IN THE NEWS ~ Oil sands 'exporting jobs'

Published | Publié:
Received | Reçu: 2012-09-14 2:47 AM

What is NDP's energy stand?


Yadullah Hussain | Sep 14, 2012 7:00 AM ET | Last Updated: Sep 13, 2012 8:12 PM ET @Yad_FPEnergy

Ben Nelms/Postmedia


Peter Julian has seen the oil-and-gas industry from the 'shop floor' during his days as a labourer in a B.C. refinery. It's not a job or career he pursued, instead moving to social enterprises and eventually representing Burnaby-New Westminster as an NDP member of Parliament. Before being handed the portfolio of energy and natural resources shadow minister, Mr. Julian watched over treasury board, international trade and transportation. The varied experience, Mr. Julian says, allows him to appreciate the energy sector's impact on the wider economy. In a
wide-ranging talk with FP energy editor Yadullah Hussain, the MP spells out the
NDP's stance on the country's energy sector. Here are edited excerpts from the

Q. The federal government believes oil sands is crucial to its economic strategy. Given your stance on the oil sands, what would be the key pillars of your energy strategy?

A. We have to get the policies right so we are looking at the overall contribution of the oil sands. We want to see prosperity for average families right around the country and allow us to transition to a green-energy economy because we need to go where our major competitors are going. One of the concerns I have is the emerging and growing green-energy gap between Canada and other industrialized countries. In 2011, in one quarter in the U.S. there were 600 patents for sustainable-energy innovation; in Canada we had 10. The overall green sustainable-energy sector is estimated to be about US$3-trillion by 2020 - Canada gets far less than 1% of that. In terms of public sector, Canada's investment and research and development is the lowest among industrialized countries. We have been falling further behind, not just in green-energy development but in R&D generally. Coming out of Charlottetown [from the energy and mines ministers' meeting last week], we are seeing number of provinces taking initiatives - Manitoba, Nova Scotia and Ontario - and yet the federal government is simply not there.

Q. Renewable energy is crucial, but has its own issues. In the meantime, there are significant investments in hydrocarbons that can't be ignored.

A. US$3-trillion industry in green energy goes beyond infancy - that's significant investment worldwide. If Canada is lagging on R&D, we are also missing a real opportunity in oil sands development. You have massive investments like Shell Canada with Quest, looking at carbon capture and storage. And yet the federal government seems to completely reject the policy of cap-and-trade, which allows us to put a price on carbon. Shell Canada has been very clear with the Quest investment, which includes [investments from] the Alberta and federal governments. What we are seeing from the federal government is piecemeal development ... they are rejecting the possibility of putting in place a cap-and-trade system that allows the sustainability of new developments and installations like Quest.

Q. The industry is gearing up to produce around six million barrels per day in the next 20 years. Is the NDP against that development altogether or would you favour it if all the environmental conditions were met?

A. There are two issues.First is the environmental pact. Due diligence is simply not being done, particularly by the federal government in terms of enforcing existing regulation. The rapid pace of the oil and gas development is worrisome in part because sustainability has not been established. But here is the other issue: We need to ensure the resources we develop should have, as much as possible,
value-added done in Canada. We are exporting raw bitumen, raw logs and raw
minerals. The Conservative government's plan is to export more in raw state.
This is a real problem because when you look at the disastrous trade deficits
that we are seeing now in large part because we have a government that is
focused on raw exports rather than the development of value-added products. We
have lost half a million manufacturing jobs under the Conservatives' watch and
they want to fuel raw exports rather than development of refinery capacity and
upgrading capacity. When we are exporting raw bitumen, we are exporting jobs.
We don't feel that the plan to carve out raw bitumen as fast as possible and
ship it offshore is either environmentally sustainable or economically smart
from a Canadian perspective.

Putting aside the oil and gas sector, look at the mining, quarrying and smelting sectors. Over the last ten years, we have seen a decline in the number of jobs. We have seen a lot of new investments, but lower wages jobs have increased.

Q. Bank of Canada governor Mark Carney believes the high dollar is not to blame for the loss of manufacturing jobs, which is the view of the NDP government...

A. We have seen a whole number of reports including studies from federal government that show the high dollar has played a contributory role to the collapse of our manufacturing industries. What's interesting in Mark Carney's speech in the accompanying notes, confirms what we have been saying.... The real income of the average Canadian family has eroded about 2% in the past year. Higher wages are being replaced by low paid jobs, which is a broader issue.

Q. But Canada has been held out as an economic model by most independent bodies.

A. When you look at the situation for the average Canadian family, it has not been the case for the last half-decade.

Q. How do you view the acquisition of Canadian resource assets by foreign state-owned companies such as CNOOC?

A. We are concerned with the growing foreign investment in Canada and what that might mean for the oil sands. We need a level playing field for these types of takeovers and ensure they take place if there is net benefit to Canada. The investors also need to know there is a process they will go through and clarity and transparency around the rules. For the CNOOC purchase, we are not seeing this from the government. They promised a couple of years ago a transparent process and a real definition of net benefit and have failed to do it.

Q. The NDP has also voiced concerns on Keystone XL, which would ship crude to our most important market.

A. That's part of our broader concern about the export of jobs. There are environmental considerations but economic considerations as well. We will be exporting thousands of jobs by sending bitumen that will be processed in the U.S. We have also raised concerns about Northern Gateway and when you look at the economic risk to Gateway, it has seen a reaction from the public because thousands of jobs are put at risk by Gateway, in tourism and fisheries. So we have opposed that as well.

If the Conservatives attempt to ram through that pipeline with the changes that they have made to the NEB where ultimately, by cabinet, they can try to impose the pipeline on B.C., they risk not having a single safe seat in B.C. in the next federal election - feelings are that high against the pipeline.

Q. Yet the NDP is in favour of transporting Western Canadian oil to Eastern Canada via pipelines, which is also the subject of environmental concern?

A. Tom Mulcair has spoken in principle about the importance of ensuring that our energy resources are developed in Canada and that we stop or reduce our dependence on foreign suppliers in Eastern Canada. It does not make a lot of sense that we are importing in Eastern Canada and as a result have risky supplies, often from the Middle East, and at the same time exporting raw bitumen. There needs to be a real attempt by working in partnership with communities and provinces.

Q. So in principle you like David Black's refinery proposal?

A. What he proposed does not have a business plan and raised some questions more than anything else. He also wants to build components offshore, and that's self-defeating. That being said, we are happy that more people are looking at valued-added production in the country. We need to maximise the potential of our resources, and the fact that Mr. Black put forward that proposal shows more Canadians are coming to the NDP position.