(EnergyAsia, October 1 2012, Monday) — Canada must look beyond the US to develop new markets in Asia, in particular China, if it is to realise the potential of its oil and gas resources and play a bigger role on the global markets, said a former Cabinet Minister from the ruling Conservative government.

Jim Prentice, now vice-chair at CIBC, a leading Canadian bank, presented this message in a speech at an event hosted by the University of Calgary’s School of Public Policy about possible outcomes in the US elections and the upcoming changes to China’s top leadership.

He said Canada faces a number of challenges to stay competitive in the energy market, having been so entrenched and comfortable with doing business in North America for decades.

Crude oil accounts for 15% of Canada’s export earnings, and almost all of it goes to its nearest neighbour and the world’s largest economy, the US.

But the world is changing and Canada must adapt, Mr Prentice said.

“We need to better understand our changing world and what it means for us. In geo-political terms, this is a highly consequential year for Canada. This fall, an election in the US and an election of sorts in China will serve to further demonstrate just how dependent Canada is in our new global world.”

Next month, many of China’s top leaders will be stepping down and Canada and the world will begin watching to see how a new government will manage China’s growth and conduct its international relationships.

The presidential election in the US also brings two different views to the energy file although with one common element.

“Under either administration, I think it’s safe to say the Americans will pursue their own interests quite aggressively. Although they are great partners, we can’t be lulled into believing that their interests and our interests on energy will ever be the same,” he said.

Despite the country’s substantial resource base, financial strength, an open-for-business environment, sound regulations and market-based business principles, Canada is still only exporting to one customer.

He said: “Of the oil we export, 99% of it goes to the US. That makes us a price taker, not a price maker. I’m not sure you fit the definition of a so-called superpower when a single client has a firm grip on the basket where you keep 99% of your eggs.

“The development of Pacific corridors for oil and liquefied natural gas stand as one of the most important, and certainly one of the most challenging, initiatives that our country has encountered in decades.”

Mr Prentice stressed that we need to make it a national priority to look beyond America and advance our strategic relationship with China and Asia.

“Asia is where the growth of today is, and where the growth of tomorrow will be. That’s where we need to be.”

But China and the rest of Asia will look elsewhere if Canada becomes too cumbersome to do business with, he warned.

“We offer advantages as a resource producer related to stability and security of investment, but we are also a high-cost environment. If Asia finds it too cumbersome or bothersome to deal with us, they’ll get into business elsewhere.”

Despite the challenges, Mr Prentice believes Canada can continue to be competitive, but it must adapt and change.

“We have been blessed with our abundance of resources and the opportunity to build from them a strong economy and an enviable way of life. But prosperity is not a birthright. Only with foresight and smart choices will we be able to fully enjoy the benefits of our national bounty.”

Mr Prentice made the speech amid an increasingly intense debate in Canada over a proposed C$15.1-billion bid by China’s state-owned upstream company CNOOC to acquire Calgary-based Nexen Inc.

Nearly seven out of 10 Canadians told a recent newspaper poll that they oppose the deal on grounds that CNOOC is a Chinese government-controlled company even though the bulk of Nexen’s assets are abroad.