Shipping oil to Asia? The route’s east, not west – by Derek Burney and Eddie Goldenberg (Globe and Mail – December 13, 2011)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

The handling of the Keystone XL pipeline process by the Obama administration serves as a loud wake-up call for Canada. While America remains our most important market, Prime Minister Stephen Harper has said that Canada should not be a “captive supplier” of energy for the United States. In light of global demand growth, it’s also in Canada’s national interest for Ottawa to act decisively to enable our oil and gas industry to diversify its customer base.

The fast-growing markets in Asia, particularly China and India, are obvious targets, but they need the assurance that Canadian oil won’t be landlocked in Alberta. Federal and provincial governments must understand that the Chinese and Indians are not sitting idly by enjoying the spectacle of the interminable and uncertain Canadian regulatory process. They’re actively seeking long-term supplies from other producers around the globe.

Obviously, the best way to ship Canadian oil to Asia would be through West Coast ports. That’s the rationale both for the proposed Northern Gateway pipeline to Kitimat and for expanding the existing Trans Mountain pipeline system to B.C.’s Lower Mainland. But the longer the regulatory approval process drags out, the more likely it is that potential customers will go elsewhere.

There are, of course, environmental and aboriginal concerns that need to be addressed, but neither should be allowed to stymie legitimate, environmentally sound infrastructure development. Those who are fundamentally opposed to any expansion of oil sands development will never be satisfied. No process and no amount of consultation will reconcile their concerns.

Canada must do more to reduce carbon emissions from the oil sands; the federal government should work with Alberta to establish effective standards for the industry so that unconventional crude generates the same level of emissions as most conventional oil. We need a balanced action plan that enables greater production of a valuable resource as well as enhanced environmental standards that constrain our carbon footprint.

But if Canada doesn’t get its act together quickly, we’ll miss a historic economic opportunity. Without fresh direction, the current lengthy and uncertain regulatory process may torpedo the possibility of moving oil to the Pacific Coast.

For the rest of this column, please go to the Globe and Mail website: http://www.theglobeandmail.com/news/opinions/opinion/shipping-oil-to-asia-the-routes-east-not-west/article2268474/

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