Canada told to take lead on pipelines

Canada needs to be a leader on policies for the environment, climate change and aboriginal relations for its energy industry to compete globally, said former Alberta premier Jim Prentice.

Amid a continuing struggle over proposed crude pipelines to the Pacific Coast, Canada can benefit from sound policy as a way to win favour for the projects so it can export to Asia, he said Tuesday.

Prentice, a former federal Conservative environment minister who’s now an energy adviser to private-equity firm Warburg Pincus LLC, was speaking at the Bloomberg Canada Fixed Income Conference in New York.

“Canada needs to lead in the development of our resources, and we need to do that in a responsible way,” Prentice said at the conference.

“We’ve found ourselves in a continental trap that ties us into being a discounted energy provider to the United States.”

He applauded that Prime Minister Justin Trudeau is supportive of building a pipeline to the Pacific Coast.

Two years into a commodity-price downturn, executives in Canada’s oil and natural gas hub have slowed drilling, sold assets, raised equity and debt and focused on cost-cutting.

Investment since the slump began in 2014 has been slashed the most since 1947, according to the Canadian Association of Petroleum Producers.

A decline in drilling shows low-cost capital is fleeing the country’s oil and gas industry because of high costs and a lack of pipeline access to ship products to Asia, Prentice said.

He cited recent asset sales or shelved projects in Canada by ConocoPhillips, Statoil ASA, Total SA, Royal Dutch Shell Plc, Devon Energy Corp. and Apache Corp.

“As commodity prices return, if we don’t address some of those underlying issues, we’re going to find ourselves further down on capital allocation and we’re going to miss out,” Prentice said.

Oil futures in New York have recovered about 70 per cent from a February low and are hovering around $45 a barrel.