* Alberta, New Brunswick premiers cooperate on pipeline
* New Brunswick offers huge refinery, deep-water port
* Redford won't discuss ways to smooth way for Keystone
By Jeffrey Jones
CALGARY, Alberta, Feb 5 The premiers of oil-rich
Alberta and New Brunswick agreed on Tuesday to cooperate on
promoting a cross-Canada pipeline to move heavy oil to the
Atlantic seaboard as delays in projects to export the fuel
generate deep price discounts.
Alberta's Alison Redford and David Alward of New Brunswick
met with energy executives this week to discuss concepts for
shipping the oil sands-derived crude as far as the Irving Oil
refinery in Saint John, New Brunswick, Canada's largest, and to
international markets through that city's deep-water port.
The talks come as Washington decides whether to approve
TransCanada Corp's long-delayed Keystone XL pipeline to
the U.S. Gulf Coast and as Canadian regulators consider Enbridge
Inc's contentious North Gateway pipeline to the Pacific
Coast. Both are well behind their initial schedules.
Redford has devoted time and effort trying to convince
Canadians across the country that oil sands development is
beneficial for the national economy, and now envisions a big
opportunity for moving the supply to a market seen as unworkable
even two years ago.
"The time we've spent together working with industry leaders
from companies that are producing in the oil sands to pipeline
companies that are interested in these initiatives, it's all
playing into what we know is important for Alberta, which is
getting access to world markets to ensure that we get the best
price that we can for our product," Redford told reporters.
She said last month that tight pipeline capacity to
traditional markets such as the U.S. Midwest, and delays in
moving forward with major new projects, were resulting in prices
for Alberta heavy crude that are less than half the value of
international Brent oil.
That has led to a C$6 billion ($6 billion) shortfall in
expected revenues for the province's upcoming budget. Redford
warned she faces tough measures to prevent a spiraling deficit.
Alward said New Brunswick is open to opportunities to get
the crude to Irving's 300,000 barrel a day refinery, which now
runs the more expensive imported oil, and to discuss using the
Canaport harbor facility in Saint John as an export point.
"That port is the deepest water port on the Eastern
Seaboard. It is also ice-free. We have a 60-year tradition of
handling the world's largest ships in and out," said Alward, who
toured oil sands developments in northern Alberta on Sunday.
Redford has also agreed to talk about the prospects for
shipping Alberta oil to Quebec with Premier Pauline Marois.
She is forging the links within her own country as the Obama
administration moves closer to deciding whether to approve the
Keystone XL project, following its initial rejection last year.
A U.S. government source told Reuters last week that a decision
may not be made until early summer.
MUM ON KEYSTONE CONCESSIONS
Redford declined to say what new environmental initiatives
Alberta might be prepared to undertake in the oil sands to help
convince Washington officials, including new Secretary of State
John Kerry, that the pipeline will not trigger a major increase
in pollution and carbon emissions.
Alberta's new envoy to Washington said on Monday that the
province has "much more in our toolbox" but did not elaborate.
The premier pointed to moves she said have already shown
Alberta's commitment to improving environmental performance,
including expanding water monitoring and establishing a land-use
plan for the production region.
"The record that we have stands for itself. I think that as
we move forward we'll be watching the process very closely, but
I won't answer a hypothetical question," she said.
Alberta could help make the oil sands more palatable for the
United States by raising its levy on carbon, currently set at
C$15 per tonne, to a level that would drive more emission
reductions, said Simon Dyer, policy director at the Pembina
Institute, an environmental think tank.
It could also mandate carbon capture and storage for oil
sands projects, Dyer said.
"The Keystone battle is really about failure of Alberta and
Canada to regulate greenhouse gas emissions for the oil sands,"
he said. "Clearly, if Alberta and Canada can really defensibly
show how oil sands expansion is actually consistent with Canada
meeting its international obligations, that would go a long way
to addressing these concerns."