OTTAWA - Canada won't follow the Bush administration's lead in setting hard targets for reducing oil consumption, but will instead impose tougher emissions standards on the auto sector and other industries, says Prime Minister Stephen Harper.

However, any regulations intended to protect the environment won't come at the expense of the economy, Harper said Wednesday.

"The government does intend to regulate emissions across all sectors including the automobile sector,'' Harper said in an exclusive interview with The Canadian Press.

"(But) we have to consult the industry and ultimately come up with targets that make progress on the environment while being achievable for industry in a way that doesn't jeopardize Canadian jobs,'' Harper added.

"That's our target.''

Harper said he is considering imposing targets on industry to reduce greenhouse gas emissions and air pollution.

"We're looking at that,'' he said.

"We're in the process of target setting and we hope to do that in the weeks and months to come.''

But unlike U.S. President George W. Bush, cutting energy consumption won't be Canada's focus as it aims at becoming a world energy superpower, Harper said.

In his State of the Union Address this week, Bush said he wants to reduce oil consumption by 20 per cent in Middle East oil imports over 10 years. That would reduce American dependence on oil from the Middle East by 75 per cent.

Canada is now the leading exporter of energy to the United States when oil and gas are factored into the equation.  The Bush administration has sought to increase oil imports from Canada, which is seen as a reliable and secure source of  energy, since the Sept. 11 attacks.

Several of the Sept. 11 hijackers came from countries that supply the United States with oil.

"President Bush's speech . . . when he talked about these things was really talking about it in the context primarily of energy security and the United States shortage of energy and their dependence on foreign supplies of energy,'' Harper said perching forward as he sat in his sun-filled Parliament Hill office.

"That's not a problem here. Canada is an emerging world energy superpower. We have an abundance of all forms of energy. We're an exporter of virtually all forms of energy.''

"Our need and our desire to deal with these things and set targets is really in the context of environmental improvement and environmental preservation and less in terms of energy security.''

Harper appears to be heeding warnings from Ontario Premier Dalton McGuinty and Canadian Auto Workers President Buzz Hargrove.

McGuinty has warned the federal government not to solve its greenhouse gas emission problems on the backs of the industry that is the engine of the Ontario economy.

Hargrove has also cautioned Harper not to shackle an industry "already on its knees'' with more regulation.

The auto industry has been operating under a voluntary emission reduction plan that will end in 2010.

So far, Canada has either had a written voluntary agreement with the industry to meet emissions goals or an understanding that car manufacturers would follow American standards.

Environmentalists hope the Canadian auto industry will adopt California standards for greenhouse gas emissions that would require vehicles to reduce emissions by 30 per cent between 2009 and 2015.

"California is not an auto producer, so it's kind of theoretical for California to set auto production standards,'' Harper said.

"We have an actual auto industry.''

Conservative insiders have told CP that the ultimate objective is to bring Canada in line with North American-wide standards after 2010.

"They don't want Canada to become a dumping ground (for inefficient cars) in North America,'' a source familiar with the file recently told CP.

Sources have also said the government is considering a new tax break for consumers who buy hybrid cars, such as the Toyota Prius. Ontario and British Columbia have a similar program.