,” Rickford told reporters in Vancouver, where he spoke at a tanker-safety conference organized by the Musqueam First Nation.

Rickford is seeking to boost support for energy infrastructure ahead of the government’s decision this month on Enbridge Inc. (ENB)’s $6.5 billion Northern Gateway pipeline. Last month, Rickford said the government would take steps to prevent oil spills and open an office in British Columbia to advance talks with aboriginal groups, some of which say they haven’t been adequately consulted.

The comments today came after Finance Minister Joe Oliver said Canada’s crude reserves are “effectively landlocked” and the country needs buyers of its oil other than the U.S. The inability to move crude to the coast is costing Canada’s economy C$30 billion ($27.5 billion) a year, Oliver has said.

“We see, obviously, a strong need to look at getting our product to tidewater within Canada,” as well as through the Keystone XL pipeline, said Rickford, who took over the natural-resources portfolio from Oliver in March.

Prime Minister Stephen Harper’s government must decide by June 17 whether to approve Enbridge Inc.’s Northern Gateway pipeline, which would transport crude from Alberta’s oil sands to the coast of British Columbia.

Depressed Prices

While crude producers say the project is needed to ease a bottleneck that is depressing the price of Canadian heavy oil, the route has faced opposition from the B.C. government, environmentalists and aboriginal groups.

B.C. Premier Christy Clark has said her government will only back Northern Gateway if five conditions are met: completion of an environmental review, “world-leading” oil-spill response systems on water and land, adequate involvement of aboriginal groups, and the distribution of a “fair share” of the fiscal and economic benefits to her province.

A majority of British Columbians want the federal government to either delay or reject the pipeline, according to a Bloomberg-Nanos poll released this month.

Some aboriginal groups have threatened to use lawsuits and protests to stop the project.

Long Review

Rickford said he is still “quite positive” TransCanada Corp. (TRP)’s Keystone XL route will be approved. President Barack Obama said in April he was delaying a decision on the project, which would transport Canadian crude to Gulf Coast refineries, because of a court battle, extending a review now in its sixth year.

“Canadians need to understand the consequences of not moving our resources to tidewater,” Oliver said in a speech at a conference in Montreal today.

Diversifying the country’s crude exports away from the U.S., which bought 96.7 percent of Canadian shipments last year, is a “crucial strategic objective,” Oliver said. “Simply put, we need new customers.”

To contact the reporters on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net; Andrew Mayeda in Ottawa at amayeda@bloomberg.net

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

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