The Prime Minister met and lunched with President Obama and Mexican president Felipe Calderon today at the White House. At the press conference in the Rose Garden afterward, he was asked about trade and his views of Obama’s leadership on foreign policy. Keystone XL and the oil sands were not mentioned. But the issue took center stage later when Harper made participated in a one-hour question-and-answer interview with former Democratic congresswoman, Jane Harman, who now heads the Woodrow Wilson Center, a think-tank in Washington, home to the Canada Institute, [link corrected] which organized the event.
While the Obama administration continues to consider whether to permit the Keystone XL pipeline from Alberta to the Gulf Coast, the prime minister made some of the toughest energy remarks that I’ve heard him aim at a US audience.
His bottom-line to the Washington audience seemed to be:
1) Canada’s primary interest is not contributing “North American energy self-sufficiency” but to diversifying markets for Canadian oil exports;
2) Canadian producers receive a discounted price for their oil because they are “captive suppliers” and therefore Canada cannot “afford” to keep the US as its only market.
3) His government intends to build a pipeline to the West Coast to enable exports to Asia regardless of whether or not the Keystone XL pipeline gets approved.
Harman asked whether Harper could see Canada and Mexico contributing to a situation where North American could achieve energy “security” or “self-sufficiency” and independent from Middle Eastern oil. [See my magazine story on the prospects for this here.]
Half-way through his answer, Harper said this:
I’ve got to say that Canada’s interests here are a little bit different, and particularly—I might as well be frank with you—in light of the interim decision on Keystone. What it really has highlighted for Canada is that our issue when it comes to energy and energy security is not North American self-sufficiency; our energy issue is a necessity of diversifying our energy export markets.
We cannot be, as a country, in a situation where really our one and, in many cases, almost only energy partner could say no to our energy products. We just cannot be in that kind of position.
And the truth of the matter is that when it comes to oil in particular, we do face a significant discount in the marketplace because of the fact that we’re a captive supplier.
So we have made it clear to the people of Canada one of our national priorities is to make sure that we have the infrastructure and the capacity to export our energy products outside of North America. Now, look, we’re still going to be a major supplier to the United States. It’ll be a long time, if ever, before the United States isn’t our number one export market. But for us, the United States cannot be our only export market. That is not in our interests either commercially or even, as I say, in terms of price.
And Harper had this to say about the limits on the special Canada-US relationship overall:
Look, I’m a strong and firm believer in not just the economic importance of our relationship, but the security importance and the importance of the United States in the world, but we cannot take this to the point where we are creating risk in significant economic penalty to the Canadian economy. And to not diversify to Asia when Asia is the growing part of the world just simply makes no sense to Canada.
On Keystone XL specifically, Harper also said: “President Obama has told me repeatedly that this decision will ultimately be made on the basis of its merits, and I have no reason not to believe him on that.”