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Oil sands: Canadian security blanket U.S. Treasury Secretary sees energy dependence shifting from the sands of ‘far-off places’ to the sticky black sands of Alberta Gary Park Petroleum News Canadian Correspondent
The huge investments in Alberta’s oil sands are a source of comfort to Americans concerned about their energy security, said U.S. Treasury Secretary John Snow after two days of on-site inspections and meetings with Canada’s Finance Minister Ralph Goodale.
He said the flurry of new projects in northeastern Alberta “offer extraordinary potential” and the United States is “taking great interest” in what is happening in the region.
“The United States would be a tremendous market for the output of those industrious people who are putting capital and technology into the oil sands,” said Snow, the highest ranking U.S. official to visit the oil sands region.
His remarks coincided with a pitch by Canadian-born John Richels, president of Devon Energy and formerly president and CEO of Devon’s Canadian division, for a joint Canada-U.S. strategy to hasten U.S. goals of strengthening its energy security.
He told a TD Securities conference that a coordinated approach could include the construction or upgrading of refineries to handle greater volumes of Canadian heavy oil and help reduce the widening price differential between light crude and production from the oil sands.
As well, joint research and development could accelerate the development of new energy technologies, Richels said.
Rather than advocating greater government involvement in the industry, he said the cooperation could actually see the government withdraw from some areas and result in streamlined regulations to open the door to greater oil sands development.
Snow, after being flown over the Suncor Energy operation, said it was impressive to “realize the extraordinary nature of what’s happened and how quickly it happened.
“This technology, which was viewed not many years ago as sort of a quaint energy (R&D) project is now becoming a very important part of the North American energy picture,” he told reporters.
Snow said the plans to spend C$50 billion over the rest of the decade doubling the oil sands output to 2 million barrels per day and possibly climbing to 5 million bpd by 2020 is “a tremendous augmentation and increase in the energy capacity of North America.”
He noted that the Bush administration is “working hard” to introduce legislation making the United States less reliant on “faraway, far-off supplies and right here on the border with our closest trading partner, Canada is making enormous strides to secure energy availability and energy security for this hemisphere.”
With debate in full swing in the United States over the China National Offshore Oil Corp. bid for Unocal on the heels of three separate oil sands-related deals by Chinese and Canadian companies, Snow said Washington was not worried about the Chinese taking a stake in the oil sands.
He expressed confidence that Canada would “make a considered judgment … investments in Canada are really a matter for Canadian officials, not U.S. officials.
“The oil sands are something that we are watching closely and we’re confident can become a larger source of supply to the U.S.,” Snow said.
Otherwise, he said it is up to Canada to decide where to ship its oil, referring to the possibility of PetroChina becoming an anchor tenant on Enbridge’s planned Gateway oil sands pipeline to a British Columbia deepwater port.
Goodale emphasized that although North American energy markets must function successfully, foreign investment is encouraged in Canada because of its major impact on economic growth.
But he said recent proposed changes to the Investment Canada Act will, if enacted, allow the government to block Chinese investment in the oil sands if national security was thought to be at risk.
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