UNCLAS SECTION 01 OF 02 OTTAWA 000874

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E.O. 12958: N/A
TAGS: SENV ENRG CA
SUBJECT: Ottawa: Ambassador Jacobson and Environment Minister
Prentice discuss continental carbon market and oil sands

1) Summary: During an engaging introductory lunch on
November 5, 2009, Ambassador Jacobson and Canadian Minister of the
Environment Jim Prentice covered a wide variety of issues, ranging
from Canada's international reputation and potential damage from
oil sands coverage to exploring the possibility of a harmonized
continental carbon market and collaborating on the Great Lakes.
Minister Prentice clearly indicated his interest in working closely
with the Obama Administration and both parties stressed the
importance of the environment globally, but also as a key component
of our bilateral agenda. As an immediate follow-up, Minister
Prentice asked for assistance in setting up a conversation with
Senator Kerry to discuss some key issues of concern to Canada in
regard to potential Senate climate legislation. The Ambassador
also agreed to assess interest in Washington on further exploring
the benefits of a continental carbon market. Based on the breadth
and scope of their discussion, the meeting established common
interest and a mutual intention to push forward a strong
environmental dialogue. End Summary.



2) From the onset of lunch, Minister Prentice was clearly
making every effort to establish a connection with Ambassador
Jacobson, outlining his respect for the Administration and his
interest in President Obama's "back story", persona, and goals.
The tone was very collegial and Prentice appeared unrushed,
focused, and interested in getting to know the Ambassador on a
personal level, sharing stories about his daughter, life in
Alberta, and his love for the outdoors. Prentice appeared keen to
forge a personal relationship with Ambassador Jacobson - to the
mutual benefit of both countries. Note: Prentice is
widely-considered to be the most respected member of Prime Minister
Harper's inner circle and enjoys Harper's complete trust. He is
the lead Minister for climate change, as well as the lead on the
Clean Energy Dialogue and Northern Gas pipelines.



3) During a discussion of the Ambassador's travels, Prentice
asked for his views on the oil sands. Prentice shared that he was
concerned about the media focus on the sands and the possible

impact on Canada's international reputation. He recalled that he
was first concerned about oil sands coverage during a trip to
Norway where the public was debating whether or not Norway should
be investing public funds (Statoil) in 'dirty oil'. As Prentice
relayed it, the public sentiment in Norway shocked him and has
heightened his awareness of the negative consequences to Canada's
historically 'green' standing on the world stage. Calling himself
"conservationist-minded", Prentice said he would step in and
regulate the sands if Canada's image in the world gets further
tarnished by negative coverage. Although he never mentioned
Natural Resources Minister Raitt by name (perhaps, an indication of
the rumored tensions between the two Ministries), Prentice did say
that he felt that Government of Canada's reaction to the dirty oil
label was ''too slow" and failed to grasp the magnitude of the
situation. As the Minister representing Alberta and one of the
most senior Ministers in the Cabinet, Prentice made clear that he
was constantly monitoring the situation. He noted that if industry
did not take voluntary measures and if the provincial government
did not set more stringent regulations, he would step in and press
federal environmental legislation. In response to the
Ambassador's inquiry about a possible moratorium on further
expansion in the oil sands, Prentice didn't think it was necessary
at this time and felt growth to the 3-4 m/b/d was sustainable. He
agreed that the province should be looking at cumulative
environmental impacts and addressing long-term sustainability
concerns. At the end of the day, Prentice wants Canada to be
billed as the most environmentally-conscious energy superpower.



4) As the topic turned to climate change, Minister Prentice
highlighted a number of concerns that he was interested in
discussing further, preferably with Senator Kerry prior to the
passage of legislation in the Senate. These issues include: the
need for an integrated carbon market, necessitated by the
integrated nature of our economies and energy markets; a harmonized
approach to a low-carbon fuel standard; further discussion of
renewable portfolio standards; an assessment of the impact/nature
of border adjustment measures; and a general increase in

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understanding to avoid inadvertent/unintended consequences of U.S.
legislation on Canada. The Ambassador offered to assist in setting
up a conversation with Senator Kerry, as well as exploring the
possibility of initiating a dialogue on a harmonized continental
carbon market.



5) The last major topic of discussion was a mutual interest in
the protection of and long-term health of the Great Lakes. Both
parties expressed a desire to work collaboratively on such efforts.
Overall, the lunch was a success and laid a number of markers for
further cooperation. Minister Prentice and Ambassador Jacobson
will be meeting again for dinner on November 9, building further on
their relationship. End Cable.
JACOBSON