In the wake of the federal government giving its conditional approval this week to the development of the Northern Gateway pipeline, many commentators have argued that the federal government needs to be more involved in the process. Rather than just deferring to the joint review panel report and Enbridge's engagement with First Nations, the pundits say the federal government should lead the discussion.
They're right that the feds should lead but please, no more talk. How about some action?
So here's an idea.
Numerous companies involved in the Alberta oil sands are state-owned oil and energy companies. Some of the partners with Enbridge on Northern Gateway are also state-owned energy companies. Clearly, these countries see the value in not leaving something as important as energy completely in the hands of the private sector.
In this province, we already have B.C. Hydro. Having a Crown corporation is a good idea, not only for energy security and being able to influence rates, but also because government can better handle the cost of infrastructure development for a project like the Site C dam than the private sector, which wants to see a return on investment sooner rather than later.
See where this idea is going?
Stephen Harper, it's time to bring back Petro-Canada.
Don't worry.
We're not talking about another "Pierre Elliot Trudeau Ripping Off Canada" Petro Canada. Instead, we're talking public-private partnerships, something that small-c conservative politicians across Canada have already been doing for decades. These kind of partnerships have been used to build costly infrastructure by sharing the financial risk.
Much of the opposition to Northern Gateway has been less about the pipeline itself and more on what would be in the pipe. On the environmental side, raw bitumen is a far more toxic substance than refined petroleum products. On the employment side, pipelines are more palatable if they are shipping goods that Canadians were paid good wages to refine, rather than sending those raw resources - and the refining jobs - overseas.
There would be more buy-in to Northern Gateway in B.C. if the bitumen was refined in Kitimat before shipping the petroleum overseas, which two separate companies have proposed to do.
Many industry officials, however, remain doubtful that investors would tolerate the risk, the cost and the lengthy return on their investment of building a refinery on B.C.'s north coast.
The more ideal scenario would be if the bitumen was refined in Alberta first, before moving the petroleum products by pipeline on to the Pacific coast.
Numerous Harper Conservatives have talked about Northern Gateway as a "nation-building" project. Well, if it's so important to the nation, why is our national government sitting on the sidelines while energy companies owned by other national governments are willing to invest in Canada?
The Alberta government has already pledged $300-million to the construction of the Sturgeon refinery, the first major new refinery in North American in three decades, which will convert bitumen to diesel before shipping it to the United States. Rising costs have delayed construction of that facility.
This is where the feds can step in, with bridge financing for the Sturgeon project , as well as another refinery to move refined petroleum west to the Pacific.
It's a gamble, yes, but numerous public-private partnerships across Canada have yielded great benefits (and profits) for both sides. As usual, the devil is in the details but carefully written agreements for refinery development could give investors the security they're looking for and give governments both the short-term and long-term benefits (jobs, tax revenues) they want.
If the prime minister is serious in his belief that Canada can be an energy superpower, then he can't sit back and wait for others to pay for it, particularly when some of that cash is coming from other states. For Harper (and Canada) to gain more benefits from the development of the Alberta oil sands, then it's time to put some serious government dollars on the table.
Just call it something other than Petro-Canada.
