Time to remove barriers: Bodman

DOE secretary to spend final time in office tackling issues of pipelines, refining, that limit import of Canadian heavy crudes

Gary Park

For Petroleum News

With the Middle East on the brink of war, geopolitical turmoil disrupting crude supplies and oil edging towards US$80 per barrel, Canadian government and industry leaders were spared the need to sell U.S. Energy Secretary Samuel Bodman on the importance of Alberta oil sands production when he visited the region July 13 and 14.

During a quick stop at the oil sands and at roundtable meetings with his hosts, Bodman said the emphasis had been on finding ways to remove barriers to increasing U.S. imports of production from northern Alberta.

“Whether it’s 3 million or 4 million barrels per day (current output is just over 1 million bpd), that would have a profound effect, if it were to be accomplished, on the picture for oil usage in the United States,” he told a news conference in Calgary.

“I believe it is incumbent on us to do everything we can to understand what the barriers are, understand what the opportunities are, to understand how we can be helpful,” he said.

That, coming from the first U.S. energy secretary to visit the oil sands of Canada’s oil capital in Calgary, was music to the ears of Canadian and Alberta government officials and industry executives.

Compounding Bodman’s concerns was his view that oil suppliers have “really lost control of the market,” having ceded that power to traders in New York, London, Tokyo, Singapore and other global hubs.

Tight supplies a concern

Bodman could only express the hope that once geopolitical tensions ease “we can return to something more normal.”

In such a climate, he left no doubt that the oil sands can play an “essential” role in U. S. energy security and pledged that during the remaining 30 months of the Bush administration he will work on joint efforts with Canada to improve the flow of heavy crudes to U.S. markets.

On the list of issues raised during closed-doors meetings, the two sides talked about the need for greater U.S. refining capacity to handle heavier crude blends, a more efficient regulatory process for projects such as cross-border pipelines and ways to solve the shortage of construction labor in North America.

“The United States is increasingly looking to our province to help meet its energy needs and that spells good news for the U.S. and for Alberta,” Alberta Premier Ralph Klein told reporters.

“While our two jurisdictions already enjoy a vibrant, integrated energy market, I believe there is room for that relationship to grow,” he said.

Canada’s Natural Resources Minister Gary Lunn said there is a need for a “greater common framework to ensure energy cooperation.”

Klein: time for alternative energy research

On the same topic, Bodman emphasized the importance of developing the oil sands in an “economically efficient and environmentally sound” manner by using renewable energy to extract and process the raw bitumen.

Bodman’s two days included a helicopter flight over part of the Athabasca oil sands deposit which covers 36,000 square miles and holds 174 billion barrels of recoverable bitumen as well as visiting Syncrude Canada, the world’s largest source of synthetic crude.

He also met privately with 25 oil, gas and pipeline executives.

Following those sessions, Pierre Alvarez, president of the Canadian Association of Petroleum Producers, told the Financial Post there was agreement that North America wants to focus as much as possible on developing its own resources.

“But the resource base is changing ... and there are constraints both countries can work together on,” he said.