Should B.C. Premier Christy Clark follow through on her promise to block the proposed Northern Gateway pipeline if her conditions for the project aren't met, Northwest Territories Premier Bob McLeod says he would be prepared to step in and support a "northern route" that would see bitumen shipped from Alberta north to the N.W.T. and out to Asia.
That's because the Mackenzie Valley pipeline, a $16.2-billion project intended to transport natural gas from the Beaufort Sea through the Northwest Territories, south to a hub in northwestern Alberta and out to North American markets, has been put on hold after its investors suspended the funding.
In an interview that aired Saturday on CBC Radio's The House, McLeod said his preference is to see the Mackenzie Valley pipeline project go ahead but if the project is dead then he is prepared to look at "all the possibilities."
"If all the doors are closed, then we're prepared to look at other options," McLeod told guest host Louise Elliott.
After a lengthy review, Canada's National Energy Board (NEB) approved the Mackenzie Valley pipeline in Dec. 2010, more than six years after the project's developers submitted their plans. However, development of the pipeline was proposed in the 1970s.
The NEB gave the developers, a five-member consortium, until the end of 2013 to make a final decision on whether to proceed with the project. But in April, two of the partners announced they were either suspending the funding or scaling it back, citing low prices for natural gas and ongoing negotiations with the federal government on incentives to lower the costs of the project.
McLeod said it would help if the federal government would deem the Mackenzie Valley pipeline to be in Canada's "national interest," just as it has already done with the proposed Northern Gateway pipeline project.
The N.W.T. can't afford to have its "natural resources stranded for another 40 years," McLeod said.
No 'direct discussions'
Although no "direct discussions" are currently underway between the governments of Alberta and the Northwest Territories, Cal Dallas, Alberta's minister of International and Intergovernmental Relations, welcomed McLeod's overture.
"We would be more than pleased to talk to Premier McLeod and anyone in the N.W.T. that's interested in the potential of co-operating on projects," Dallas said in an interview that also aired Saturday on The House.
Dallas said he took McLeod's comments "as a signal that the Northwest Territories recognizes that access to markets for Alberta energy would really enhance economic opportunities and jobs across Canada."
McLeod's comments might "encourage the private sector to contemplate the economic viability" of other pipeline projects, the Alberta minister said.
Dallas said a northern route that would see Alberta's bitumen transported north to the N.W.T. and out to Asia "might be a project … that could be actively contemplated" at some point in the future.
On Friday, the federal government set a firm deadline of Dec. 31, 2013, for the joint review panel to submit its report on the Northern Gateway project.
The firm deadline was to comply with the federal government's omnibus budget legislation that passed in June, which included the fast-tracking of the regulatory approval process for major energy projects.
The deadline came on the heels of a cabinet minister expressing doubt about Enbridge's safety record.
Amid growing protests against the Northern Gateway pipeline, Heritage Minister James Moore, a senior minister for B.C., told a Vancouver radio program that Enbridge ought to take environmental safety more seriously if the proposed pipeline is to be approved.
Calgary-based Enbridge is facing increased scrutiny and criticism following a major oil spill in the United States and an unfavourable report by the U.S. National Transportation Safety Board looking into a 2010 oil spill. That U.S. report prompted the NEB to announce it will increase its safety audits on the company's Canadian operations in the coming months.
At the Council of the Federation premiers meeting last week in Halifax, B.C. rejected a national energy strategy led by Alberta Premier Alison Redford. Premier Christy Clark said a national energy strategy had to address British Columbia's concerns about moving heavy oil across the province and its coastlines.
According to McLeod, all the provinces and territories could benefit from a national energy strategy and "no one individual project should overshadow that."
Top 5 Provincial Resource Spats
Before the $5.5-billion Northern Gateway pipeline contract is even inked, not to mention approved by a federal panel, a heated quarrel has erupted between Alberta and British Columbia about divvying up the revenues.<br><br>It's not the first time in Canada that resources have spurred disputes between neighbouring provinces. And it likely won't be the last.<br><br>Here's a look at just a few examples of provincial spats, including the Alberta-B.C. one, over issues ranging from human to energy resources.<br><br> <em>With files from CBC</em>
Northern Gateway Pipeline
Alberta vs. British Columbia<br><br>In the dispute over the proposed Enbridge pipeline, B.C. is calling for a share in the project's revenue to compensate it for the potential environmental risks inherent in running a crude oil pipeline across its land. Alberta has refused to share royalties, citing a province's right to income from natural resources within its own borders.<br><br>The proposal involves two pipelines, stretching a combined 1,177-kilometres, that would carry 525,000 barrels of oil per day from the Alberta oilsands to the ports on the West Coast. Enbridge has estimated that public benefits would amount to $2.6 billion in local, provincial and federal tax revenues over 30 years of operation. Environmental groups and aboriginal communities have opposed the proposed pipeline, particularly over worries of an oil spill.
Upper Churchill Falls Hydro Project
Newfoundland vs. Quebec<br><br>Perhaps the most famous inter-provincial skirmish is the Upper Churchill Falls hydroelectric project. It's a battle that has raged between Quebec and Newfoundland and Labrador for more than half a century.<br><br>In 1969, Churchill Falls Labrador Corp. signed a deal with Hydro-Quebec that secured the creation of a power corridor through Quebec, enabling access to outside markets. In return, Newfoundland and Labrador agreed to sell a large portion of the electricity at a fixed rate until 2041 to Hydro-Quebec, the provincially owned utility.<br><br>The 65-year agreement did not account for inflation, nor the drastic rise in energy prices that was to come. Hydro-Quebec benefitted from the cheap price, profiting as it sold on the electricity to the U.S. and refused repeatedly to renegotiate the contract.<br><br>A 1996 report by Maclean's magazine found Newfoundland received $20 million a year by selling power to Hydro-Quebec, but the utility earned $800 million annually by selling that same power to hungry U.S. markets along the eastern seabord.<br><br>Since the 1970s, Newfoundland and Labrador has repeatedly tried to challenge the contract, seeking help from the federal government to the Supreme Court.
Ontario vs. Quebec<br><br>In the late 1970s, Ontario and Quebec began a tit-for-tat dispute over construction workers crossing the border to work in each other's province.<br><br>Dubbed the Ontario-Quebec Construction War in some newspaper accounts, the tiff appears to have started when Quebec enacted restrictions in 1978 effectively barring Ontario construction workers from certain projects there. Ontario sought to retaliate with similar rules. Thus began a political dispute that lasted decades, flare-ups often fuelled by economic downturns.<br><br>Quebec's highly-regulated construction industry has historically deterred Ontario workers wanting to work in Quebec -- while also driving Quebec workers into the more open Ontario.<br><br>Frustrated by the flow of workers into Ontario, Ontario enacted a Fairness is a Two-Way Street Act in 1999, barring Quebec construction workers from Ontario government projects. The two provinces eventually settled their differences in 2006 with a construction mobility agreement.
Ontario vs. Manitoba<br><br>In Canada's early days, as boundaries were still being carved out, Ontario and Manitoba clashed for years over a tract of land on the western and northern boundaries of Ontario that each claimed as its own. An 1883 New York Times article described "frequent disgraceful conflicts" that "stopped short of bloodshed."<br><br>The tract was rich in timber and minerals, and also contained a port on Lake Superior.<br><br>In 1880, Manitoba extended its boundaries, with the federal government confirming them the next year.<br><br>But Ontario did not agree, saying the extension gave the disputed area to Manitoba. Confusion reigned in the disputed area as it lacked not only civil courts and a registry office to record deeds, but a timber agent to protect the forest. The U.K. judicial committee of the Privy Council finally weighed in. In 1889, the boundary of Ontario was extended west of Lake of the Woods and north to Albany River.
National Energy Program
Alberta vs. Ottawa (and Ontario and Quebec)<br><br>In the wake of the energy crisis in the late-1970s, when the OPEC nations raised the price of oil, the Trudeau government introduced the National Energy Program, basically to equalize the price of oil in Canada and offset higher prices being paid the central and Atlantic provinces.<br><br>Highly unpopular in Western Canada, particularly in Alberta where most of Canada's oil is produced, the NEP sought to increase the federal share of energy revenues and make Canada a self-sufficient oil producer. Alberta viewed the program as an intrusion into provincial control over natural resources, as set out in the British North America Act, then the country's constitution.<br><br>Peter Lougheed, the Alberta premier at the time, retaliated against Ottawa by cutting provincial oil production. The fight caused huge uncertainty in the oil patch and essentially pitted the Western province against Eastern Canada. Lougheed said the federal government effectively "weighed Alberta's needs for markets against the economic advantages to Eastern Canada, and decided against us."<br><br>Eventually Lougheed and Trudeau signed a revised energy agreement in 1981, whch rejigged the revenue-sharing arrangement and reduced the NEP export tax on Alberta.<br><br>In 1982, the Supreme Court of Canada ruled Ottawa couldn't legally tax provincially owned oil and gas wells and the last vestiges of the controversial program were scrapped after Conservative Brian Mulroney was elected in 1984.
10. Oil And Gas Accounts For 4.8 Per Cent Of GDP
The oil and gas industries accounted for around $65 billion of economic activity in Canada annually in recent years, or slightly less than 5 per cent of GDP. Source: <a href="http://www.ceri.ca/docs/2010-10-05CERIOilandGasReport.pdf" target="_hplink">Canada Energy Research Institute</a>
9. Oil Exports Have Grown Tenfold Since 1980
Canada exported some 12,000 cubic metres of oil per day in 1980. By 2010, that number had grown to 112,000 cubic metres daily. Source: <a href="http://membernet.capp.ca/SHB/Sheet.asp?SectionID=9&SheetID=224" target="_hplink">Canadian Association of Petroleum Producers</a>
8. Refining Didn't Grow At All As Exports Boomed
Canada refined 300,000 cubic metres daily in 1980; in 2010, that number was slightly down, to 291,000, even though exports of oil had grown tenfold in that time. Source: <a href="http://membernet.capp.ca/SHB/Sheet.asp?SectionID=7&SheetID=104" target="_hplink">Canadian Association of Petroleum Producers</a>
7. 97 Per Cent Of Oil Exports Go To The U.S.
Despite talk by the federal government that it wants to open Asian markets to Canadian oil, the vast majority of exports still go to the United States -- 97 per cent as of 2009. Source: <a href="http://www.nrcan.gc.ca/statistics-facts/energy/895" target="_hplink">Natural Resources Canada</a>
6. Canada Has World's 2nd-Largest Proven Oil Reserves
Canada's proven reserves of 175 billion barrels of oil -- the vast majority of it trapped in the oil sands -- is the second-largest oil stash in the world, after Saudi Arabia's 267 billion. Source: <a href="http://www.ogj.com/index.html" target="_hplink">Oil & Gas Journal</a>
5. Two-Thirds Of Oil Sands Bitumen Goes To U.S.
One-third of Canada's oil sands bitumen stays in the country, and is refined into gasoline, heating oil and diesel. Source: <a href="http://www.nrcan.gc.ca/statistics-facts/energy/895" target="_hplink">Natural Resources Canada</a>
4. Alberta Is Two-Thirds Of The Industry
Despite its reputation as the undisputed centre of Canada's oil industry, Alberta accounts for only two-thirds of energy production. British Columbia and Saskatchewan are the second and third-largest producers. Source: <a href="http://www.nrcan.gc.ca/statistics-facts/energy/895" target="_hplink">Natural Resources Canada</a>
3. Alberta Will Reap $1.2 Trillion From Oil Sands
Alberta' government <a href="http://www.huffingtonpost.ca/2012/03/27/alberta-oil-sands-royalties-ceri_n_1382640.html" target="_hplink">will reap $1.2 trillion in royalties from the oil sands over the next 35 years</a>, according to the Canadian Energy Research Institute.
2. Canadian Oil Consumption Has Stayed Flat
Thanks to improvements in energy efficiency, and a weakening of the country's manufacturing base, oil consumption in Canada has had virtually no net change in 30 years. Consumption went from 287,000 cubic metres daily in 1980 to 260,000 cubic metres daily in 2010. Source: Source: <a href="http://membernet.capp.ca/SHB/Sheet.asp?SectionID=6&SheetID=99" target="_hplink">Canadian Association of Petroleum Producers</a>
1. 250,000 Jobs.. Plus Many More?
The National Energy Board says oil and gas employs 257,000 people in Canada, not including gas station employees. And the Canadian Association of Petroleum Producers says the oil sands alone <a href="http://www.capp.ca/aboutUs/mediaCentre/NewsReleases/Pages/OilsandsaCanadianjobcreator.aspx" target="_hplink">will grow from 75,000 jobs to 905,000 jobs by 2035</a> -- assuming, of course, the price of oil holds up.