|
Alberta wants oil sands included in global crude oil reserves Energy Minister Murray Smith says recognition is vital to attract international investment, but disturbed by lack of awareness among U.S. energy officials Gary Park PNA Canadian Correspondent
Alberta’s oil sands production cold climb to 3.44 million barrels per day within the next decade and more than five times current levels, easily offsetting the shrinkage in conventional crude out, says a new study by the Canadian Association of Petroleum Producers.
At the same time, capital investment across the northern half of Alberta could soar to C$8.3 billion this year from C$1.5 billion in 1998 and C$4.2 billion in 2000.
Against that background, the Alberta government is lobbying for the inclusion of the oil sands potential in global crude oil estimates — a move that would boost proven worldwide oil reserves by about 30 percent, said Energy Minister Murray Smith.
The pitch is being made to the Paris-based International Energy Agency and the International Petroleum Agency to recognize Alberta’s establish reserves of 177 billion barrels in annual reports of global reserves to be published in next January.
Oil sands critical to security Smith told a Conference Board f Canada seminar in July that the vast oil sands storehouse is so critical to North American security of supply that it should find a place in reserves calculations.
But he conceded that as far as both the United States and some global agencies are concerned, the oil sands might just as well not exist.
However, he remains confident that the arguments to the IEA and IPA will be persuasive because the province has made a special effort through the Alberta Energy and Utilities Board to establish that the reserves are in place and are being developed.
The AEUB has calculated that 177 billion barrels of Alberta’s 1.6 trillion barrels of bitumen in place are recoverable using existing technology.
The total includes 7 billion barrels of bitumen reserves that have been booked through producing leases.
As new technologies are developed, the AEUB believes that up to 315 billion barrels are ultimately recoverable, compared with Saudi Arabia’s 262 billion barrels of proven reserves, U.S. reserves of 22 billion barrels and Mexico’s 28 billion barrels Smith said.
International participation vital But he said that a lack of international recognition for the oil sands poses challenges in “raising awareness among international producers and investors,” whose participation is vital if the oil sands are to achieve their full potential.
He said the level of ignorance among U.S. energy officials and industrial giants is “something we need to correct.”
Smith said the Bush administration’s energy policy document recognized the importance of Alberta’s natural gas supplies, but made no mention of the oil sands, despite frequent public statements by President George W. Bush and Prime Minister Jean Chretien about the importance of U.S. investment in the sector.
Smith said the Alberta government’s goal is for U.S. government and industry decision-makers “to fully understand there is a big source of new supply available from Alberta.”
“The oil sands should be recognized because they are real, they are an important source of both bitumen and upgraded light crude oil flowing into refineries,” he said. “The world’s biggest consuming market is using that oil today.”
Smith noted that oil sands operators have sharply lowered the cost of extracting and processing bitumen, making upgraded crude from the oil sands compatible with North America’s full-cycle, conventional oil production costs.
Just as important, technologies now exist to extract deposits that are too deep to be surface-mined, making commercial development of 80 percent of the reserves economically viable.
| 