Sunny Freeman, The Canadian Press
TORONTO - Canada needs Enbridge Inc.'s (TSX:ENB) Northern Gateway project if it wants to become a global energy superpower, the pipeline giant's CEO said Thursday.
Despite Canada's vast reserves of oil and gas, it can't be considered a superpower because its exports are focused on one market — the United States, Patrick Daniel said Thursday in a speech that appeared aimed at convincing politicians that environmentalists are wrong in their opposition to such projects.
That makes Canadian producers complacent and captive suppliers, Daniel said in a speech to the Empire Club of Canada, noting that because it has only one customer Canada now accepts prices instead of setting them.
"In my view, we could be a global player, but today we're merely a price taker" Daniel said.
Influence and impact on the world stage come from delivering to partners around the globe and the Northern Gateway Pipeline — which would deliver oil from Alberta to tankers on the British Columbia coast — would help the country reach Asian markets, where demand for crude is strong, he said.
"Our Northern Gateway project will propel Canada into that league — without it, we stay trapped in North America."
He urged the audience to join his own pre-election campaign to convince politicians that "Canada needs to be a more prominent world player" in energy markets.
But he is not concerned that the project could be killed if Conservatives do not hold on to power in the upcoming May election because the project is too important to Canada's energy security, he told reporters after the speech.
However, Enbridge faces several hurdles before it is cleared to build the project, including Liberal and NDP opposition to oil tankers off the coast of B.C. and a dispute with First Nations and environmental groups.
Daniel criticized "hard-line" activists for being hypocritical in "saying no" to the project outright while accepting the benefits that oil brings — ranging from heating their homes to bringing fresh produce to supermarkets.
"The industry continues to be unfairly criticized by those who use the very energy we deliver."
Gillian McEachern of Environmental Defence, who was at Daniel's speech, said in an interview that environmentalists "are able to say yes" to renewable energy but are particularly concerned about the potential impact of Northern Gateway.
They are concerned that the project would allow a 30 per cent increase in oilsands production, as well as about oil spills along the pipeline — which would cross 1,000 streams and rivers — and that it would increase the number of tankers transporting oil along a "pristine" ocean corridor.
Enbridge has offered First Nations groups in British Columbia a 10 per cent equity stake in the $5.5-billion pipeline.
About two-thirds of the groups are engaged in discussions about concessions, Daniel said in an interview after the speech. Another one-third are holding out, but Daniel said its unlikely Enbridge would sweeten the pot to get them on board.
The issue of energy security has been making headlines in recent weeks as a cascade of uprisings in the Arab world wreak havoc on global energy prices and prices at the gas pumps.
The price of oil has risen sharply in just over a month — from around US$84 a barrel on Feb 14. to around US$106 Thursday.
Canada's oilsands were the topic of a U.S. congressional hearing Thursday entitled "Rising Oil Prices and Dependence on Hostile Regimes: The Urgent Case for Canadian Oil."
A day earlier, U.S. President Barack Obama called for a one-third reduction in American oil imports by 2025, describing Canada as one of his country's energy partners as he tackled an issue that has dogged the United States since the 1970s.
Daniel said in an interview that Obama's remarks were encouraging but also a warning to Canadians that "we don't want that to be our only market."
While the United States, prefers Canadian oil because it is secure and reliable, it also has a whole world of other energy options — but Canada doesn't, he added.
"Our West Coast is the gateway to half of the globe's geography and nearly half of the world's population. It is an essential driver of our future economic success."
Last week, the president of Shell Canada said Canada must hammer out a national energy strategy if it is to count itself among the world's energy superpowers. Lorraine Mitchelmore said the country needs a more cohesive plan if it wants to be a major player on the world stage.
Daniel said he wholeheartedly agrees with Mitchelmore. It would be more difficult to reject projects like the Northern Gateway if there was a clear strategy, he added.
"If we understand where we are and where we want to go as a country in terms of energy, then I think we can come on side a lot of these projects a lot more than we do."
Note to readers: Takes "gas producer" out of lede
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