Harper must show leadership on energy

Any look ahead at 2013 should begin with an obvious qualifier — expect the unexpected.

That said, if there’s one issue that looms large over Canada’s politics and economy, it’s energy. Energy in two main aspects.

First, energy policy as in the Canadian energy strategy, led by the provinces which own the natural resources of oil, gas and electric power. But Ottawa needs to lead in diversifying Canada’s energy exports, more than 99 per cent of which now go to the U.S. This is a big piece of trade and economic policy.

Then energy infrastructure — as in pipelines to transport oil and gas to export markets over routes acceptable to provinces, states and, not least, First Nations.

Enbridge’s Northern Gateway project to the west coast, and TransCanada’s Keystone XL pipeline to the Gulf of Mexico, are the two most prominent examples.

There are some 45 First Nations along the proposed Gateway route from Edmonton to Kitimat on the northern coast of British Columbia.

The aboriginal issue trumps all the others, including environmental concerns about leaks. If Enbridge can somehow orchestrate support among First Nations, the $5.5-billion pipeline will be built. If not, forget it.

So far, Enbridge has offered the affected First Nations communities a 10-percent equity stake worth $280 million over 30 years and another $400 million in jobs, training and procurement benefits over the three-year construction period of the twin pipeline.

But that won’t begin until completion of a regulatory review in which more than 4,000 parties have requested standing.

Then there’s the opposition of the environmental movement, whose objections are by no means limited to fears for pristine landscape, and whose protests very much include the oilsands being a producer of greenhouse gas emissions.

Not to be forgotten is B.C. Premier Christy Clark, who wants her province cut in on the action, even though royalties are paid only to the province owning the resource, namely Alberta. She’s considered likely to lose a May election to the NDP, which opposes Gateway under any circumstances.

But these are all sideshows beside the main event — the conversation between Enbridge and the First Nations.

Meantime, Enbridge wants to reverse a pipeline from Montreal to Sarnia, Ont., that would bring 300,000 barrels per day to idled refineries in the East End, as well as to Levis across from Quebec City, and possibly extending to St. John, N.B., which has both an Irving refinery and a deep water port.

On this file, Enbridge has done its homework, enlisting support from all the chambers of commerce and interest groups. Alberta Premier Alison Redford and Quebec’s Pauline Marois have already had one positive conversation about it.

The road to China could lead through Quebec.

Similarly, a route to energy-hungry Asia could pass through refineries to ships on the Texas Gulf Coast.

That is, if and when the Obama administration in Washington gets around to approving it.

And with the International Energy Agency forecasting the U.S. achieving energy self-sufficiency by 2020, Keystone isn’t really about reducing U.S. dependence on foreign oil. Not in the longer term. It’s about a route to Asia for Canadian oil, and diversifying our markets.

This is the top bilateral file on Stephen Harper’s desk, and, with the election behind him, Obama owes Canada this one.

In terms of the Canadian energy policy discussion, watch out for Redford, Alberta’s best advocate on the national stage since Peter Lougheed. She has the standing with her fellow premiers to move a Canadian energy strategy through the Council of the Federation, perhaps by this summer’s meeting.

At which point, Harper should step up. Though he’s normally averse to meeting with the premiers as a group, he could do much worse than call a first ministers’ conference on energy, one with First Nations at the table.

As his adroit handling of the Nexen deal and foreign ownership of the oilsands proves, Harper knows the energy file cold. In the nearly seven years he’s been in office, his leadership style has been more transactional than transformational. If he’s looking for a big idea, here’s one right in front of him. It’s a leadership moment.