Canada Energy: China To Push Pact With Canada On Stephen Harper Visit, Envoy Says

Canada China Energy Oil Sands

First Posted: 01/23/2012 3:11 pm Updated: 01/26/2012 11:16 am

OTTAWA - China wants to forge a "win-win" energy partnership with Canada that would set an example for the world, while also satisfying its "huge" demand for resources.

China's ambassador to Canada, Zhang Junsai, offered Beijing's view exclusively to The Canadian Press as Prime Minister Stephen Harper prepares for his return trip to the Asian economic giant in two weeks.

Not surprisingly, energy and resources will be high on the agenda for Harper's visit, the envoy said.

"China is undergoing rapid industrialization and urbanization, and its demand for energy and resources is simply huge. Canada, on the other hand, is rich in energy and resources, which also boasts for its stable political situation as well as favourable conditions for investment," Zhang wrote in a 1,100-word statement that he penned in response to an interview request.

"The two countries have every reason to forge a stable and win-win partnership in the long run in the field of resources."

The Chinese embassy said Zhang was too busy for an interview as the country enters its New Year celebrations this week.

Zhang's sweeping statement provides insights into how Beijing's communist leaders view relations with Canada, and how important Alberta's vast oil reserves are to fuelling China's booming economy.

In the last year alone, Chinese state-owned enterprises have invested $5 billion in Canada's resource sector, the ambassador noted.

Harper has made it clear that he views China and its Asian neighbours as important new markets for Alberta oil. It's a point he has emphasized since the Obama administration turned down the $7-billion Keystone XL pipeline project that would have transported oilsands crude to refineries on the U.S. Gulf coast.

The Conservative government has also made clear it wants to see approval of the Northern Gateway pipeline to the British Columbia coast in order to ship oilsands products to Asia.

The issue surfaced on the weekend in the U.S. Republican primaries when GOP presidential contender Newt Gingrich denounced a possible Canada-China energy partnership as "truly a danger" to American interests.

China, however, views such a partnership "as a shining example of (a) win-win scenario even among states of different social systems and stages of development," said Zhang.

Zhang said Sino-Canadian relations are enjoying a period of "strong momentum," but he made a thinly-veiled request that Harper not fall back into making critical and provocative statements about China's human rights shortcomings.

Soon after winning power in 2006, Harper upset the Canadian business community and Beijing's communist leaders by stating that human rights concerns would not be sold "out to the almighty dollar." It sent bilateral relations into a three-year decline. They were not reset until late 2009 with Harper's first visit to the People's Republic.

Harper may have toned down any perceived anti-China sentiment, but Foreign Minister John Baird renewed his criticism of China's crackdown on religious freedom in a speech Monday in London.

"In China, we see Roman Catholic priests, Christian clergy and their laity, worshipping outside of state-sanctioned boundaries, who are continually subject to raids, arrests, and detention," Baird said in a prepared text.

"We see Falun Gong practitioners, Tibetan Buddhists, and Uyghur Muslims face harassment, and physical intimidation. These abhorrent acts fly in the face of our core principals, our core values."

Zhang's missive states that it is "only natural" to have differing views on certain issues because "Canada and China are different in terms of history, culture, social system and stage of development .... Instead of being barriers, these differences should be drivers for deeper understanding."

The ambassador revealed that Harper also plans to bring a large group of business people on the six-day visit, fuelling Chinese optimism that several memorandums of understanding will be signed that will give investors in both countries a more "stable and predictable policy framework."

The addition of business leaders suggests Harper's return visit to China is taking on the hallmarks of the former Liberal government's Team Canada excursions that ex-prime minister Jean Chretien pioneered.

Zhang also emphasized what analysts consistently stress about building relations with China — that it is best accomplished through face-to-face meetings between the countries' leaders. Chretien, for instance, made six trips to China during his 10 years as prime minister.

As soon as Harper arrived in Beijing in 2009 he was publicly chided by his hosts for waiting three years to visit after coming to power.

In June 2010, Harper hosted Chinese President Hu Jintao in Ottawa. Zhang said the "frequent high-level contacts between leaders of the two countries" have been good for relations, as will Harper's upcoming visit.

"Firstly, the visit will further deepen the mutual trust. Close contacts between leaders of two countries have become a feature of the recent China-Canada relations," said Zhang.

"The growing political mutual trust between the two sides is the bedrock and an important driver for the healthy and stable development of China-Canada relations."

Canada has "featured advantages" in several industrial sectors, he noted, including high-tech, environmental protection, clean energy, information technology, aerospace, aviation and the bio-pharmaceutical industry. China hopes to build on a framework it established last year with Canada in these fields.

"China is more than ready to learn from Canada, to introduce more Canadian advanced technology into China and to launch joint science research with Canada," he said.

Harper gave additional public weight to his return visit to China by announcing it with Zhang at his side during a photo-op at his Ottawa office earlier this month.

As Harper's Feb. 6 departure date approaches, the prime minister will undoubtedly face pressure from interest groups to raise human rights issues on his trip.

Next week, Zhang is to give a luncheon address to the influential Canada-China Business Council on the "the next step" in bilateral relations.

Harper, meanwhile, is off to the international economic thinkfest in Davos, Switzerland, this week, where he will reiterate Canada's desire to diversify its trade, especially its oil exports, said his spokesman Andrew MacDougall.

"It's important to us now that a road has been blocked in the States," MacDougall told reporters, referring to the recent Keystone XL pipeline decision.

MacDougall did not mention China specifically, but said Harper is eyeing emerging markets in particular.

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TOP POLLUTING PROVINCES
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  • Canada's Top Polluting Provinces

    As Canada begins the process of withdrawing from the Kyoto Protocol this year, here's a look at the country's top polluting provinces. (Mt CO2 eq refers to megatonnes of carbon dioxide equivalent, which is the standard international unit of measurement for reporting GHG emissions. It expresses all greenhouse gases emissions in terms of the global warming potential of carbon dioxide, CO2. One megatonne is equal to one million tonnes.) * Signatories to the Kyoto Protocol submit greenhouse gas emissions inventories to the United Nations Framework Convention on Climate Change annually, but the data itself lags two years behind. ** Facility-reportedemissions are those reported by large industrial facilities like fossil-fuel-powered power plants, mining An activist wears a mask depicting the face of Canadian Prime Minister, Stephen Harper, during a protest in Durban on the sidelines of the UN climate talks, on December 5, 2011. (ALEXANDER JOE/AFP/Getty Images) <em>With files from CBC</em>

  • 7. Quebec - Per capita: 10.4 tonnes CO2 equivalent

    Emissions target: 20 per cent below 1990 levels by 2020 2009* emissions: - Total: 81.7 Mt CO2 eq. - Per capita: 10.4 tonnes CO2 eq. % change from 1990: -1.9 per cent % of Canada's total emissions: 11.8 per cent (**facility-reported emissions: 8 per cent) LEGISLATION: Cap and trade -- Quebec will be the first jurisdiction in Canada to adopt a cap and trade system for reducing emissions, effective January 2012. The first year will be a transition year in which participants are to get a feel for how the system works but are not obliged to comply with the caps. Under the system, the province establishes an overall emissions objective and then sets specific caps on individual sectors based on average emissions in that sector or on a company by company basis. Emitters whose emissions are below the cap will be able to sell emissions credits to companies whose emissions exceed the cap. Quebec will be part of the same cap-and-trade system as California since both are members of the Western Climate Initiative. Some environmental groups, including the Pembina Institute, have said the auction price for emissions credits that Quebec has set --$10 per tonne in 2013 and $15 per tonne in 2020 -- is too low to motivate significant reductions in emissions and have urged the province to raise them. Carbon tax -- Quebec was the first jurisdiction in North America to introduce a carbon tax in 2007. The tax applies to about 50 fuel producers and distributors that use a large amount of hydrocarbons. The $200 million collected annually through the tax goes to fund projects that are part of the province's Climate Change Action Plan. The tax rate varies depending on the amount of carbon released during combustion: - Gasoline: 0.8 cents/litre - Diesel: 0.9 cents/litre - Propane: 0.5 cents/litre - Light heating oil: 0.96 cents/litre - Heavy heating oil: 1 cent/litre - Coke used in steel making: 1.3 cents/litre - Coal: $8/tonne Energy -- It's no accident that Quebec is one of the few provinces to have reduced its emissions from 1990 levels: 96 per cent of the province's electrical power comes from renewable sources. While hydro power is its biggest strength, it has also invested heavily in wind power and aims to develop 4,000 MW of wind-generated electricity by 2015. (Alamy)

  • 6. Ontario - Per capita: 12.6 tonnes CO2 eq.

    Emissions target: 15 per cent below 1990 levels by 2020 2009* emissions: - Total: 165 Mt CO2 eq. - Per capita: 12.6 tonnes CO2 eq. % change from 1990: -6.5 per cent % of Canada's total emissions: 23.9 per cent (**facility-reported emissions: 20 per cent) LEGISLATION: Energy -- The province passed the Green Energy Act in 2009, which set the course for the province's transition to cleaner sources of energy and greater energy efficiency. It came with financial incentives for the development of wind, solar and biomass power-generation projects and created the feed-in tariff program by which producers of renewable energy are paid premium rates to supply the province's power grid. The Act also includes provisions to promote energy conservation and green construction in the public sector. Coal -- The province plans to phase out all of its coal-fired electricity generation by 2014 and replace it with wind, solar and other clean-energy sources. A total of 19 units at five coal plants will be shut; eight have been closed already. In the past decade, the province has gone from relying on coal for 27 per cent of its electricity needs to seven per cent. Cap and trade -- Ontario is part of the Western Climate Initiative and has the legislation in place to implement a cap-and-trade system but has not yet done so. In the last election, the Liberals said they were still committed to setting up the system but did not say when that might happen. Fuel -- Along with the federal regulations on renewable content, Ontario has committed to reducing carbon content in transportation fuels by 10 per cent by 2020. Emissions -- In 2009, Ontarioamended its Environmental Protection Act to allow greenhouse gas emissions to be regulated and laid the groundwork for a cap-and-trade system. As of 2010, any facility emitting more than 25,000 tonnes of CO2 equivalent has to report its emissions annually, but there are no limits on these emissions as yet. (GEOFF ROBINS/AFP/Getty Images)

  • 5. B.C. - Per capita: 14.3 tonnes CO2 eq.

    Emissions target:33 per cent below 2007 levels by 2020 2009* emissions: - Total: 63.8 Mt CO2 eq. - Per capita: 14.3 tonnes CO2 eq. % change from 1990: +28.1 per cent (2 per cent below 2007 levels) % of Canada's total emissions: 9.2 per cent (**facility-reported emissions: 5 per cent) LEGISLATION: Carbon tax -- B.C. introduced a tax on fossil fuels in 2008. It started at $10/tonne and will rise by $5 a year until 2012. It is currently at $25/tonne and applies to gasoline, diesel, natural gas, heating fuel, propane and coal -- and to peat and tires when used to produce energy. Revenue raised from the tax is put toward lowering other taxes. The tax covers about 70 per cent of B.C.'s emissions. Electricity -- B.C.'s Clean Energy Act requires that 93 per cent of the province's electricity come from renewable sources and aims to make B.C. not only self-sufficient in terms of its electricity supply but also to be a net exporter of clean electricity. Some have criticized the legislation, because it reverses B.C.'s past policy of generating only enough electricity to meet the province's own needs and allows the government to exploit rivers and the environment by selling surplus power. It also mergers the generating and transmission sides of the electricity sector that past governments had taken pains to separate. This can undermine the oversight authority of the B.C. Utilities Commission, particularly its ability to reject certain hydro power projects, critics say. Coal -- B.C. has abandoned coal-fired electricity generation in favour of renewables but is still Canada's biggest exporter of coal. In 2010, it exported about 23 million tonnes. Fuel -- B.C.'s Renewable and Low Carbon Fuel Requirements Regulation has targets for reducing emissions from transportation fuels. Its overall target is to reduce the carbon intensity of fuels by 10 per cent by 2020. Carbon intensity measures the CO2 equivalent emissions of fuel per unit of energy. The regulations also stipulate that gasoline must have five per cent renewable content beginning in 2010 and diesel must have five per cent renewable content by 2012. The province is also testing a fleet of 20 fuel-cell buses that have zero tailpipe emissions. The $89.5 million federal-provincial project runs until March 2014. Public sector -- In June 2011, the province announced it had succeeding in making government operations carbon neutral, meaning that by reducing emissions and purchasing carbon offsets for reductions made in other sectors, the net contribution to the province's emissions from the public sector would be zero. Many have questioned the government's methodology in declaring itself carbon neutral, pointing out that it exempted some government-owned operations, such as BC Ferries, and didn't give credit to some institutions for reducing certain heavy-emitting activities, such as commuting. Cap and trade -- B.C. is a member of the Western Climate Initiative formed in 2007 between several U.S. states and four Canadian provinces. The members of the initiative have agreed to set a regional target for reducing greenhouse gas emissions of 15 per cent below 2005 levels by 2020, which is less ambitious than the federal target Canada and the U.S. agreed to under the Copenhagen Accord; and to establish a regional cap-and-trade program. Although B.C. has the legislation in place to implement a cap-and-trade system and had initially said it would launch the program in 2012, the Liberal government under new leader Christy Clark has not committed to carrying out the plan and is currently reviewing whether a cap-and-trade model is the best way to meet the provincial target. So far, only Quebec and California have moved forward with the cap-and-trade plan. Both are to begin a trial year of operation in 2012. Christy Clark, Premier of British Columbia, Canada, speaks during the World Economic Forum - India Economic Summit in Mumbai on November 14, 2011. (PUNIT PARANJPE/AFP/Getty Images)

  • 4. Manitoba - Per capita: 16.6 tonnes CO2 eq.

    Emissions target: none 2009* emissions: - Total: 20.3 Mt CO2 eq. - Per capita: 16.6 tonnes CO2 eq. % change from 1990: +9.6 per cent % of Canada's total emissions: 3.1 per cent (**facility-reported emissions: 1 per cent) LEGISLATION: Emissions -- Under the NDP government of Gary Doer, Manitoba passed the Climate Change and Emissions Reductions Actin 2008, which committed the government to reducing emissions to six per cent below 1990 levels by 2012. It abandoned that target this December, after Canada withdrew from the Kyoto Protocol -- although, with 2012 fast approaching and Manitoba's emissions nowhere near six per cent below 1990 levels, the move was largely moot. Carbon tax -- The provinceintroduced a small carbon tax of $10 a tonne of CO2 equivalent on coal-fired electricity generation in July 2011, but it only affects three companies that are large emitters of greenhouse gases. Cap and trade -- Manitoba is a member of the Western Climate Initiative but has not yet laid the legislative groundwork for setting up a cap-and-trade system in the province. Manitoba Legislature in Winnipeg. (<a href="http://www.flickr.com/photos/jezz/">Flickr: Jezz's Photostream</a>

  • 3. Nova Scotia - 22.3 tonnes CO2 eq.

    Emissions target: 10 per cent below 1990 levels by 2020 2009* emissions: - Total: 21 Mt CO2 eq. - per capita: 22.3 tonnes CO2 eq. % change from 1990: +10.5 per cent % of Canada's total emissions: 3 per cent (**facility-reported emissions: 4 per cent) LEGISLATION: Electricity -- Almost 90 per cent of Nova Scotia's electrical power comes from fossil fuels, mostly coal. In 2009, the province passed regulations limiting emissions in the electricity sector. It set caps on any facility emitting more than 10,000 tonnes of CO2 equivalent per year. Clean energy -- The province passed an Environmental Goals and Sustainable Prosperity Act that sets targets for reducing emissions and increasing energy efficiency and the use of renewable fuel sources. The province aims to get 25 per cent of its electricity from renewable sources by 2015. Two Canadian bagpipers play in front of the town clock in Halifax. (Tim BREAKMEIE/AFP/Getty Images)

  • 2. Alberta - Per capita: 63.6 tonnes CO2 eq.

    Emissions target: 14 per cent below 2005 levels by 2050 2009* emissions: - Total: 234 Mt CO2 eq. - Per capita: 63.6 tonnes CO2 eq. % difference from 1990: +36.7 per cent % of Canada's total emissions: 33.8 per cent (**facility-reported emissions: 47 per cent) Alberta has also expressed its target as a 50 per cent reduction in emissions intensity below 1990 levels by 2020, which according to the Pembina Institute, translates to a reduction of 60 megatonnes in annual emissions below the business-as-usual level by 2020. Emissions intensity doesn't measure emissions in absolute terms but instead factors in GDP to measure GHG as a unit of production. This means that if production increases, emissions can increase and the province can still meet its target. Alberta's 2008 climate change strategy expresses its reduction targets as a cut in annual emissions of 50 Mt by 2020 and 200 Mt by 2050, a cut of 50 per cent below business as usual level. LEGISLATION: Emissions -- Alberta was the first province to implement regulations limiting greenhouse gas emissions when in 2003 it passed the Climate Change and Emissions Management Act. That act gave the province the right to regulate emissions, require mandatory reporting of emissions from certain facilities and set an overall provincial target of reducing emissions intensity to 50 per cent of 1990 levels by 2020. In 2007, the province added the Specified Gas Emitters Regulation. Under those laws, as of March 2008, existing facilities that emit more than 100,000 tonnes of greenhouse gas per year had to cap their emissions intensity at 12 per cent below the average for 2003-2005. Facilities built from 2000 on have a three-year reprieve before they have to start reducing emissions intensity by two per cent a year for five years. Emitters can choose to pay a penalty for exceeding their targets of $15 for every tonne over their limit. The money goes into the Climate Change and Emissions Management Fund, which as of September 2011 had collected $257 million -- from about $40 million in 2008. In 2009, the province set up a Climate Change and Emissions Management Corporation to invest the fund money into "emission reduction technologies." They can also purchase credits to offset their own emissions from emitters that have already reached their reduction targets or from companies that are not subject to the regulations (i.e. those who emit less than 100,000 tonnes a year) but have voluntarily reduced emissions. Environmentalists have criticized Alberta's emissions regulations for several reasons: - Measuring emissions intensity instead of absolute emissions allows the province to keep increasing emissions. The Alberta Environmental Law Centre has said that studies have shown that the province will be able to meet its emissions intensity target of 50 per cent below 1990 levels even if absolute emissions grow by 60 to 80 per cent above 1990 levels. According to the Pembina Institute, between 1990 and 2009, Alberta's greenhouse gas emissions increased more than those of any other jurisdiction in North America. - The regulations apply only to large emitters. - The $15/tonne penalty for exceeding reduction targets is not high enough to motivate changes in behaviour. Electricity -- Small-scale producers of renewable energy can feed the provincial grid and are compensated at the retail, rather than wholesale, price for electricity. As of 2005, almost all of the electricity in government buildings comes from renewable sources like wind and biomass, but overall, renewables still make up only five per cent of the province's total generating capacity. About 45 per cent comes from coal, and 40 per cent from natural gas. Coal --About 59 per cent of the province's electricity generation is fuelled by coal. Alberta angered many environmentalists in August 2011 when it approved a new $1.7-billion coal plant at a facility near Grande Cache owned by Maxim Power. The company plans to build a 500-megawatt generating station next to its existing 150-megawatt H.R. Milner plant, which is to shut down in 2012. The Pembina Institute estimates the new plant will emit more than three million tonnes of greenhouse gases each year -- the equivalent of adding 590,000 vehicles to the road. Source: Canada's 2011 national greenhouse gas inventory submission to the UN Framework Convention on Climate Change. Aerial view of the Suncor oil sands extraction facility near the town of Fort McMurray in Alberta on October 23, 2009. (MARK RALSTON/AFP/Getty Images)

  • 1. Saskatchewan - Per capita: 71 tonnes CO2 eq.

    Emissions target: 20 per cent below 2006 levels by 2020 2009* emissions: - Total: 73.1 Mt CO2 eq. - Per capita: 71 tonnes CO2 eq. % change from 1990: +69 per cent % of Canada's total emissions: 7.3 per cent (**facility-reported emissions: 9 per cent) LEGISLATION: Emissions -- The province passed a Management and Reduction of Greenhouse Gases Act in 2010 that allows it to regulate emissions but has not yet implemented emissions limits on facilities or required them to report their greenhouse gas emissions. Regulations to that effect are expected to be introduced in 2012, with the first caps coming into force in 2013. The province plans to set a price on carbon and have facilities that exceed the caps pay into a green technology fund similar to the one that exists in Alberta. Saskatchewan's emissions have grown more than those of any other province since 1990, increasing by 69 per cent. This is largely due to the explosive growth in the province's oil and gas sector, which accounts for 37 per cent of its total emissions. Saskatchewan is Canada's second largest producer of oil after Alberta and accounts for about 20 per cent of the country's oil production. Potash mining and the expansion of coal-fired power generation have also contributed to the growth in emissions. Coal -- About 60 per cent of Saskatchewan's electricity comes from coal-fired generation. The province has no plans to phase out coal but instead aims to retrofit existing units to include carbon capture and storage technology to reduce emissions. (<a href="http://www.flickr.com/photos/justaprairieboy/">Flickr: Just a Prairie Boy's photostream</a>)

  • Canada - Per capita: 20.5 tonnes CO2 eq.

    Emissions target: 17 per cent below 2005 levels by 2020 This is the target Canada agreed to under the 2009 Copenhagen Accord, which laid out the broad outlines of a possible agreement to replace the Kyoto Protocol once it expires in 2012. It is a smaller cut over a longer period than what Canada originally agreed to under Kyoto, which would have required Canada to reduce greenhouse gas emissions to six per cent below 1990 levels by 2012. The target mirrors the one proposed by the U.S. during the Copenhagen negotiations. After announcing on Dec. 12 that Canada will withdraw from Kyoto, Environment Minister Peter Kent said the government will stick to the Copenhagen target, even though it is not legally binding as the Kyoto target was. Canada's 2009*emissions: - Total: 690 Mt CO2 eq. - Per capita: 20.5 tonnes CO2 eq. % change from 1990: +16.9 per cent LEGISLATION: Coal -- federal emissions limits for coal-fired power plants are to come into force in July 2015. They will limit emissions to 375 tonnes of CO2 per gigawatt-hour of electricity produced per year. Emitters will be able to use carbon capture and storage to meet their emissions caps. The regulation will apply to any coal-fired unit commissioned after July 1, 2015, or at the end of its useful life -- which is the lesser of 45 years or the year 2020. Some critics say this limits the effectiveness of the law since about two-thirds of Canadian coal plants won't be subject to the regulations until 2020, and nine plants won't have to comply until 2030. Some also fear that the 2015 starting date for newly commissioned plants could prompt a rush to get new coal plants online before then to avoid being subject to the regulations. Indeed, one example of this already happened in Alberta, where Maxim Power received approval in August 2011 to build a new coal plant that won't have to comply with the emissions caps. Canada has 51 coal-burning electricity plants, which account for 13 per cent of the country's greenhouse gas emissions; 33 of the plants will be at the end of their life by 2025. Fuel -- In 2010, the government passed a regulation requiring an average of five per cent renewable content in gasoline and an annual average of two per cent in diesel fuel and heating oil. It adopted fuel emissionsstandards for passenger cars and light trucks for model years 2011-2016 that mirror those introduced in the U.S. Cars and light trucks account for 12 per cent of Canada's overall greenhouse gas emissions (and 43 per cent of transportation emissions). The transportation sector as a whole accounts for 27 per cent of overall emissions. Parliament Hill is blanketed in snow 18 December 2007 in Ottawa, Canada, (MICHEL COMTE/AFP/Getty Images)

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