Canada PM vows to ensure key oil pipeline is built

Reuters News
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Posted: Feb 10, 2012 6:23 AM
Canada PM vows to ensure key oil pipeline is built

By David Ljunggren

GUANGZHOU, China (Reuters) - Canada's prime minister on Friday made his strongest comments yet in support of a proposed pipeline from oil-rich Alberta to the Pacific coast, saying his government was committed to ensuring the controversial project went ahead.

Enbridge Inc's Northern Gateway pipeline, which is strongly opposed by green groups and some aboriginal bands, would allow Canada to send tankers of crude to China and reduce reliance on the U.S. market.

An independent energy regulator -- which could in theory reject the project -- last month started two years of hearings into the pipeline.

In remarks that appeared to cast some doubt on the regulator's eventual findings, Prime Minister Stephen Harper said it had become "increasingly clear that it is in Canada's national interest to diversify our energy markets".

He continued: "To this end, our government is committed to ensuring that Canada has the infrastructure necessary to move our energy resources to those diversified markets."

Harper stepped up talk of oil sales to China in the wake of a U.S. decision last month to block TransCanada Corp's proposed Keystone XL pipeline from Alberta to the Gulf Coast of the United States.

Virtually all of Canada's energy exports go to the United States, where a glut of supplies means some Canadian crude is sold at sometimes heavy discounts.

"We have abundant supplies of virtually every form of energy. And you know, we want to sell our energy to people who want to buy our energy -- it's that simple," Harper told a business dinner in Guangzhou.

Opponents of the pipeline say the risk of a pipeline rupture or tanker accident are too great. Harper's government brands some of the green groups as foreign-funded radicals.

China has already made clear it is very interested in buying Canadian oil, even though there is little chance crude would arrive inside the next decade. Regardless of how the Canadian energy regulator rules on Northern Gateway, the decision is likely to face a series of lengthy court challenges.

Harper had a cool attitude towards China when he took power in 2006, citing Beijing's record on human rights. In recent years, he has stressed the need for more trade to help Canada deal with economic woes in the United States and Europe.

Current bilateral trade is modest and in 2010 was less than C$60 billion ($60 billion), around a tenth of combined Canada-U.S. two-way trade.

Harper, leading the largest business delegation to China for almost 15 years, said China had "shown the world how to make a poor people rich" and predicted it would soon become the world's largest economy.

He also said he would continue to "raise issues of fundamental freedoms and human rights" in talks with China.

"Canada does not -- and cannot -- disconnect our trading relationship from fundamental national values," he said.

($1 = $1 Canadian)

(Reporting by David Ljunggren; Editing by Ken Wills)