Alberta's pick for premier will affect oilsands future, Canada's reputation

Alberta's provincial Tories'  new premier who will play an important national role in managing what many believe is both an economic lifeline and black eye for Canada — developing the carbon-intensive oilsands.

A potential new approach to oilsands production and addressing the environmental consequences.

The federal and provincial Tory governments have faced rapid fire from around the globe over the past five years over the growing ecological footprint of developing what critics have dubbed "dirty oil."

And the contenders in the race to be leader insist Alberta's next premier must be more proactive, in both action and words, to improve the province's and country's environmental credentials.

"The fact is that this is a legitimate conversation that needs to be had. It's not going to go away. We can't dismiss it and we shouldn't," said Alison Redford, the lone woman in the field of six candidates vying to replace Premier Ed Stelmach.

"We also have a responsibility to work in partnership with other provinces and with the federal government to make it as clean as we possibly can."

In the United States, lawmakers have lobbed scathing attacks at the oilsands and adopted clean-fuel standards that would exclude bitumen-derived petroleum.

Environmental groups and concerned citizens have launched repeated appeals — including during a two-week protest outside the White House — for the Obama administration to block construction of the Keystone XL pipeline that would ship oilsands crude from northern Alberta to the Texas Gulf Coast.

Hollywood director James Cameron, of Titanic and Avatar fame, visited the oilsands region in northern Alberta a year ago and warned Canada the resource could become "a curse" if governments fail to properly manage it.

Across the Atlantic Ocean, the European Parliament has taken shots at Canada for the high carbon dioxide emissions and overall environmental toll of extracting and producing the raw bitumen — a molasses-like form of crude oil.

While oilsands development poses mammoth environmental challenges for industry and governments, it's also helping drive the national economy, generating tens of thousands of jobs and billions of dollars in economic activity across the country.

The Canadian Energy Research Institute forecasts new oilsands development will contribute approximately $2.1 trillion to the Canadian economy over the next 25 years. The group also estimates the oilsands industry will pay more than $300 billion in federal taxes over the next quarter-century.

Gary Mar, Alberta's former trade representative in Washington and the front-runner in the race for the premiership, said the economic importance of the industry to the entire country can't be forgotten. However, he is calling for an independent, world-class environmental monitoring authority to examine oilsands development.

Mar said an independent panel, producing objective scientific data, is necessary if Alberta and Canada are to maintain a "social licence" to develop the oilsands — the second-largest proven oil reserves in the world next to Saudi Arabia.

"It shouldn't just be the government of Alberta saying we're doing a good job, nor can it be industry," said Mar, who's leading in the polls heading into the first ballot. If no candidate receives a majority of votes from PC party members on Saturday, a second preferential ballot with the top three hopefuls will be held Oct. 1.

"We want to assure Canadians . . . and we want to assure the rest of the world that we're doing this in a way that is environmentally responsible," he added.

Christopher Sands, a specialist in Canada-U.S. relations at the Hudson Institute, a think-tank in Washington, D.C., said Stelmach's departure opens the door for "a new conversation and a new face."

The next premier can improve the country's reputation and market access by adopting a more stringent regulatory regime that sends a message to lawmakers and environmental groups in the U.S. and abroad, he said.

Ottawa and Alberta also must get on the same page on oilsands development and promote a Team Canada approach, he added, rather than bickering over who has jurisdictional authority on environmental issues.

"Alberta can do something to make itself less of a target," Sands said. "It would make consumption of oilsands oil guilt-free, or more toward guilt-free."

Canada currently produces approximately 2.9 million barrels of oil per day, with about 1.6 million barrels coming from the oilsands. However, total oilsands production is expected to more than double to 3.7 million barrels a day by 2025.

Environment Canada data show the oilsands industry was responsible for approximately 6.5 per cent of the country's annual greenhouse gas emissions in 2009, the latest numbers available, up from five per cent the previous year. Overall oilsands emissions have grown nearly 300 per cent since 1990.

Ed Whittingham, executive director of the Pembina Institute, an Alberta-based environmental research group, said the leadership race has "huge implications" on Canada's environmental performance and the resource's future development.

The approach adopted by the next Alberta premier, he said, will also heavily influence whether Canada is able to meet its greenhouse gas targets of reducing emissions by 17 per cent below 2005 levels by 2020 — the same target as the Obama administration.

Whittingham noted Alberta isn't about to run out of hydrocarbons, but the province's and country's huge reliance on the oilsands leaves Canada vulnerable as more customers look for cheaper and lower-emission alternatives.

"The average Canadian should care because this is an increasing piece of our economy and it has been increasingly tied to Canada's reputation globally," Whittingham said.