Canada wants to sign binational deal to sell oil

TORONTO - Before Barack Obama could even assume the U.S. presidency Tuesday, Canada announced that it wants to sign a binational deal that would sell oil to the U.S. and co-ordinate the countries' environmental plans.

Federal Environment Minister Jim Prentice spoke to a meeting of the Canadian Council of Chief Executives in Toronto and said he wants to convince the U.S. to turn to Canada for their energy needs.

The same deal would establish new environmental rules like a common cap-and-trade carbon market system, tougher fuel standards and targets to use more clean energy.

He ensured the executives that a binational deal would "do no harm" to Canadian companies and that the government wants "to avoid measures that would cause them to be not just down, but also out."

Prentice later defended Alberta's production in the oilsands as a "reality" that is not going away, despite a suggestion on Monday from Canada's ambassador to the United States that one of Ottawa's biggest challenges with the Obama administration is a perception that Canada is a purveyor of "dirty oil."

Obama campaigned on curbing an American "addiction" to dirty oil and Prime Minister Stephen Harper admitted during an interview last week that "we've got to do a better job environmentally. We hear a lot of pressure on that."

But Prentice said it's undeniable that the oilsands will continue to be extremely important in fulfilling both Canadian and American energy needs.

"We're not going to eliminate the world's use of hydrocarbons in the short term, there'll continue to be a need for them and the oilsands provide a stable North American supply," Prentice said.

"We need to make sure that's done in an environmentally responsible way but I think the reality is, for both Americans and Canadians, that source is important."

Prentice said he still couldn't be sure how Canada will frame its proposal for a binational agreement with the United States.

But the plans could include joining forces to advance carbon capture and storage technology, expanding clean power generation and transmission capacity, and interconnecting the eastern and western regional power grids across the continent.

Prentice said he also wants Canada's federal environmental policies to be co-ordinated with other tax, tariff and technology policies, and would like to harmonize regulations with the provinces.