Trudeau’s Energy Boss Turns to Electricity After Oil Decisions

  • Jim Carr ‘proud’ of Kinder Morgan, Enbridge pipeline approvals
  • Canada now seeks new transmission lines to replace coal, gas

It was a tumultuous autumn for Jim Carr.

Canada’s pipeline point man was a key player in decisions by Prime Minister Justin Trudeau’s government to approve a major liquefied natural gas project in September and a pair of crude-oil proposals from Kinder Morgan Inc. and Enbridge Inc. last month, preceded by a string of regulatory and environmental concessions to quell opposition.

That cleared the deck for Carr, Canada’s minister of natural resources. Now preparing for President-elect Donald Trump’s administration with Rick Perry as his U.S. counterpart, Carr, 65, is shifting his attention in 2017 to two fresh endeavors: overhauling the country’s National Energy Board and pushing for new transmission lines, potentially funded by both government and pension funds.

An advisory panel will submit its recommendations on the NEB in May and the government will then go about rewriting Canada’s environmental review laws for major projects, Carr said. He also plans to champion a push to link provinces rich with green energy to those that instead burn coal or gas for electricity.

“The way you start approaching that possibility is by looking at ways in which provinces can cooperate,” he said in a recent interview at his Ottawa office. “That’s certainly a long term goal, and you begin long-term goals by taking short-term steps.”

Pipeline Approvals

Energy projects have been a major focus since Trudeau took power last year, as he seeks to stoke economic growth while satisfying pledges made to environmentalists and indigenous communities.

Last month, Carr and Environment Minister Catherine McKenna approved Kinder Morgan’s Trans Mountain pipeline along with Enbridge’s Line 3, while rejecting Enbridge’s Northern Gateway proposal. The only other major pipeline in front of Canadian regulators is TransCanada Corp.’s Energy East, which is in its early stages of review.

Conservative lawmakers, who governed from 2006 to 2015, criticized Carr for approving Trans Mountain, with its potential legal barriers, and not Northern Gateway. Nonetheless, Carr said he felt a sense of accomplishment for how government stick-handled the file.

“I’m proud of being able to approve major projects while respecting our climate change goals, and while meaningfully accommodating indigenous peoples,” said Carr. “We knew ultimately the decision we took had to be in the national interest, and our explanation for why had to be persuasive.”

Trump and Keystone

The presidential election has buoyed hopes for another major TransCanada proposal, the Keystone XL pipeline to the U.S. that the Obama administration rejected last year. Canadian approvals remain in place for the project, and Carr says it’s up to the company and U.S. government to decide whether to proceed.

Trump has appointed oilmen to key posts, including Rex Tillerson, the Exxon Mobil Corp. chief executive due to become Secretary of State, and Perry, the former Texas governor tapped to head the U.S. Energy Department. Carr demurred when asked about them.

“We’re very careful not to judge this administration on anything other than what they do. And what they do will become better known after January 20th” with the inauguration, he said. “I’m sure we will find areas of common cause.”

Hydro Power

Trudeau has rolled out a climate plan with provinces aimed at reducing emissions, in part by accelerating a phase-out of coal-fired electricity. It will leave gaps for coal-burning provinces as Canada pushes to generate 90 percent of its electricity from non-emitting sources, up from the current 80 percent.

Trudeau announced C$81.2 billion ($60 billion) in new infrastructure spending in November, along with the creation of a Canada Infrastructure Bank that’s expected to use government funds and leverage pension funds and other private-sector investment to build projects that drive growth and generate revenue. Clean electricity transmission is an obvious candidate.

The so-called Canadian Energy Strategy published by provincial premiers last year -- the culmination of an effort that Carr backed early on -- called for more cross-country transmission capability. The minister pledged federal input on that strategy, saying increased transmission capability would help in particular between British Columbia and Alberta, Saskatchewan and Manitoba and, finally, between Quebec and Atlantic Canada. “We see the elements of an east-west plan taking shape,” Carr said.

Kinder Controversy

The government’s Trans Mountain decision was its most controversial -- and will be the foremost test of Trudeau’s new approach to energy development. In the days that followed, Carr apologized after suggesting “defense forces” could be used if anti-pipeline protests turned violent.

Kinder Morgan’s pipeline could still be blocked. The company has to meet conditions attached to its approval, and a court ruling ultimately sank Northern Gateway. New challenges have already been filed against Trans Mountain and some indigenous communities continue to oppose it -- 20 percent of those along the route, according to a company estimate.

In the interview, Carr in particular praised Chief Maureen Thomas of the Tsleil-Waututh indigenous community near Vancouver, whose traditional territory sits where tankers will pick up crude from the pipeline. Thomas and the Tsleil-Waututh still oppose the project and are considering a court challenge. Carr said he learned greatly from Thomas, saying she emphasized the importance of environmental stewardship.

“So when I look back at the relationships that have been built and will continue to grow over time, when I look at the delicate balance these decisions require, I believe the decision was at the same time courageous and right for the country,” he said.

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