Canada oil sector must keep cleaning up act: Prentice

Mon Nov 21, 2011 3:30pm EST
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - The U.S.-imposed delay of TransCanada Corp's Keystone XL oil pipeline shows Canada's energy industry cannot relax efforts to improve its environmental record, a former top minister in Prime Minister Stephen Harper's government said on Monday.

The U.S. move has also helped build consensus that the oil industry must lessen its near-total export reliance on the U.S. market, said Jim Prentice, who left the Conservative government last year to become vice-chairman of Canadian Imperial Bank of Commerce.

As environment minister in 2010, Prentice stirred some controversy in his home base of Calgary by telling an industry audience that the national and international perception of northern Alberta's oil sands was "profoundly negative" and that companies developing the resource, the world's third-biggest reserve of crude oil, must boost efforts to improve environmental performance.

"I think there's been substantial progress made, but I think as events have unfolded, both in the United States on Keystone and on other issues, it highlights how important it is that Canada be not only a producer of energy, but an environmentally responsible producer of energy," he said in an interview. "That has to be the space that we occupy."

That will require constant investment in improving technology to reduce the oil sands' impact on air, land and water, he said.

"It's not a final destination that you can say we've reached and then just carry on. It doesn't ever end, really," he said.

This month, the U.S. State Department pushed back its review of TransCanada's $7 billion Keystone pipeline to Texas from the oil sands by more than a year to study a new route away from the environmentally sensitive Sand Hills region of Nebraska.

Green groups claimed the delay as a major victory in their fight against increased development of the tar sands, which they see as a threat to the fight against global warming. TransCanada and the Canadian government have said they still expect the project to proceed because a U.S. environmental study has shown it would have only limited impact and because it would create thousands of jobs.   Continued...