Output still far from peak levels, say CEOs
Canadian production to play crucial role on world markets
Shaun Polczer, Canwest News Service
Published: Wednesday, July 02, 2008
MADRID, Spain - Canada's oilsands are still years away from making a meaningful impact on global oil supplies, the heads of two of the world's largest oil companies -- Exxon and Total SA -- said at the World Petroleum Congress in Spain yesterday.
But they also said despite economic and environmental challenges, unconventional oil from Canada will eventually play a crucial role in meeting the world's oil needs.
"Resources in Athabasca (Alta.) are huge, probably much bigger than expected," Total CEO Christophe de Margerie told a news conference.
"The problem is that the time to take resources into production will be longer than expected."
"The oilsands in Canada is an important resource for future supply," added Exxon boss Rex Tillerson.
"Today they are relatively small in the global sense, but they are very important to North American energy-supply security, and they can become even more important in the future."
Both Total and Exxon are fast-growing oilsands players in northeast Alberta. Total is awaiting regulatory hearings for its Joslyn project while Exxon, through its 70-per-cent interest in Imperial Oil, is moving ahead with the Kearl oilsands mine.
Imperial is also the second-largest interest holder in Syncrude Canada and operates the Cold Lake thermal project.
Mr. Tillerson noted many obstacles exist to oilsands development, including intensive use of natural gas in the extraction process along with elevated greenhouse-gas emissions compared to conventional oil.
"It is very high cost, but technology advancements will continue to be made to improve the economic performance of the oilsands resource in the future. There are enormous challenges, both in terms of their energy intensity and therefore the greenhouse-gas emissions that result."
Environmental concerns also plague development of the massive resource.
In an editorial headlined "Oilsands industry in a fowl mess," the daily WPC newsletter distributed at the conference lambasted the oilsands as a "messy, costly business," that the world is struggling to take seriously in light of the deaths of 500 ducks.
The article, written by the London-based Petroleum Economist, described the oilsands as a "frequent target for scorn as an overrated and over-priced mining venture, despite 40 years of commercial production and an estimated 173 billion barrels of recoverable crude."
Speaking at a reception hosted by the Canadian embassy on Monday night, Alberta Energy Minister Mel Knight defended the record of oilsands development and said the province remains committed to working out the environmental issues.
"We have not, we are not, and we will not put our environment at risk for money," he said.
While acknowledging the environmental and economic barriers to oilsands development, Total's Mr. de Margerie speculated on the use of nuclear power to displace natural gas and reduce emissions from oilsands.
He confirmed that Total has had discussions with French nuclear giant Areva about the possibility of using nuclear reactors to fuel future oilsands developments, but remained noncommittal regarding the future of nuclear power in Athabasca.
"Definitely there is a shortage of gas. Is nuclear going to be an option? I don't know," he said.
© The Ottawa Citizen 2008
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