Firm Pledges Said to Be Missing in Canada Premiers’ Energy Plan

Canada’s premiers are nearing a final agreement on an energy plan that lacks firm commitments on pipelines or emissions control, after three years of talks kicked off when petrol-rich Alberta first proposed a strategy to unlock development of oil, hydro and other energy resources.

Leaders of the country’s provinces and territories will discuss and potentially finalize the Canadian Energy Strategy at a three-day meeting this week, according to government officials familiar with the negotiations who spoke on condition of anonymity because the discussions are private. The deal will list principles, and won’t help companies build pipelines any faster or provide firm new climate targets, the officials said.

The thrust of the agreement, which premiers began negotiating in 2012, has evolved since Alberta proposed it. Then-premier Alison Redford called for a pan-Canadian energy development strategy that focused on both oil and renewable energy development, in part aimed at boosting market access for Alberta crude. Oil-sands development was in the country’s best interest, she argued.

Greg Stringham, vice president of markets and oil sands at the Canadian Association of Petroleum Producers in Calgary, acknowledged the “flavor” of the strategy has evolved since 2012, and will now be a set of principles and not the “tactical plan” others had expected.

“It will be important for the provinces to come together and lay out what their umbrella strategy is,” he said by phone Monday. His message to provinces has been to “lay out a set of principles by which the provinces can put their own policies in place for the responsible development of our energy, and being able to move that energy to the markets that need it.”

Clarify Rules

The premiers will also discuss funding for health care, the Canada Pension Plan and infrastructure spending at the meeting, which begins Wednesday in Newfoundland and Labrador. All those issues, whether directly or through funding, involve the federal government, and the meeting comes three months before a federal election.

It was pipelines that were top of mind when the talks began amid persistent delays for TransCanada Corp.’s Keystone XL project, which left Alberta pushing projects within Canadian borders. Enbridge Inc.’s Northern Gateway, Kinder Morgan Inc.’s Trans Mountain and TransCanada’s Energy East all propose to carry Alberta crude to market and have faced regulatory delays, hindering the province’s push to sell its oil for closer to global benchmark prices. Western Canada Select has fetched $14 a barrel less than West Texas Intermediate on average over the past year.

Redford quit in 2014 and the strategy has continued with greater focus on climate change and clean energy, with Ontario Premier Kathleen Wynne taking the lead, officials said.

No Targets

The premiers have faced calls from environmentalists to avoid doing anything that could lead to expansion of the oil sands, both a key sector and driver of emissions growth in Canada. One government official said nothing in the strategy will help build Energy East, Trans Mountain or any other pipeline project.

The premiers will instead commit generally to having the “necessary pipelines” in place and expediting regulatory decisions, the Globe and Mail, citing a draft of the plan, reported Monday.

There are also no firm emissions targets or concrete climate pledges, officials said. It was the same story with a communique signed in April during a Quebec climate summit, where premiers committed to “a lower-carbon economy” and to implementing policies to cut emissions. Alberta, Canada’s heaviest emitter, was in an election campaign and not among those to sign.

‘Not Fussed’

Yet, any strategy that focuses on integrating energy development, environmental issues and other matters is welcome, said Brenda Kenny, president and chief executive officer of the Canadian Energy Pipeline Association, whose members include Enbridge, TransCanada and Kinder Morgan. Those three companies declined to comment.

“I’m not at all fussed that the strategy might or might not have any specific, binding outcomes,” Kenny said in an interview. “Those follow from a solid framework that recognizes you have to have an integrated strategy,” and the talks over an energy strategy, including environmental principles, have been “increasingly a very valid framework” for energy policy, she said.

Asked about the prospect of a provincial strategy, Chris McCluskey, a spokesman for Natural Resources Minister Greg Rickford, said the federal government’s Responsible Resource Development plan, which includes the “one project, one review” rule, “eliminated unnecessary duplication in the review system, while enhancing environmental protection and engagement of First Nations.”

Provincial Differences

A remaining hurdle for finalizing the strategy is said to be differences between Quebec and Newfoundland over power transmission, according to two officials.

Wynne, who said this year her province would create a cap-and-trade system to limit emissions, has regularly clashed with Canadian Prime Minister Stephen Harper over emissions policy and said last week a deal was close.

“We’re going to work to have a Canadian Energy Strategy in place very soon,” Wynne told reporters in Toronto last week. “That’s our objective. And my hope would be that out of that will come a much more rational engagement on this issue across the country.”

Discussions on the strategy will continue during this week’s meeting, said Naline Rampersad, a spokeswoman for Manitoba Premier Greg Selinger, one of four co-chairs developing the plan.

Attendance List

“Manitoba has always supported a Canadian energy strategy towards supporting Canada’s position as an energy superpower, strengthening Canada’s domestic energy linkages and security, and ensuring sustainable and responsible development of Canada’s energy resources,” Rampersad said in an e-mail.

Saskatchewan Premier Brad Wall, whose province is a major oil producer, said Monday he was pulling out of the first day of the conference, and may not attend Thursday and Friday as his province battles wildfires.

Among the attendees at the meeting will be Alberta Premier Rachel Notley, whose New Democrats won government in the province for the first time in May after campaigning on increasing corporate taxes, reviewing energy royalties and raising the minimum wage. Notley spokeswoman Cheryl Oates declined to comment.

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