Need to diversify energy markets and improve environmental
CALGARY, May 11 /CNW/ - Canada has an opportunity to be an energy
superpower in the next decade but needs to take action to diversify and
strengthen energy markets, Jim Prentice, Vice Chairman, CIBC told an
audience at the Calgary Chamber of Commerce today.
In laying out a roadmap for Canadian energy over the next decade, Mr.
Prentice identified hazards along the route and thoughts on how to
navigate around them. He pointed out that the marketplace is changing
for Canadian energy given a slow decline in U.S. demand for imported
energy and rising demand in developing countries.
"In 2021, Canada will be an energy superpower," said Mr. Prentice. "But
mere ownership of resources does not make us a superpower. We are the
world's largest producer of energy in all forms when measured per
capita. We have the oil, natural gas, hydro power and uranium. But we
are still missing one vital component: a diversified market."
He added that access to the U.S. market is facing tougher scrutiny by
U.S. regulators and pressure is growing both at home and abroad to make
the oil sands more environmentally sustainable.
"Canada will either be an environmental leader or have other
jurisdictions dictate our environmental policies. It should be lost on
no one that the President of the United States has spoken twice this
spring about Canada's environmental policies. The world is calling upon
Canada to improve its environmental performance vis-a-vis the oil
To achieve the goal of being an energy superpower, Mr. Prentice believes
Canada must do two things:
First, we need to clear away the impediments that are depriving the
Canada-U.S. energy relationship of its natural continental market-based
Second, we need to diversify our market to the Asia-Pacific.
"Today, virtually all our energy exports are destined for the United
States. We have one customer... and that makes us a price-taker rather
than a price-maker," he added.
He identified four impediments in Canada's energy relationship with the
Low-carbon fuel standards. He notes that 47 seven separate jurisdictions in the U.S. are now
developing their own low-carbon fuel standards which he characterized
as an attempt to download American environmental compliance costs onto
Growing protectionism in the renewable sector. He is concerned that some U.S. jurisdictions are trying to nurture
their renewable industries by setting renewable portfolio standards
that shut out Canadian hydro, "the cheapest and most abundant source of
renewable electricity." An estimated 25,000 MW of Canadian
hydroelectricity could be developed in the next 25 years which would
significantly green North America's electricity system.
The optimal flow of oil to Gulf Coast refineries. These refineries were designed to process heavy crudes and are
struggling to get sufficient volumes due to limited pipelines.
Getting regulatory approval for the Keystone XL pipeline project. The most difficult impediment at the moment.
"Canada's energy objectives must reflect our own national interest," he
said. "We need to have diversified markets to ensure the best marginal
price and to reduce our market risk. And the road to diversified
markets runs through our west coast and beyond to the countries of
He sees opening up Canada's energy trade to the Asia-Pacific for both
liquefied natural gas (LNG) and oil. He believes it critical that we
move forward with investments in the transportation and distribution.
Mr. Prentice laid out a straightforward and achievable road map to make
Canada an energy superpower by 2021. He told the Chamber of Commerce
audience that we need to:
Continue with efforts to remove impediments to a free market in North
American energy trade;
'Double down' on efforts to get Keystone XL approved and built;
Make oil sands production more sustainable, fully develop our prodigious
hydro resources, and improve our track position in the global clean
energy race; and
Diversify our energy markets by creating a corridor to the west coast
for Canadian oil and LNG.
"That is how Canada can become an energy superpower by 2021."
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