This speech was given by the Honourable Joe Oliver, Minister of Natural Resources Canada, at the 2013 Energy and Mines Ministers’ Conference in Yellowknife, Northwest Territories on August 16, 2013.
Thank you Minister Ramsay, and good afternoon everyone. Thank you Premier McLeod and the people of Yellowknife for your hospitality and welcome. It’s wonderful for me to be back. “Spectacular” is an apt description of the Northwest Territories – and this city – and I am delighted that we are here for our important meetings.
Let me take this opportunity to recognize the great work of Premier McLeod’s government in developing a land use and sustainability framework that will guide planning in the Territories. I am pleased that my Department, Natural Resources Canada, was able to contribute to this initiative.
Le Nord est un élément fondamental du patrimoine, de l’identité et de l’avenir du Canada. En effet, le Nord s’avère l’endroit idéal pour tenir nos discussions en raison de tout ce qui entoure ses possibilités de développement économique et pour l’importance qu’on y accorde au respect de l’environnement.
The North is fundamental to Canada’s heritage, identity and future. Indeed, the North is the perfect setting for our discussions because of its history in both pursuing economic opportunity and respecting the environment. And its people know more than most about taking the long view. Honouring and preserving their inheritance. And building a vibrant economy for their children and grandchildren.
These are lessons we all need to understand at this pivotal moment of challenge and opportunity in our nation’s history. Because we are meeting at a time of great consequence. When the easy assumptions of the past are giving way to new realities. When critical decisions must be made – and a clear direction set.
Yogi Berra said that when you come to a fork in the road, take it. I admire his philosophy, but I think we need more direction.
So today, I want to talk about the choices before us – and the consequences that will flow from the decisions we make.
You all know the context. The global economy is changing. Rapidly. Dramatically. Emerging economies in Asia, Africa and South America are playing a larger and larger role.
The world is expected to consume more than three times as much aluminum and more than twice as much copper by 2025 than it did just 13 years ago, at the start of the new millennium. And, according to the International Energy Agency or IEA, global energy demand is projected to rise by over one-third by 2035[1]. Over 90 per cent of this growth is expected to come from non-OECD countries[2].
Between 2010 and 2035, China and India will account for over half of the global growth in energy demand[3]. China alone is expected to consume 77 per cent more energy than the United States by 2035[4] – and energy demand in India, Brazil and the Middle East should grow at an even faster rate than China’s. [5]
The next decade will be the first since the Industrial Revolution when emerging economies will add more to global energy growth than all of the developed countries combined, creating a fundamentally different global landscape for the natural resources sector.
At the same time – and close to home – there have been dramatic changes to the North American energy equation. New technologies are enabling new means of extraction in the United States, for shale gas and tight oil. The IEA forecasts that the United States will become the world’s largest oil producer by 2020 with over 11 million barrels per day– up from eight million barrels in 2011[6]. By then, the IEA expects America’s natural gas production will exceed its demand[7]. At the same time, energy efficient technologies are moderating energy demand in Canada and the U.S.
The result? Something that would have been unimaginable even five years ago – North American energy independence – is now on the horizon[8]. This is ushering in a very different supply-demand paradigm for Canada. Or to be less pretentious, we have one customer – 99 per cent of our crude and 100 per cent of our natural gas exports go to the U.S. – a customer that will be needing our commodities less in the future.
So this challenge forces us to confront an incredible opportunity. To expand our markets and supply what the world urgently needs. And reap enormous benefits now and for future generations.
As you know, over the next decade, hundreds of major resource projects, worth $650 billion, could come on stream here in Canada.
Si l’on considère l’hydroélectricité au Manitoba et à Terre-Neuve-et-Labrador, les nouveaux projets miniers en Nouvelle-Écosse, au Nouveau-Brunswick et dans le nord du Québec et le Cercle de feu en Ontario, les terres rares dans les Territoires du Nord-Ouest, le minerai de fer au Nunavut, les mines d’or au Yukon, les mines d’uranium en Saskatchewan, les sables bitumineux en Alberta et le gaz naturel liquéfié en Colombie-Britannique, peu de pays dans le monde peuvent se targuer de mener autant de projets de cette envergure liés aux ressources naturelles, et à un tel rythme de développement.
From hydroelectricity in Manitoba and Newfoundland and Labrador, to new mining projects in Nova Scotia, New Brunswick, Northern Quebec and the Ring of Fire in Ontario, to rare-earth elements in the Northwest Territories, iron ore in Nunavut, gold mines in Yukon, uranium mines in Saskatchewan, the oil sands in Alberta and liquefied natural gas in BC, few countries in the world are bringing on resource projects of this scale or at this pace.
But let’s be clear: more than ever, prosperity requires foresight – it is not a birthright. If we are going to seize the opportunities we need to act now – develop our resources, build the infrastructure, diversify our markets and lay the foundations for the future. So we have a choice – to proceed or procrastinate. We can roll up our sleeves or wring our hands. We can decide to get this done or we can dither – and watch the opportunities pass to others.
Because make no mistake, this moment – this opportunity – is perishable. It will not last forever. And it does not exist just for us. So we have to organize ourselves for success. We need to implement the policies that will make this happen. And we have to do it together.
That means engaging Canadians, explaining the benefits, addressing legitimate concerns and earning the trust, the “social licence”, essential for future progress. Let me be clear on this matter as well. I understand, our government understands, how much preserving Canada’s natural beauty and natural heritage matters to Canadians, including in particular our aboriginal peoples, whose traditions and livelihoods are tied to the land and the water. I just returned from the Prime Minister’s 8th Northern Tour, where we spoke to Inuit communities right across the North, so we definitely do understand. We have a wonderful once-in-a-lifetime opportunity to create prosperity and security now and for future generations, but only if it can be accomplished safely for Canadians and safely for the environment.
Our Government is putting in place building blocks to meet this challenge at the federal level. We have brought certainty and predictability to the regulatory regime through our Responsible Resource Development initiative. We are strengthening environmental standards, in the offshore, along pipeline routes and in our harbours. The overarching goal? Nothing less than world-class environmental protection. Enforced by transparent regulation. Grounded in the best science. And supported by cutting edge technology.
Our focus is on those projects where the environmental footprint is largest or the risk greatest. And, in the low probability of an incident, ensuring that the response is swift and the cleanup comprehensive.
We will be enshrining in law the principle of “polluter pays” so that Canadian taxpayers will not bear the costs of others’ mistakes. For major pipelines, operators must demonstrate $1 billion in liquid assets. For the offshore, $1 billion in absolute liability. For tanker traffic, an independent expert panel will soon provide its advice, but rest assured we will meet international standards or more. And as technology improves, we are committed to keep moving forward, to assure we stay where we must be, first class.
Of course, preparing for success means ensuring that our resources don’t become landlocked. To transport them to tidewater – and international markets – pipelines have been proposed that could move crude from the oil sands to the Pacific coast.
Comme vous le savez, des propositions sont sur la table concernant deux oléoducs pour transporter le pétrole de l’Ouest canadien vers les raffineries du Québec et du Canada atlantique. Le débit de la ligne numéro 9 d’Enbridge serait inversé et le gazoduc principal de TransCanada serait converti en oléoduc. Ces initiatives importantes, en attente de l’approbation réglementaire requise, auraient l’avantage de garantir l’indépendance du Canada en matière d’énergie, de créer des emplois et de nous ouvrir les portes des marchés internationaux.
As you know, there are proposals from two existing pipelines to bring oil from Western Canada to refineries in Québec and Atlantic Canada. Enbridge’s number 9 line would reverse the flow and TransCanada’s mainline would convert from gas to oil. These are important initiatives that, subject to regulatory approval, would enhance Canadian energy independence, create jobs and reach international markets.
Three liquified natural gas projects have the required long-term export licence to export LNG to Asian markets. There are over a half dozen LNG export terminals proposed for the West Coast, the first of which could be operational in 2015.
And, of course, there is the proposed Keystone XL Pipeline, which would move Canadian oil to American markets, create jobs and enhance energy security on both sides of the border.
All these initiatives could contribute to achieving the potential of our enormous natural resources.
But at the same time, we are hearing objections from those who see resource development and responsible environmental stewardship as an either/or zero sum game. Let me be clear, I am not talking about the many Canadians, including our aboriginal peoples, who have legitimate concerns about environmental safety and are open to a fact and science based discussion.
My objection is to those who oppose virtually every form of resource development, whose opinions are not based on facts and whose vision is simply too limited.
My friends, Canada was not built by naysayers. It was built by women and men who dared greatly. Took on big challenges. And applied their ingenuity to overcome them.
Just imagine how different our history would have been if we had said “no” to building the great railroad across an unforgiving terrain – through swamps and streams, hard granite and high mountains. An undertaking that spanned a continent, amazed the world and made Confederation possible.
Imaginez si nous avions refusé le projet de la Voie maritime du Saint-Laurent – un exploit technique exceptionnel du 20e siècle – qui permet d’élever les navires de 100 mètres pour franchir l’escarpement du Niagara; une route maritime par laquelle ont circulé des marchandises évaluées à plus de 375 milliards de dollars depuis son ouverture.
Que serait-il advenu si nous avions examiné les plans de développement du complexe hydroélectrique de la baie James et conclu : « le terrain est trop accidenté; il sera trop difficile de faire les levés; les aspects techniques sont trop complexes; l’impact sur l’environnement est trop important »?
Imagine if we had said no to the St. Lawrence Seaway – one of the outstanding engineering feats of the 20th century – lifting ships 100 meters over the Niagara Escarpment. A marine highway which has moved more than $375 billion worth of cargo since its opening.
What if we had looked at the development of the James Bay hydroelectricity complex and said, “the terrain is too difficult, the surveying too challenging, the engineering too hard, the environmental impact too great.”
We would have lost the chance to build one of the largest hydroelectric undertakings in the world – the watershed of La Grande Rivière covering an area twice the size of Scotland. A project that today has a generating capacity of over 17,000 megawatts of renewable electricity, critical in achieving that 77% of Canada’s electricity comes from non-emitting sources, among the highest in the world.
In everyone of these examples – and many more – the odds were long. The challenges great. And the opposition fierce. The railroad called “an act of insane recklessness” by one of the leading figures of the day. But in each case, Canadians responded with the eloquence of action. We determined that with imagination and effort, innovation and initiative, we could succeed. And we did. Building our nation – and the prosperity – we enjoy today.
“Nation-building” is not confined to our history, an echo from our past. It is our obligation to the future. And every generation must honour that obligation.
Another obligation we must honour is to the environment, which is our first thought in every major project we undertake. And that is how it should be. What’s more, we have learned that environmental responsibility breeds innovation, which in turn improves environmental performance and economic growth. Creating a virtuous circle that leads to better economic and environmental outcomes. We have seen this in the oil sands, where innovation has lowered greenhouse gas emissions by 26 per cent per barrel since 1990.
So our commitment to the environment is clear – and so too is our obligation to create opportunity and prosperity for our people.
We all understand the importance of natural resources. Directly and indirectly it accounts for 1.8 million jobs, almost a fifth of our economy, $30 billion in revenue to governments to support critical social programs and over half our exports. Behind those numbers are people. People with jobs that support families, build communities and lay the foundation for the future.
And nowhere is that truer than for the Dene, the Inuvialuit and Métis here in the North. We know that where development takes place, jobs take root – and social infrastructure flourishes. That is true at the Diavik Diamond Mine, where at year-end, 22 of 32 apprentices were Aboriginal and over 200 Aboriginals found jobs and opportunity.
It is true in Alberta, where the Fort McKay First Nations struggled with 75% unemployment just a generation ago, but which today runs a multi-million dollar business serving Fort McMurray and the oil sands.
But the reverse is also true – where development is deferred, communities suffer from loss of opportunity. The Mackenzie gas project represented a tremendous opportunity for Aboriginal partners. But the regulatory review took almost a decade to complete. By the time it was done, the opportunity had passed ─ an irretrievable loss for an entire generation.
Resource projects can turn the high costs of isolation into the advantage of proximity for Aboriginal communities. In fact, most of aboriginal communities are located within 200 kilometers of mines and exploration properties.
Just think about what that can mean to Aboriginal men and women and their families. It is not just about earning an income for 20 years. It is about re-setting life’s conditions, opening opportunities for children, improving prospects for education and creating advantages that extend far into the future.
And so it can be for all Canadians. Because, as we have learned from the past, these initiatives benefit us all.
By moving forward and seizing opportunities, by responsibly developing the full potential of our resources over the next 25 years, we can build a stronger, more vibrant, more competitive economy. We can create hundreds of thousands of new jobs, providing higher incomes for this generation and the next.
And, at the same time, we can generate revenues that support the health care, pensions and education that lie at the heart of our commitments to one another.
My friends, we have the chance to turn this moment of opportunity into decades of prosperity. To answer the call of nation-building once again.
Doing so requires that we be strategic. Focused. And it means setting priorities to:
• .. Build infrastructure so our oil and gas can reach new markets;
• .. Earn public trust through world-class environmental protection;
• .. Create conditions for Aboriginal peoples to participate in the prosperity;
• .. Strengthen our relationships with global partners, and
• .. Accelerate innovation in energy and mining.
I know we can develop our resources responsibly. Because overcoming challenges is what Canadians do best – and what we’ve done throughout our history. It is in our DNA. It is who we are. It is time to remember that and build for a better tomorrow.