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OTTAWA – he politics of pipeline expansion in Canada are shifting again, as the federal NDP – which strongly opposes plans for a Northern Gateway pipeline to the Pacific coast – is now pledging its full support for a pipeline that would see Alberta oil pumped to Eastern Canada.
In a speech to the Canadian Club of Toronto at the Royal York Hotel, NDP Leader Thomas Mulcair gave his clearest sign of support yet for the notion of a west-to-east pipeline that would allow western producers to receive higher prices for their crude and refiners in Eastern Canada to replace imported supplies of oil with North American product.
The comments also highlight how politics is shifting the debate over pipelines for western oil, as even Conservative supporters including former federal minister Jim Prentice have criticized Ottawa’s approach to pipelines that would carry Alberta bitumen through British Columbia for export to the Pacific Rim market.
While political momentum is building against the Northern Gateway pipeline, provincial and federal political leaders of various stripes are lining up in favour of a focus on the east. The federal Conservatives, New Democrats and Liberals are all in favour of having western crude refined and exported in the east.
Parts of the project are already under way as Canada’s energy sector searches for ways around a current glut of supply in the U.S. Midwest, but the industry sees the eastern link as a complement to a new western line, not an alternative. With oil sands production set to double in the next 10 years, firms are looking to expand their ability to ship crude south to the U.S., west to Asia, and east to Quebec and Atlantic Canada.
In a speech aimed at easing fears that his party is opposed to oil sands development, Mr. Mulcair said shipping western oil to Eastern Canada is a “pro-business, common sense solution” that will create jobs and boost the country’s energy security.
Mr. Mulcair later told reporters he has long said he would not speak against the oil sands expansion. “I said you have to include the environmental price in the way you are doing it and enforce legislation,” he said. He said he would not “back down” from the argument behind the “Dutch disease” theory – that western energy developers are not paying the full cost of the environmental consequences of their projects. He said this is leading to an artificially high Canadian dollar, which hurts other sectors of the economy.
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