Alberta’s premier seeks more North American energy integration

Better policy integration and cooperation will be needed for Canada, Mexico, and the US to fully realize the North American energy renaissance’s potential, Alberta Premier Jim Prentice said. Unfortunately, trends are leading more toward fragmentation and confrontation, he warned.

As Canada’s environment minister, Prentice said he worked closely with the Obama administration on automotive efficiency standards that have contributed significantly to greenhouse gas emissions on both sides of the border.

“Unfortunately, this cooperation has been waning into fragmentation,” he said in a Feb. 4 luncheon address at the US Chamber of Commerce. “We’re actually headed for the worst of all worlds—a fragmentation with rules which apply to some oils but not others, or exclude one country’s crude in some states and communities while giving a free pass to oil from Venezuela.”

Prentice said that strengthening North American energy principles, establishing the continent as a global environmental performance leader, and developing safer and more modern energy transmission systems should be the primary goals in all three countries.

“Free markets produce impressive results when they’re allowed to work,” he said. “It’s time we started doing that.”

Free trade is largely responsible for the North American energy market integration that has been achieved so far, Prentice said. “The energy renaissance under way in Canada and the US only augments what we already share,” he said. “It has opened up a triple North American competitive security, industrial, and environmental advantage unmatched anywhere else in the world.”

Hardly one-sided

After nearly a century of dwindling crude oil supplies and increasing imports, US government decision-makers soon will be able to dispense with having to do business with regimes which fundamentally oppose this country’s interests and values, Prentice said.

Beyond US oil production’s growth, Canada’s emergence as the largest foreign oil supplier to the US is by no means one-sided, with more than 1,900 US companies working in the oil sands value chain, he said.

Lower natural gas prices have generated substantial industrial and manufacturing growth on both sides of the border, Prentice said. “We are now opening up a tremendous advantage, but it will have to be shored up by building more infrastructure in both countries,” he said.

Prentice said he has visited Enbridge Pipeline’s LLC’s recently completed Flanagan South crude oil pipeline, a nearly 593-mile, 36-in. interstate system which originates in Pontiac, Ill., and terminates in Cushing, Okla. It has an initial 585,000 b/d capacity, with an ultimate 880,000 b/d design capacity after pumping station enhancements, according to the Enbridge Inc. division.

Flanagan South was simply the latest of several crude pipelines Canadian companies have built to move Alberta’s heavy crude to US Gulf Coast and Midcontinent refineries without significant opposition, Alberta’s premier said.

That’s why many Canadians are confused over more than 6 years of delays in TransCanada Corp.’s obtaining a crossborder permit for its proposed Keystone XL crude pipeline, he said. “I agree with [US President Barack Obama] that this should be about more than one pipeline,” Prentice said. “We need a renewed focus on the bigger picture and longer term.”

Contact Nick Snow at nicks@pennwell.com.

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