Canada’s oil sands industry faces an equal risk from its reputation as an environmental laggard as from high operating costs, industry observers said.

courtesy: Greenpeace

courtesy: Greenpeace

The failure to win approval for pipelines like TransCanada Corp.’s Keystone XL and Enbridge Inc.’s Northern Gateway is tied to concerns about carbon emissions with oil production, Ed Whittingham, executive director of the Pembina Institute, said at the Bloomberg Economic Series Canada summit in Toronto.

Producers, already hit by the slump in crude prices, haven’t been able to turn around the industry’s image as a growing emitter of greenhouse gas and toxic by-products in the absence of tougher regulations. Oil companies have been slow to grasp the risk to their businesses from reputation, said Todd Hirsch, chief economist at ATB Financial, the Alberta government-owned bank.

“The rest of the world looks at us critically,” he said. “It makes us easy targets. We need to do better.”

A new left-of-center government in Alberta headed by New Democratic Party Leader Rachel Notley promises to offer a “reset button” for the industry and its flagging image, said ATB’s Hirsch.

“The previous government had lost all credibility,” he said. “I’m optimistic.”

(Source: Bloomberg Business)