Upgrade oil in Canada, opposition leader says

* Mulcair calls for more refining rather than pipelines

* Says Harper government not enforcing legislation

* Alberta premier snubs NDP leader

By Jeffrey Jones

CALGARY, Alberta, May 31 (Reuters) - Canada should refine more crude from its vast oil sands to create jobs and boost economic benefits rather than build pipelines to ship the raw material overseas, the leader of federal opposition party said after his first visit to the massive Alberta production facilities on Th urs day.

New Democratic Party leader Thomas Mulcair, who toured Suncor Energy Inc's sprawling oil sands operation, also said he did not advocate imposing new environmental legislation on the energy sector, only demanding the federal government enforce laws that are already on the books.

Mulcair, who hails from Quebec, has come under fire in Alberta for saying the booming oil sands industry is partly responsible for driving up Canadian dollar's value, which in turn has led to a struggling manufacturing sector as goods for exports became too expensive.

Following his high-profile trip to the oil sands hub of Fort McMurray, Alberta, he insisted his left-wing NDP supports measured, long-term economic growth and was not anti-tar sands.

"That means building a diversified economy that includes value-added jobs and a thriving export industry. It means upgrading and refining our own natural resources right there in Canada and particularly in Alberta, instead of building pipelines to ship raw bitumen, for example, overseas," Mulcair said in Edmonton.

"It means making polluters pay for the pollution they create rather than leaving that cleanup to future generations. Governments have an obligation of result."

Following a surprise second-place showing in last year's federal election, Mulcair and his party have made big strides in opinion polls and in some have surpassed Prime Minister Stephen Harper's Conservatives, although Canadians do not head to the polls again until October 2015.

Alberta Progressive Conservative Premier Alison Redford was angered by Mulcair's remarks about the oil sands' national economic impact, and attended an economic forum in the United States on Thursday rather than meet with him. Instead, Mulcair had meetings with Deputy Premier Thomas Lukaszuk and Fort McMurray Mayor Melissa Blake.

Interestingly, calls to refine more bitumen from the oil sands within Alberta have come from politicians in the province for years, the last being Redford's predecessor, Ed Stelmach.

However, some analysts warn a big increase in upgrading and refining capacity in Alberta could result in prices for the products slumping after numerous U.S. refineries have added equipment to process heavy Canadian bitumen. Redford has said the market should decide.

Meanwhile, she and the Harper government have promoted pipelines to Texas and Canada's Pacific Coast to diversify markets for Canadian crude, projects that face staunch opposition from environmental groups.

Both governments have said the industry is developing the resource, which is the world's third-largest crude deposit, responsibly under their watchful eye. They have set up new monitoring programs after formal scientific reviews found studies of ecological impact lacking.

Mulcair said the Harper government is to blame for much of the environmental damage, by not enforcing acts pertaining to migratory birds, navigable waters and species at risk.

"It affects animal life, it affects ecosystems and ultimately it affects human life as well, so these are things that we take seriously as obligations of the federal government, and we don't think that Stephen Harper's Conservatives in particular have been living up to those obligations," he said.