B.C. oil could ease crisis
Offshore exploration should be considered, agency says
Peter O'Neil with files from Kelly Sinoski
Canwest News Service
Monday, July 14, 2008
PARIS -- Canada could play a crucial role in helping alleviate the international energy crisis if it continues to expand Alberta oilsands production and considers allowing exploration off B.C.'s pristine coastline, says a senior official with the International Energy Agency.
But IEA chief economist Fatih Birol acknowledged there are major environmental considerations that weigh heavily on both options.
He also said increased Canadian production won't alter the emergence of a "new world oil order" by itself, with consistently higher prices that could lead to economic decline, particularly in the world's poorest countries.
"Canadian oilsands are very, very important," Birol told Canwest News Service in an interview.
The Geological Survey of Canada has estimated there could be close to 10 billion barrels of oil and 26 trillion cubic feet of gas in the Queen Charlotte Basin off the B.C. north coast.
While U.S. President George W. Bush has championed offshore exploration off the Alaska coast, neither Prime Minister Stephen Harper nor Premier Gordon Campbell have indicated they're prepared to push for lifting the B.C. moratorium.
The freeze on exploration and development of B.C.'s offshore reserves of oil and natural gas was first imposed by Ottawa in the early 1970s, and environmentalists and many British Columbians remain deeply opposed to revisiting it.
In 2006, a study estimated that recoverable resources are about $50 billion worth of natural gas and about $75 billion of oil.
"I think it's very good to look at these areas, to get additional oil, at these times," Birol said.
"We have to of course look at the implications [of offshore exploration] for the environment, and the social implications of that. But in general it's very important to have access to new areas."
But the David Suzuki Foundation argues that opening up B.C.'s coastline to offshore drilling is one of the most "destructive things on earth" because it will boost greenhouse gases and have a huge impact on the environment.
Canada doesn't have strong fuel-efficient standards in place and North Americans have a strong penchant for gas-guzzling cars, said Ian Bruce, the foundation's climate change specialist
"One of the crucial things we have to do is reduce our dependency on oil. One of the reasons for the high oil costs is because we've done so little for so long to bring in greener energy sources," he said. "The best thing we can do to alleviate the energy crisis is to switch to a greener source of energy. It's very short-sighted to think we should increase supply to solve this problem."
A spokesman for the energy ministry could not be reached Sunday.
The Paris-based IEA, made up of 27 countries including the U.S., Canada, Japan, Australia and most of Europe, advises western leaders on energy issues. The agency was created as a result of the first energy crisis in 1973, triggered by the war between Israel and its Arab neighbours.
Birol said world energy consumption, unlike in the previous two crises in 1973-74 and 1979-80, continues to grow despite soaring prices. This is because consumers in fast-growing China, India and Middle East countries are shielded from the price hikes because of government subsidies.
Major multinational oil companies, meanwhile, have a limited ability to develop new sources because exploration in many energy-rich regions of the world is controlled by state-owned companies, he said.
"This is very different. We cannot explain what is happening now, and in the next years to come, with the history of oil," Birol said.
"I think we have entered a new world oil order. The reason is there are new actors on both the consumption and supply side."
He said Canada can play an important role in reducing supply uncertainty because it has huge oilsands potential and is a politically stable country with relatively minimal state interference in the sector.
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