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Canada urged to delay climate change talks until next US presidency

02.13.2014  | 

Uncertainty over US approval of TransCanada's Keystone XL pipeline has become an “irritant” between the two countries, a bank official said. The next window to change the “core fundamentals” of the relationship will come in 2017, when President Barack Obama’s successor takes office, he said.

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By ANDREW MAYEDA
Bloomberg

Canada should wait to negotiate a continental accord on climate change until the next US president takes office, Canadian Imperial Bank of Commerce Vice Chairman Jim Prentice said.

Uncertainty over US approval of TransCanada's Keystone XL pipeline has become an “irritant” between the two countries, Prentice said in a speech given in Ottawa. The next window to change the “core fundamentals” of the relationship will come in 2017, when President Barack Obama’s successor takes office, he said.

“Our opportunity to engage the US will come,” said Prentice, who was a senior cabinet minister in Prime Minister Stephen Harper’s government until 2010. “When it does, we need to be ready. We need to work with the Americans to achieve an accord relating to climate change and the oil sands.”

Emissions from Alberta’s oil sands have become a focal point for those apposed to Keystone, which would carry bitumen to Gulf Coast refineries. Opponents like billionaire Tom Steyer say the line would encourage companies to exploit the world’s third-largest crude reserves, unlocking vast amounts of carbon and accelerating climate change.

TransCanada first applied to build Keystone XL in September 2008. Producers are counting on the project to help ease a transportation bottleneck and raise the price of Canada’s heavy crude, which averaged $24.50/bbl lower than the main US benchmark last year.

Continental Regime

Harper has resisted pressure to introduce rules to reduce greenhouse gas emissions by the nation’s oil and gas sector. In an interview with Bloomberg News in January, the prime minister said his government would prefer to develop a North American regulatory regime with the US, a position echoed by Alberta Premier Alison Redford this month.

Obama said in June the US wouldn’t approve Keystone if it’s found to “significantly exacerbate the problem of carbon pollution.”

To give itself more leverage with the US before 2017, Canada should move ahead “with pace and with purpose” in building Enbridge's Northern Gateway pipeline to the west coast and TransCanada’s Energy East route east, Prentice said. Harper’s cabinet must decide this year whether to approve Northern Gateway, designed to create an export hub to Asia.

Prentice said Canada must also build terminals in British Columbia to export liquefied natural gas (LNG), pursue “genuine engagement” with aboriginal groups and improve the country’s environmental performance.

“In a world concerned about carbon, Canada will either be an environmental leader or have other jurisdictions dictate our environmental policies,” he said. “If you doubted this before, surely your eyes have been opened by the US administration’s sustained focus on the scope of greenhouse gas emissions created by oil sands production.”



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