U.S. Ambassador pushes for easier access to Canadian energy reserves

JAMES STEVENSON <a href=www.canada.com>Canadian Press Friday, May 09, 2003

CALGARY (CP) - America wants more Canadian energy and regulatory rules need to be streamlined to allow that to happen, U.S. Ambassador Paul Cellucci said Friday.

Capping off a visit to Canada's oilpatch nerve centre, Cellucci told the Calgary Chamber of Commerce that the United States needs easier access to the oil, gas and electricity reserves of its northern neighbour.

"We want to be less dependent on Venezuela, where they turned the spigot off a few months ago; We want to be less dependent on the Middle East," said Cellucci.

"We know that we have the resources here in North America to fuel the economies of Canada, the U.S. and Mexico," he said.

"And we need a regulatory climate that encourages investment not only of the source, but of the transmission of this energy as well."

After the speech, Cellucci said the U.S. expects to import nearly 1 million barrels of oil per day from the northern Alberta oilsands, and that number will likely double within the next decade.

The U.S. recently changed its global energy reserve estimates to recognize the oilsands as proven reserves. This bumped Canadian oil reserves from five to 180 billion barrels, placing Canada number two in the world behind Saudi Arabia.

Washington also believes that access to large natural gas reserves in Alaska and the Mackenzie Delta region of the Northwest Territories is vital to its future energy needs.

Yet the energy companies behind both the $4-billion Mackenzie valley pipeline proposal and the estimated $20-billion US Alaska highway project have not even filed for regulatory approval yet - a complex step needed before construction can begin.

"It's pretty clear to us that we're going to need gas from both areas," said Cellucci, adding that the U.S. was in favour of a quick permitting process.

Demand for natural gas continues to grow in North America as more new power plants are using cleaner-burning natural gas instead of coal. But conventional supplies are quickly drying up.

When the top energy regulators for Canada, the U.S. and Mexico met earlier this week in Banff, Alta., they agreed that strong demand coupled with scarcity of new supplies would keep the price and consumers' gas bills highly volatile for at least the next three years.

During his visit to Calgary, Cellucci also met with Ralph Klein to "personally thank him" for the Alberta premier's support of the U.S.-led war in Iraq contrary to Ottawa's position.

But Cellucci's appearance was not without protest, as a small group of people huddled together against a May snowstorm and waved anti-U.S. placards.

"Canada's been a trading nation for 150 years and we've never been opposed to trade as workers or as an organization," said Gord Christie of the Calgary and District Labour Council.

"But we want fair trade, not these free trade agreements and this giving away our resources under the guise of free-trade."