Canada plays down embarrassing oil sands document

OTTAWA (Reuters) - Canada disassociated itself on Thursday from an embarrassing official policy paper that said the country’s independent energy regulator, now studying a controversial oil pipeline, is in fact a government ally.

Critics have long charged the right-of-center Conservative government is trying to pressure the regulator - the National Energy Board (NEB) - to approve Enbridge Inc’s plan to build a pipeline from the Alberta tar sands to the Pacific Coast.

The NEB this month started hearings into the C$5.5 billion ($5.5 billion) Northern Gateway pipeline, which the government says is needed to send more oil to Asian markets.

Opponents of the pipeline include green groups and some native Indian bands, who say they fear the consequences of a spill. Ottawa says some critics are foreign-funded radicals and complains the regulatory process will take too long.

Greenpeace on Thursday released a policy paper from April 2011, which listed the NEB as one of the government’s allies. The paper was part of a campaign to counter widespread criticism of the oil sands in the European Union.

The paper - written by bureaucrats at the international trade ministry - also said that among the government’s adversaries on the file were aboriginal groups, also known in Canada as First Nations.

Ottawa is in fact trying to woo the First Nations and this week hosted a summit between Prime Minister Stephen Harper and hundreds of native chiefs to discuss improving the often awful living conditions of Canada’s aboriginals.

“We do not agree with the characterizations. We continue to work together with Canada’s First Nations as we promote our energy interests. The NEB is an independent federal agency,” said Adam Taylor, a spokesman for International Trade Minister Ed Fast.

“The oil sands are a proven strategic resource for Canada. We will continue to promote Canada’s oil sands as they are key to Canada’s economic prosperity and energy security.”

At 170 billion barrels, Canada’s oil sands represent the third-largest crude deposit in the world. Despite concerns about the environmental impact of development, Ottawa touts the resource as one of the country’s great economic opportunities and job creators.

The policy document was obtained by the Climate Action Network group through access to information and then made public by Greenpeace.

“Canadians should be concerned when a supposedly arms-length agency that is supposed to regulate the oil industry, including conducting hearings on Enbridge’s proposed new tar sands pipeline across British Columbia, is listed as an ‘ally’,” said Keith Stewart of Greenpeace.

Canadian Environment Minister Peter Kent told reporters in Calgary that while he had not seen the document, the notion Ottawa considered aboriginal groups as adversaries was a “gross misrepresentation of reality”.

He added that he and Natural Resources Minister Joe Oliver would keep pushing back at environmental groups countering the government’s message that the oil sands are being developed responsibly.

Among other allies listed by the policy document were European energy companies, some of which have invested heavily in the tar sands.

($1=$1.00 Canadian)

Additional reporting by Jeff Jones in Calgary; editing by Peter Galloway