Making a trillion-dollar case

The Canadian petroleum industry has a vital sales job to perform to win over opponents of oil sands development, says Geoff Hill, national oil and gas leader and a partner in the firm of Deloitte.

Speaking at an event sponsored by Fluor Canada, he argued that even though Canadians are passionate about the oil sands from different angles, “some of the obstacles can be turned into opportunities” because of that passion.

But, for now, Canadians are rather illiterate about energy issues, especially when it comes to making a connection between the industry and the economy, Hill said.

To overcome that he called for a comprehensive approach to energy education, starting with the public kindergarten-to-Grade 12 system, to address issues of consumer literacy and national unity.

Based on a recently released Deloitte report, the oil sands could generate C$2.1 trillion in economic benefits by 2025, C$783 billion in tax revenue and 905,000 jobs, Hill said.

He questioned whether any other industry could provide the same amount of prosperity, making it incumbent on the industry to demonstrate that without oil sands development Canada’s standard of living will not improve to the extent it could.

In order to achieve fair value for its oil sands production, it is important to diversify export markets beyond the United States, he said, noting Canada is “losing almost C$30 million a day because we are discounted by the supply-and-demand issue.”

Hill said both large independents and small juniors are necessary to attract investment for oil sands development, suggesting that although only large companies can tackle major projects such as pipelines they depend on the tenacity and ingenuity of smaller companies to help propel the industry forward.

On the flip side, he said Canadians should take a strategic approach to maximizing value from the oil sands resource before exporting it outside North America, including the provision of domestic refining capacity.

Hill also urged greater collaboration within the industry and a national energy strategy to achieve greater national agreement on developing the resources.

“I don’t think we need to be scared of working together,” he said. “We need to be scared of not working together.”

—Gary Park