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Oil sands could unseat Saudi Arabia Senator Orin Hatch, DOE’s David Conover tell D.C. forum that oil sands could make Canada world’s oil giant, needed in U.S. Gary Park Petroleum News Canadian Contributing Writer
Two authoritative U.S. voices agree that the Alberta oil sands are a key ingredient of North American energy security, which could see Canada become the world’s oil powerhouse.
Republican Senator Orrin Hatch of Utah said that as global energy demand rises, the U.S. will need access to oil sands supply.
“Anyone watching what is happening up north will recognize that, before long, Canada will inevitably overtake Saudi Arabia as the world’s oil giant,” he told reporters after speaking at the Canadian embassy in Washington.
“It means that the United States can enjoy a new gigantic source of oil from a friendly neighbor.”
To that end, he cautioned the Canadian government not to engage in “irresponsible” threats of diverting oil production from the United States to China.
“Neither of us can afford to kick the other one in the teeth,” he said, referring to the annual two-way trade of C$500 billion a year.
“Canada doesn’t want to lose that,” Hatch said. “We certainly don’t want to lose that.”
A strong advocate of closer energy ties, he appealed for cooler heads to prevail in the acrimonious softwood lumber dispute.
Canada’s ambassador to the U.S., Frank McKenna said the prospect of exporting oil sands production to China has surfaced because the U.S. has challenged the constitutionality of (the North American Free Trade Agreement).
“As a matter of prudence we are simply saying that we should be … diversifying our markets as much as we can.”
Alberta Energy Minister Greg Melchin told the same forum that developing new markets for oil was a natural course to pursue after his province’s beef industry was hit hard by a U.S. ban on imports.
But he agreed with Hatch that there was no point in threatening trade retaliation in one sector because of anger over Canada’s treatment in another.
“I don’t think you succeed … By destroying those things that work,” Melchin said. DOE: U.S. needs oil sands David Conover, the U.S. Department of Energy’s assistant secretary for international affairs, told a live and Web cast audience from the forum that the United States can’t meet its future energy needs without the oil sands.
However, before the United States can reduce its reliance on OPEC supplies, there must be answers to high labor and production costs in the oil sands and the shortage of pipeline and processing capacity must be addressed, he said.
BP Vice President Aidan Mills said the worldwide decline of benchmark light sweet crude is good news for the oil sands.
“But the key challenge is market access, especially to areas where it can be most competitive,” he said.
“Further development of pipeline capacity to the U.S. Midwest is critical. The oil sands will be at risk if it is not built.”
On the trade front, Canada’s Trade Minister Jim Peterson categorically ruled out using oil and gas exports as a weapon to settle the softwood feud.
Although the United States is threatening to undermine the 11-year-old NAFTA pact by not honoring the decisions of dispute panels, there should be no attempt to link oil and gas with softwood. Canada moving ahead on Asian trade Even so, the Canadian government is pressing ahead with plans to open a wide trade sphere with Asia.
Transport Minister Jean Lapierre announced Oct. 21 that a C$590 million federal “down payment” is being made to establish a Pacific Gateway in British Columbia to ease roads, rail and border bottlenecks to Asia-Pacific trade. An initial C$190 million will be matched by the provincial government.
The plans include a new C$170 million container terminal at Prince Rupert in northern British Columbia.
Selling the province as a hub for trans-Pacific trade is getting a further boost this month when a trade delegation of about 400 people from China’s Guangdong province arrives in Vancouver to explore new investment and trade possibilities.
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