Obama Agrees To Work With Canada On Clean Energy

Date: 23-Feb-09

Country: CANADA

Author: Jeff Mason and Ross Colvin

OTTAWA - US President Barack Obama and Canadian Prime Minister Stephen Harper were to agree plans on Thursday to work together on environmentally friendly energy technology, as both move forward to tackle climate change.

Obama arrived in Canada on his first international trip as president seeking to quell Canadian concerns about US trade protectionism and discuss the global economic crisis and the war in Afghanistan.

The two leaders met for about half an hour privately before heading to lunch with top advisers at the Canadian parliament.

A White House official said the two countries would announce an agreement to cooperate on "clean energy" technology that Obama said this week would let both countries use fossil fuels such as oil and coal while generating less pollution.

"It will include elements like carbon capture and sequestration and the smart grid," the White House official said of the agreement.

Carbon dioxide is the main greenhouse gas blamed by scientists for warming the Earth. Carbon sequestration, which is not yet commercially viable, involves capturing the gas and storing it underground before it enters the atmosphere.

The official said the two countries aimed to coordinate research and demonstration projects as the technology gets off the ground.

Environmentalists want Obama to press Canada to clean up its "dirty" oil sands in the western province of Alberta, where oil is extracted in a process that spews out vast amounts of greenhouse gases. Canada supplies a large proportion of US energy needs.

Alberta Premier Ed Stelmach said he was glad the leaders focused on technology, saying a tax on tar sands would have damaged his province's competitiveness.

"I'm very pleased that the president and the prime minister are looking at technology as a way of dealing with the issues tied to climate change," he said on CTV.

In an interview this week with the Canadian Broadcasting Corporation, Obama also stressed that his country had its own share of dirty energy sources with vast resources of coal.

TENSION OVER TRADE

Obama's visit to his country's northern neighbour was meant to illustrate the importance his administration placed on the United States' biggest trading partner and energy supplier.

Several thousand people waited outside parliament and cheered as the president's motorcade arrived.

But some tensions clouded the agenda. Harper has said he would seek assurances the "Buy American" clause in the $787 billion economic recovery package Obama signed this week will not discriminate against companies in Canada, which sends 75 percent of its merchandise exports to the United States.

"This is a huge risk to the world right now. If there is one thing that could turn a recession into a depression, it is protectionist measures across the world," he told CNN.

Harper said in the interview he was encouraged by Obama's signals on the issue but cautioned that Canada had options of recourse under international trade law if necessary.

US officials said Obama would seek to allay Canadian fears. In the CBC interview, Obama said Canadians should not be concerned, noting that history showed that "beggar thy neighbour" protectionist policies could backfire.

The "Buy American" provision imposes a requirement that any public works project funded by the stimulus package use only iron, steel and other goods made in the United States.

Canada is also alarmed by Obama's stated desire to renegotiate the North American Free Trade Agreement, to which Canada, the United States and Mexico are signatories, fearing that it could lead to new tariff barriers. Obama has said he wants to strengthen environmental and labour provisions.

US and Canadian labour unions called for changes in agriculture, energy, investment and other NAFTA provisions.

(Additional reporting by Doug Palmer in Washington and Randall Palmer in Ottawa; Editing by David Storey)

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