Alberta seeks observer status on OPEC, bypassing Ottawa

Read article By PATRICK BRETHOUR Wednesday, March 26, 2003 - Page B1

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CALGARY -- Alberta plans to go solo on the stage of world oil politics, bypassing Ottawa to limit the fallout from what it says is the federal government's anti-American rhetoric and "punitive" energy policies.

The province is speaking with members of the Organization of Petroleum Exporting Countries about obtaining observer status within the cartel, Alberta Energy Minister Murray Smith said.

That would be a first for OPEC, where observer status has been extended only to national governments, such as Russia.

Alberta also plans to meet formally with the International Energy Agency, which advises Canada and 25 other industrialized countries on energy policy.

In both cases, Alberta will be acting alone, Mr. Smith said, adding that he has no intention of checking in with the federal government.

Some provinces attend international forums in concert with the federal government, but the Department of Foreign Affairs and International Trade said it is not aware of any instance in which a province has participated in such bodies by itself.

However, Alberta is looking to dissociate itself from Ottawa's stance on the war in Iraq, particularly comments last week by Natural Resources Minister Herb Dhaliwal that U.S. President George W. Bush is a failed statesman.

"We're working hard to repair the damage that Mr. Dhaliwal has done in our trade relationship with the United States," Mr. Smith said.

Mr. Dhaliwal heads the federal ministry chiefly responsible for energy policy.

The Prime Minister's Office said the federal government is responsible for international relations, echoing its rebuff last week of Alberta Premier Ralph Klein's public support for the U.S. war effort.

"In terms of foreign policy, the Prime Minister and the Foreign Minister speak for Canada," said PMO spokesman Jim Munson.

Alberta has often clashed with Ottawa over the oil patch, the most recent battle being the debate over ratification of the Kyoto Protocol, aimed at reducing greenhouse gas emissions.

Yesterday, Mr. Smith said Kyoto was one of the main motivations for the province in contemplating a seat at OPEC meetings.

"We're always concerned about the notoriously inept energy policy that comes from Ottawa, so we look for ways to build bridges, to build dialogue," he said.

The subject first arose in December, when an influential energy industry journal published estimates of national oil reserves that included Alberta's oil sands for the first time -- giving Canada the world's second-largest reserves, after Saudi Arabia.

OPEC's entire purpose is to manage world oil supplies in order to maximize its members' revenues, but Mr. Smith said he did not see Alberta joining in the cartel's efforts to control production.

Right now, Alberta regulates the oil sector, but does not dictate output levels.

The Canadian Association of Petroleum Producers said it could be helpful for Alberta to have first-hand information on OPEC deliberations, but vice-president Greg Stringham said he did not foresee the province attempting to micromanage crude production.

As for meetings with the IEA, Mr. Smith said Alberta is looking to gain a better understanding of how energy demand will change after the war in Iraq ends.

OPEC is largely made up of producers from the Middle East and North Africa, but it also counts Nigeria, Indonesia and Venezuela among its member nations.