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Energy and Resources Jim Carr and the Liberal government seek tricky balance between climate and energy

Jim Carr, Minister of Natural Resources, delivers a statement on TransCanada’s decision to cancel the Energy East Pipeline project on Parliament Hill in Ottawa on Thursday.

Sean Kilpatrick/THE CANADIAN PRESS

The Liberal government is attempting to move past the divisive debate on pipelines by forging a national energy strategy that promotes the transition to a low-carbon economy while supporting oil-and-gas development.

In Winnipeg this week, Natural Resources Minister Jim Carr will convene a two-day conference on how to implement the policies and adopt the new technology needed to move to an affordable, low-carbon energy economy. Still, Mr. Carr said Canada's oil-and-gas resources remain important economic advantages for the country, and the industry needs to innovate to tap them in a sustainable manner. Supporting the energy sector while advancing climate objectives is a tricky balance for the government. Just days ago, TransCanada Corp.'s decision to kill its Energy East oil pipeline project highlighted the deep divisions in the country over policies on energy and reducing emissions of greenhouse gases.

Climate activists decry the government's support for other pipeline expansions, industry supporters insist environmental rules are stifling economic development, and the Liberals are eager to find a middle ground.

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"There has to be at the same time a sense of urgency [on fighting climate change] and a sense of pragmatism as to what is possible to achieve," Mr. Carr said in an interview in Parliament's Centre Bloc.

"No one wants dislocation. We want the transition to be at a pace that the Canadian economy can not only withstand but benefit. And we make the argument the transition also has economic growth possibilities."

His Winnipeg gathering will include provincial energy ministers, executives from the oil-and-gas, electricity and clean-tech sectors, Indigenous leaders and representatives of environmental think tanks. Young professionals and members of the general public have also been invited.

The minister said it is crucial to have a national dialogue if the country is going to build consensus on the long-term need for fundamental changes to the energy sector, which has provided prosperity for generations of Canadians.

"You need to be always mindful that you must bring the people with you," he said. "If you lose the support of the people, your capacity to affect real change is minimized."

The resources minister – who once headed the Business Council of Manitoba – was speaking just down the hall from the House of Commons, where Conservative MPs were accusing the Liberals of putting up onerous roadblocks that caused the cancellation of the Energy East proposal and other resource developments.

Mr. Carr blames "market conditions," including a prolonged slump in oil and gas prices, for companies' decisions to shelve energy megaprojects.

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The furor over Energy East underscores the government's challenge in forging a national energy strategy with provinces and territories that is anything more than vague, feel-good principles.

Provinces and territories concluded an energy strategy in 2015, but Conservative prime minister Stephen Harper refused to join the negotiations.

Prime Minister Justin Trudeau brought together most provinces to agree last December on a "pan-Canadian framework on clean growth and climate change," which committed governments to broad goals that include carbon pricing, new regulations and spending measures and tougher standards.

Mr. Carr's colleague, Environment and Climate Change Minister Catherine McKenna, is leading the effort to regulate industry, the building sector and transportation fuel use to encourage reductions in greenhouse gas emissions and boost deployment of clean technology.

Mr. Carr expresses hope his effort will help forge consensus among federal and provincial governments, Indigenous leaders and energy companies on the concrete measures that must be adopted in the coming years to meet the long-term commitments to dramatically reduce carbon emissions.

However, the tradeoffs and deal-making that underpinned the pan-Canadian framework are being threatened.

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Alberta Premier Rachel Notley agreed to raise her province's carbon price in exchange for approval of the Trans Mountain pipeline expansion, which would triple the capacity of the existing oil export pipeline to the Pacific Coast. British Columbia's new NDP government opposes the project.

Conservative politicians and some members of the business community are turning up the heat on the Liberal government, arguing Canada cannot afford costly environmental rules when U.S. President Donald Trump wants to slash regulations and business costs in the United States.

Mr. Carr insisted the world is moving toward low-carbon technology, saying he is working with U.S. Energy Secretary Rick Perry on a North American strategy that will support energy efficiency, renewable technology and carbon capture and storage.

However, while some new developments are encouraging, the oil sands industry generally remains one of the most carbon-intensive, high-cost sources of crude in the world. As the governments around the world push the development of electric cars and other low-carbon transportation, the key question is whether the Canadian producers can win a share of what may be, in the next decade, a declining global market for oil.

"The development of the oil sands in Alberta came as a result of innovation, and innovation also will lead the transition," Mr. Carr said.

"And I have a lot of confidence in the creativity of Canadians, particularly in western Canada, who have so much experience in the development of resources, to lead."

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