Canada's buoyant Greens say they don't favor oil sands shutdown

OTTAWA (Reuters) - The leader of Canada’s small Green Party, which has a long-shot chance of holding the balance of power after the country’s Oct. 19 election, said on Friday she does not favor shutting down the Alberta oil sands, a favorite target of environmentalists.

Canada's Green Party leader Elizabeth May speaks during the Maclean's National Leaders debate in Toronto, August 6, 2015. Canadians go to the polls in a national election on October 19, 2015. REUTERS/Mark Blinch

Elizabeth May, fresh from a praised performance in the opening election debate on Thursday, said her party instead wants the energy industry to upgrade bitumen from the sands at home rather than shipping it raw to be refined abroad.

“We need to be smart about this and none of the smart answers say you must shut down the oil sands today,” she said in a phone interview.

Polls show the center-right Conservatives could lose their majority in the House of Commons in the election, possibly allowing the opposition New Democrats and Liberals to work out a deal to take power.

The Greens, with just two legislators, have normally won less than 10 percent of the vote. But they have strong support in parts of British Columbia and if they gain enough seats could play kingmaker.

May said she could “almost see no circumstances” under which she would support a government led by Conservative Prime Minister Stephen Harper, who opponents say has weakened environmental regulations.

She said any party hoping for Green support would have to agree to strengthen regulation and commit to a proportional representation system of voting. Canada’s current first-past-the-post system makes it hard for small parties to win seats.

“We’re very pragmatic as Greens ... we are not zealots. We are serious about government,” May said.

The Canadian Association of Petroleum Producers forecasts oil output will rise to 5.3 million barrels per day by 2030 from 2.2 million barrels in 2014. Much of this would be unrefined bitumen from the oil sands, where extraction techniques create high carbon emissions and other pollution problems.

“We don’t want rapid growth of the oil sands, for sure,” May said. But she noted new upgraders in Alberta would mean more jobs and higher-value exports.

Energy companies say new refineries are unlikely, citing enormous cost. Asked whether Ottawa could offer aid for new plants, May said it was too early to discuss specific ideas.

The Greens oppose four major proposed oil sands pipelines: TransCanada Corp’s Keystone XL and Energy East projects, Enbridge Inc’s Northern Gateway, and Kinder Morgan Inc’s plan to increase the capacity of its Trans Mountain pipeline.

Editing by Jeffrey Hodgson; and Peter Galloway