2007/83

Notes for a Speech by

The Honourable Gary Lunn, P.C., M.P.

Minister of Natural Resources

to the

Canadian Energy Pipeline Association

2007 CEPA 13^th Annual Dinner

Calgary, Alberta
September 12, 2007

Check against delivery

It is a great pleasure to be here. I last spoke to many of you at the CGA Executive Forum on Energy Solutions early in June in Ottawa. And there has been a lot of activity in Canada since that time.

We had the North American leaders' summit a few weeks ago in Montebello, where energy issues were high on the agenda. As a lead-up to that, I had the opportunity to host my energy counterparts from Washington and Mexico in Victoria. It was a very successful meeting.

Two weeks from now, I'll meet with my provincial colleagues, the ministers of energy, in British Columbia for a federal/provincial meeting.

And there's no question a lot of the issues that directly affect you will be on the agenda. One of the priorities, and I look forward to discussing this a little bit later with you, is regulatory reform.

Other priorities include North American energy security; environmental protection; improving our competitiveness; and as I said, making our regulatory system more efficient.

Over the past year, I've frequently discussed how Canada is emerging as an energy super power. But the challenge before us is really to become a clean energy super power.

Just look at just how much energy contributes to our economy and the amount of energy that we export every year – somewhere in the magnitude of $85 billion to $100 billion. And the anchor to this is really right here in Calgary and Alberta. When Calgary succeeds, when Alberta succeeds, the whole country succeeds.

It's so important that we remind everyone of this. It's so important that we recognize the direct impact that energy has on the economy of the whole country.

Look at the industrial sector in Ontario. Twenty percent of its industrial base is directly supported by the oil and gas sector here in Alberta. Look at the service sector in Quebec – five percent support. And it goes on and on right across the country.

You know, we often hear people talk about how the energy sector is really an Alberta industry. But I think it's truly a Canadian industry and one that’s very important to all of us. And then I got to thinking about this, you know, $85 billion to $100 billion a year in exports – which gives us tremendous wealth – tremendous opportunities for our way of life, and impacts all of us.

How do we export that? The vast majority of this energy, oil and natural gas, goes through pipelines. We don't hear a lot about them; we don't see a lot about them. A pipeline is not necessarily high profile in the news. But it's such an important part of our economy.

Without having a transportation mechanism to deliver these products to markets where would we be? And so your organization is to be commended for your leadership and thanked for our economic prosperity.

You know, I'm sure you're aware of all the stats, that oil and gas account for more than 80 percent of our trade surplus. We have been the number one supplier of oil and gas to the United States. We've been number one for eight consecutive years.

In 2006, Canada's oil exports to the U.S. grew by six percent over the previous year. Today, we're supplying over 2.3 million barrels of day… a day. And that's going to continue to grow.

We often hear from people who say they want the growth to slow down. I say let the market decide what the appropriate amount of growth is. We have to let the market decide. The market is the anchor of our economy. It's the cornerstone in every sector.

Canadian consumers are aware that just about everything they buy and consume at some point moves by truck. They don't think about the importance of the pipeline.

A secure, reliable source of energy is important to everyone and to every single sector. The pipelines, which are managed by you, do a great job.

The member companies of your association, with some of the 100,000 kilometres of pipeline, transport 97 percent of Canada's crude oil and natural gas. Sixty percent of that goes to the United States. Just think about that – a 100,000 kilometres of pipeline – it's really astonishing when you think about it.

Canada and the United States are deeply integrated in the areas of energy. There are 32 natural gas pipelines, 22 oil pipelines, and 51 electricity transmission lines that cross our borders. You add this to the tremendous increase in U.S. demand for our energy and you have the making of even stronger ties between our two countries.

Because of this, a stronger Canadian pipeline industry is vital to the long-term prosperity of energy producers and consumers throughout North America. It's absolutely crucial. And I want you to know that our government is well aware of your role and the importance, and that we are working with you to support your needs and your future expansion plans.

CEPA has told us that its members expect to double their collective assets over the next 15 years to bring new energy supplies to the North American market. You've asked the government to focus on improving Canada's competitiveness and regulatory efficiency to create better investment environment. We're doing this.

In our last budget, we announced $150 million over the next five years to create, as we call, the MPMO, the Major Projects Management Office. We have to do a better job. As I say, it's a priority at the upcoming federal/provincial/territorial energy ministers' meeting.

Look at what we put many companies through just at the federal level with multiple layers – so many departments for the resource sectors to deal with – Environment Canada, Industry Canada, Natural Resources, DFO, and others. Quite often you’re forced to go through multiple regulatory approval processes, which literally can take years and create uncertainty.

I absolutely recognize that you cannot manage the uncertainty. You cannot put that into your business plan. But you can manage certainty.

If you know at the outset that the regulatory approval process will take six months or a year for a decision, you can plan around that. You can put that into your business plan as you're trying to attract literally billions of dollars in capital investment.

That's why our government is committed to moving this project forward. I'm the minister responsible, and I'm very pleased to report that we are moving along.

We've got great people heading up this project. And we’re putting the money needed into it.

It has to be about process. It has to be about streamlining the current processes. And that's exactly what we're committed to do.

As a first step, we'll create a single point of entry. When you begin regulatory approvals you'll know that you're dealing with one office. It'll be managed by that one office and we can cut approval times in half without compromising the integrity of those processes.

But eventually, I absolutely believe that we have to get to a single process to ensure that these energy projects can move forward in a timely manner. And you have my commitment that this will happen. Again, it’s crucial to our economy.

Let me just touch briefly on the environmental regulations. As you know, we undertook, shortly after taking office, to regulate both greenhouse gases and pollution. We’ve had extensive consultations with every sector, and there's a lot more work that needs to be done.

We're aware of your concerns. We're listening. We're hearing them loud and clear. Your associations are working with us. We know there are officials from the federal government out there in consultations now with your sectors. I just want you to know that the people that represent you in Ottawa are looking after your interests.

I believe we can make gains. As the Prime Minister has said very clearly, this has to be a balanced approach. We can reduce our greenhouse

gases, we can reduce our environmental footprint, while allowing economic growth. This is something that we're absolutely committed to doing.

I know some of you have had frustrations with the process that is ongoing. I want you to be assured that we're very much aware of those frustrations and we're working to ensure that the process we end up with will allow you to continue to attract investments, to continue to succeed, to continue to see growth throughout the entire energy sector and to ensure that our whole national economy can grow.

I’d like to touch briefly on S&T. I look at some of the work underway with next-generation technologies – whether it is clean coal or the latest energy efficiency technologies or improvements in how you move product through your pipeline. It's so important that we succeed in these areas. Again, our government is committed to working with you, to ensuring that this happens.

You know, 80 to 85 percent of all of our greenhouse gases and pollution comes from energy, both in the production and the consumption side. But by working together, I'm convinced we can succeed, and we can move forward in a balanced approach and make real gains. That's something that's crucial to the welfare of our entire country, to ensure that we can continue to have the economic prosperity that we have today.

I also want to acknowledge the great work that's being done by the beneficiaries of your annual dinner, Engineers Without Borders, in helping people in developing countries access technologies that will improve their lives. Again, simply technologies can make a big difference. I think it's fabulous. It's great to see that your organization is supporting the work that they do.

And I’ll conclude by saying that you have my absolute commitment to work with you, each and every one of you, to ensure your success, and that we can make the gains that we need to make. Thank you very much for having me. I’ve enjoyed the opportunity to speak to you and I look forward to your answering your questions.