Trudeau to talk balancing oil with the environment at energy summit in Houston

The annual CERAWeek conference brings more than 3,000 people - including legislators, energy executives, innovators and experts - from around the world.

Thestar.com
March 9, 2017
By Joanna Smith

Prime Minister Justin Trudeau is in the heart of the U.S. oilpatch to make the case for investing in Canadian natural resources - while protecting the environment - at an influential global gathering of politicians and oil and gas executives.

“We need to build stronger economies and economic opportunities for citizens while at the same time protecting the environment and thinking about the jobs of the next generations from now as well,” Trudeau said Thursday in Houston as he sat down with business leaders for a roundtable on the future of energy.

The two-day trip is the first time a Canadian prime minister has attended the annual CERAWeek conference, which brings more than 3,000 people - including legislators, energy executives, innovators and experts - from around the world.

Trudeau was to talk up the connection between resource development and taking care of the environment during Thursday night’s keynote speech. The conference is also giving him an award for his stance in favour of sustainable development.

A question-and-answer session with Daniel Yergin, the vice-chairman of IHS Markit, the London-based research firm that organizes the conference, was to follow the speech.

The visit comes at a time when the energy industry, buoyed by a recent resurgence in the price of oil, and governments around the world are grappling with a dramatic shift in American politics.

Barack Obama, the former U.S. president, had emphasized the global fight against climate change as he neared the end of his time in the White House. That position aligned smoothly with Trudeau’s commitment to transition to a low-carbon economy.

Obama’s successor, Donald Trump, has vowed to boost fossil fuel production through easing regulations and building more pipelines, including the Keystone XL pipeline project that TransCanada proposed nearly a decade ago.

That pipeline, which the Liberal government supports, could bring Canadian jobs and help for the struggling Alberta economy.

But Trump’s anti-regulation and tough-on-trade approach could also challenge Trudeau’s vision for a clean-energy future and the carbon-pricing plan he says will help bring it about.

The Conservatives have been highly critical of the Liberal plan to set a national price on carbon - beginning at $10 per tonne in 2018 - and to require all provinces and territories to have some form of carbon pricing in place by then.

Conservative MP Mark Strahl, the party’s natural resources critic, suggested that’s frightening international investors away.

“All they’re looking at is cost-certainty and the break-even price per barrel, and when you increase the costs on any sector like the government of Canada is doing, you risk becoming uncompetitive.”

Trudeau’s government has approved two pipelines: Trans Mountain’s Kinder Morgan line and Enbridge’s Line 3 rebuild - evidence, he’s likely to argue, that his pro-environment government still supports developing natural resources.

Still, Thursday brought news of more international energy giants abandoning the Canadian oilsands: Netherlands-based Royal Dutch Shell and Houston-based Marathon Oil are selling their stakes to Canadian Natural Resources for $12.74 billion in cash and shares.

The move shows that at a time of lower crude prices, and the quick growth of less costly shale oil, foreign companies are taking another look at their investments in the costly and carbon-intensive Alberta oilsands.

Trudeau’s visit is part of ongoing Liberal government efforts to convince the Trump administration and other American legislators that keeping an open border benefits the economy - including the energy sector - in both Canada and the U.S.

On Friday, the prime minister is scheduled to meet with Greg Abbott, the governor of Texas, and Lisa Murkowski, the U.S. senator for Alaska. Both are Republicans.

David MacNaughton, Canada’s U.S. ambassador and a key player in the government’s outreach efforts, is also part of Trudeau’s entourage in Houston.

Natural Resources Minister Jim Carr, who has been at the conference all week, said the American executives he met there have told him they are “free traders” and against any border adjustment taxes.

“The integration is long and it’s deep and I think that is well understood,” Carr told reporters in Houston Thursday evening, but he also suggested Canadians could do an even better job explaining that fact.

“We’re not always top of mind, but when we have an opportunity to explain Canada’s position, we always have to do it in the joint interest, and not only in Canada’s national interest,” he said.