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Oil sands growth to slow

Uncertainty has producers holding back on projects, industry forecast says

 

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Claudia Cattaneo, Financial Post Published: Thursday, June 19, 2008

 

 

Some of the new rules have not yet been finalized, resulting in uncertainty that is delaying decisions.CNSSome of the new rules have not yet been finalized, resulting in uncertainty that is delaying decisions.

 

CALGARY -- The pace of oil-sands development is slowing relative to what was expected only a year ago, the group representing Canada's oil-and-gas industry said on Wednesday.

 

Projects are being held back by uncertainty over new climate-change policies, higher Alberta royalties, regulatory and construction delays and continuing tightness in the labour market, the Canadian Association of Petroleum Producers said in its annual forecast of Canadian oil output.

 

The slowdown means production growth will be 200,000 barrels a day to 400,000 b/d short in 2020 compared with last year's predictions, based on feedback from CAPP's member companies.

 

In a world in which the oil demand/supply balance is so tight that every barrel counts, Canada's oil sands slowdown could put further pressure on oil prices. Crude oil settled at US$136.68 yesterday in New York, up US$2.67, after George W. Bush, the U. S. President, said he is not expecting announcements of increased oil output from this Sunday's conference in Saudi Arabia.

 

Canada's Natural Resources Minister, Gary Lunn, said yesterday he will attend the meeting. Canada's oil sands are one of the few places in the world where oil production is still increasing.

 

"The potential of the oil sands remains unchanged, it just means we are going to take longer to get there, even under a higher price scenario," Greg Stringham, CAPP vice-president, told reporters after addressing the final day of the group's investment conference yesterday.

 

"Certainly we are going to try and bring this on to meet the [oil] demand that is there, but it's got to be done in a way that is both socially and environmentally acceptable, and if that takes more time to achieve it, we'll take more time to achieve it."

 

Under the new forecast, crude production from all Canadian sources -- from the oil sands to East Coast offshore fields -- will rise to almost 4.5 million b/d by 2020 under a moderate case, and to five million b/d under a more-aggressive case, up from 2.8 million b/d produced last year.

 

Production from oil-sands deposits will grow from 1.2 million b/d in 2007 to 3.5 million b/d in 2020 under the moderate case, and to 4.1 million b/d under an aggressive scenario.

 

In the 2007 forecast, oil sands production was expected to rise to 3.7-million b/d in 2020 under a moderate case, and to 4.45-million b/d under the aggressive scenario.

 

The group said there have been significant shifts in government policy in the last year, including the federal government's elimination of the accelerated capital cost allowance, higher royalties in Alberta, and federal and provincial climate change initiatives.

 

Some of the new rules have not yet been finalized, resulting in uncertainty that is delaying decisions. Mr. Stringham said Alberta has yet to nail down important details of royalty increases affecting oilsands projects that are supposed to come into effect Jan. 1, which could result in interim measures.

 

"Companies are still proceeding with their environmental reviews, their regulatory applications, they are making the billion dollar decisions, they need a little more certainty to make the $10-billion decision," he said.

 

New challenges also emerged, including heightened concerns about the oilsands' environmental impact and longer regulatory processes, the group said.

 

Slowdowns are happening across the board, Mr. Stringham said.

 

Oilsands developers that recently announced delays include Norway's StatoilHydro ASA and Total SA. Both are delaying the startups of their upgraders by two years. Meanwhile, Nexen Inc. and its partner, OPTI Canada Inc., said they will hold off making expansion decisions on their Long Lake project until the federal and provincial governments unveil clearer rules on carbon capture and storage.

 

On the bright side, conventional oil production in Western Canada, which exceeded 1 million barrels a day last year, is not declining as rapidly as expected, thanks to the discovery of such new fields as the Bakken in Saskatchewan and the Sinclair in Manitoba, the group said.

 

Financial Post

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After cheap oil

Soaring energy costs are about to change everything

JASON KIRBY AND COLIN CAMPBELL - Macclens Magazine, May 28, 2008

 

 

Back in the 1990s, when Osama bin Laden was still giving interviews to journalists and didn't have a $50-million bounty on his head, one of his biggest grievances with the West was over the price of oil. At around US$30 a barrel, it was far too cheap, he reasoned. The Western world was ruthlessly bleeding the Middle East by not paying fair market value for oil. It had to be stopped. A more appropriate price? At least US$100 a barrel, he once said, maybe even US$200.

 

Mission accomplished. Suddenly a world in which oil costs well over US$100 a barrel isn't just the dream of a terrorist bent on destroying the United States and its allies. It is reality. Oil recently hit US$135 a barrel, more than double where it was a year ago. And the once unimaginable prospect of oil at US$200 a barrel is gaining currency among the world's most respected oil watchers. Jeff Rubin, chief economist with CIBC World Markets, predicts oil will rocket to that level by 2012. Goldman Sachs figures we'll get there even sooner. Other analysts, meanwhile, have begun to float more startling figures, of oil at US$250, even US$300 a barrel.

 

The world is now facing an oil crisis few predicted and even fewer are prepared for. It's impossible to understate how crucial cheap oil has become to our way of life. It's shaped how we get our food, what we buy, where we live, how we work, and the way we play. Cheap oil opened up the world to millions of travellers via discount airlines, allowed thousands to buy their first homes in sprawling suburbs, and enabled consumers to get their hands on ever cheaper goods, shipped just in time, from around the globe. Now economists say all of that is at risk. Exactly how the end of cheap oil will change our lives is still far from clear. But change them it will, in profound and dramatic ways. If the price of oil continues to climb to US$200 a barrel, it won't just be that people will have to drive a little bit less or skip the family trip to Disneyland. Across the board the cost of living will explode, not just for luxuries but basic necessities as well. To hear some experts tell it, we're headed for nothing short of Oilmageddon. At the very least, they say, the age of plenty is over.

 

The pain has already begun. Gasoline prices in Canada now stand at around $1.30 per litre, up 30 per cent over the past year. That jump has hit car sales. Ford Motor Co. is slashing production of SUVs and pickups, putting thousands of already struggling auto workers out of their jobs. A poll last week found half of Canadians have either cut back on how much they drive or are planning to. And with gas prices so rich, a wave of gasoline theft has swept the continent. Forget locking gas caps, thieves are crawling under cars with cordless drills to drain tanks of their liquid gold. The police, meanwhile, may have to chase down those criminals on foot. Rising prices have many police departments parking their cruisers. In Georgia, the state police have been ordered to cut back driving time by 25 per cent.

 

In the skies, the price crunch is even worse. The airline industry is grappling with a 95 per cent jump in the price of jet fuel and companies are passing those costs right along to passengers through fuel surcharges of as much as $130 for a round trip ticket. Air Canada and American Airlines have even started charging for checked bags, while AA slashed 1,300 flights last week to cut costs. Air Canada is thinking of similar cuts. Now, there are fears of bankruptcies akin to the industry's post-9/11 meltdown.

 

It seems every day companies announce another round of price hikes, for everything from beer and vinyl siding to Starbucks coffee and diapers. Even then, rising energy prices take time to filter their way into the economy. Experts say we're only now feeling the effects of US$100 oil, and with no sign of a return to the carefree days of double-digit crude, the real storm has just begun to gather. Should oil hit US$200 in the next few years, the world will be scarcely recognizable.

 

James Howard Kunstler isn't one to mince words about what's coming. "The suburbs will turn to slums, salvage yards and ruins," says the author of the book The Long Emergency. "Expensive oil will thunder through the economic system cutting a wide swath of destruction." As Kunstler sees it, sometime during this decade half of the world's recoverable petroleum will have been extracted. From here on out, we'll be living on a dwindling supply of hard-to-reach fossil fuels. This is the cornerstone of the "peak oil" theory and Kuntsler foresees apocalyptic fallout. It will become unfeasible for people to drive from the burbs to distant jobs, and as the petroleum refugees flee their McMansions, the sprawling cul-de-sacs will turn to ghost towns. As the global supply chains collapse, major importers like Wal-Mart will go out of business.

 

Kunstler has often been dismissed as a crank. And the dismal picture he paints of the future comes straight out of the wildest fantasies of the anti-consumer, anti-development crowd. Yet the fact is a growing number of economists are starting to echo similar ideas that just two years ago were seen as the domain of the lunatic fringe. As the predictions for $200 oil grow louder, so too does the realization that huge changes are coming.

 

The agony that's been felt at the pumps so far is nothing compared to what will transpire if oil keeps marching higher, and the repercussions will ripple out from there. More than 60 per cent of the oil consumed in North America goes to fuel transportation, with the largest amount used to power passenger vehicles and transport trucks. By some estimates, eight out of 10 Americans rely on cars to get back and forth to work. (In cities like Toronto, that figure is more like 55 per cent, according to Statistics Canada.) If oil tops US$200 a barrel, Rubin at CIBC World Markets has said the average price of gasoline could reach $2.25 per litre, a 75 per cent jump over what it is today. At that price, it would cost $135 to fill up the average gas tank; $180 for those with deep enough pockets to still be driving SUVs (double that for the two-car garage suburban set). Someone earning $12 an hour, the average wage of Canadians between the ages of 15 and 24, would have to put in a day and a half's work just to afford a fill-up. And for those who get behind the wheel of a large vehicle for a 100-km round trip commute, the average annual fuel bill could surpass $10,000 — enough to buy a sub- compact car with better mileage. "If the price of oil gets to US$200 a barrel, one of my cars is going up on blocks," says David Carson of the Canadian Centre for Energy, a non-profit research group in Calgary, referring to his gas-guzzling Mustang. "I really envy my daughter for her Honda Civic."

 

Long before gasoline prices get that high, though, many people will have radically altered their driving habits. Cathy Hay at MJ Ervin & Associates, a Calgary firm that tracks gasoline prices, believes $1.60 gas could be the tipping point at which people dramatically cut back. Whether suburbs like Markham, Ont., Richmond, B.C., and Laval, Que., are destined to waste away is a matter for debate. But there are signs the sudden rise in oil prices has already had a profound impact on real estate prices in the U.S. Last month Joe Cortright, an economist in Oregon, published a report for the Chicago-based organization CEOs For Cities that looked at downtown versus suburban housing markets. He found far-flung neighbourhoods had both greater price declines and higher foreclosure rates than those closer to a city's core.

 

What's more, he concluded the current housing crisis is about more than subprime mortgages. Years of rising gasoline prices have simply made suburban living too expensive. "The collapse of the housing bubble, punctured by the gas price spike, marks a watershed point for the nation's suburbs," Cortright wrote. "As the more severe decline in housing prices on the urban fringe over the past year illustrates, $3 a gallon gas has made low density development a false economy across the nation."

 

And don't think for a moment that Canada, even with its surprisingly resilient housing market, can escape unscathed. Experts see two separate real estate markets forming — neighbourhoods that offer easy access by bicycle and public transit, and those accessible only by car. "They're going to be the losers in the next economic downturn," says Anthony Perl, director of Urban Studies at Simon Fraser University. "Those people who didn't think it mattered where you lived and felt transportation would always be cheap made the wrong bet. They probably didn't even know they were betting."

 

Regardless of whether people live downtown or in the burbs, the soaring cost of heating residences through the chilly winter months will affect everyone. The price of home heating oil, at $1.29 per litre, has already jumped 115 per cent since 2004, gaining 30 per cent so far this year, according to data from MJ Ervin. Roughly 10 per cent of Canadians heat their homes with oil, particularly those in rural communities who must already contend with sky high gasoline prices. The annual bill to heat an older home with an old oil furnace has, in some cases, reached $4,000 a year. Mary Maifrini, who co-owns Ernie's Woodstove Repairs and Sales in Durham, Ont., says there's been an increase in sales at the store as oil prices have risen. "That's what frustrates people the most about oil — they can't control it," she says. And that sense of helplessness applies even to those who heat their homes with natural gas and electricity. Prices for natural gas in Ontario are set to jump 20 per cent on July 1.

 

Even if Canadians ratchet down the thermostat to save a few bucks come winter, there's almost no way to avoid the crippling effect that US$200 oil will have on the price of everything we buy, from food to home electronics to airline tickets. It's often said that it takes 400 gallons of oil equivalent to feed each person in America every year. The stuff is crucial to getting food from the farm to our tables, whether it's in the production of fertilizer, harvesting, processing or transporting fruits and vegetables halfway around the world. And as oil prices reach the stratosphere, there will be more demand for alternative fuels such as corn and grain-based ethanol, putting even more upward pressure on food prices. There have already been riots around the world as people find they can no longer afford to feed themselves the way they had just a few months ago. And just as bananas would emerge as luxury items if oil continues to climb, economists warn people will find the era of cheap clothes and home electronics will screech to a halt. Marine shipping rates have already jumped 72 per cent since last year. In the same way airlines are passing their costs on to consumers, so too will manufacturers. "Our way of life depends on freight transport and the whole thing is beginning to unravel," says Richard Gilbert, a transportation consultant in Toronto and one of the authors of Transport Revolutions.

 

No sense worrying about the price of airline tickets though — chances are, you won't be flying much in the future anyway. While US$100 a barrel oil has airlines in a panic, at US$200 the industry's business model completely falls apart. "Aviation will be truly, dramatically changed," says Gilbert. Short commuter flights from Toronto to Montreal, or Calgary to Edmonton, will be phased out. Air travel will only work with large, fully occupied planes flying medium distances, says Gilbert. Most air travel will need to be replaced by European-style rail networks. There are about 330 airports in the U.S. today with scheduled flights. Gilbert predicts by about 2025 that number will dwindle to 30 or 40.

 

In other words, after years of feeling like the world really was shrinking, our big old blue sphere is going to start seeming awfully large again, and it will redraw everything from how we work to how we socialize. "I think people will look back on the 1940s to early 2000s as an exceptional period and it will seem very strange that people would fly off to Las Vegas or Florida for the weekend, or drive their kids 20 km to play hockey and take piano lessons," says SFU's Perl. "Some people are going to have to adjust every aspect of their lives."

 

The idea of a 21st-century oil spike is by no means new. Back in the early 1980s it was widely believed that by the year 2000 oil supplies would falter and prices would hit US$100 a barrel. But throughout the 1990s, prices remained amazingly stable around the US$30 a barrel mark. By the turn of the century, oil was hitting 30-year lows and those dire predictions seemed downright crazy. Turns out they were just a few years off. Last week, the International Energy Agency said it will re-examine the oil supply in 400 major oil fields around the world — a sobering acknowledgement that there may be even less oil than once thought. Even industry insiders are waking to the idea that the world is nearing the supply wall. Last year, former U.S. energy secretary James Schlesinger declared, "the battle is over, the peakists have won." Peak oil theory isn't about the world running out of oil — that won't happen anytime soon. It simply describes the point at which the supply of oil can no longer keep up with the world's growing demand, which these days is coming more and more from the fast-growing economies of China and India. When supplies run short oil prices don't just go up, they skyrocket. A 2005 U.S. government report concluded that a four per cent shortfall would result in a 177 per cent increase in oil prices. It is possible that new reserves, like Alberta's tar sands, will help temper that jump in prices. But there's no avoiding the fact that the world has entered a whole new realm.

 

There could yet be a small silver lining in this grim future. In a society where drive-through banks and communities without sidewalks are commonplace, overweight North Americans might do well if forced to park their cars and walk a little. And there's no shortage of ways in which people could cut back their energy use. The U.S. Department of Transportation found that 67 per cent of car travel and 50 per cent of air travel is discretionary. "Oil has been so cheap and food so cheap that we use it in incredibly extravagant ways," says Gregory Clark, an economist at the University of California at Davis. Clark argues society could adapt in the long run to a world of US$200 or even US$500 a barrel oil. "In the ordinary course of technological advance we're getting about two per cent richer each year. A doubling of oil prices, at maximum, would take away about two or three years of growth." Overall, incomes might decline by about eight per cent, he says.

 

But even optimists like Clark admit that a painful period of adjustment is unavoidable. North America's car-crazy cities won't transform overnight. And even seemingly modest declines in income resulting from rising fuel costs can seem crippling to those already struggling in tough economic times. If the U.S. isn't already in a recession, as many economists believe, rising oil prices could provide the final nudge into a long and tumultuous downturn. Ditto for Canada, which last week reported a jump in inflation for the first time in six months, thanks largely to rising fuel costs, according to Statistics Canada. A 2005 report by the U.S. Department of Energy warned a sustained rise in oil prices would trigger inflation and unemployment and the "degradation of living standards." "The world has never confronted a problem like this," it concluded, "and the failure to act on a timely basis could have debilitating impacts on the world economy."

 

Unfortunately, failing to act in a timely way is precisely what we seem to be doing. "You can't replace hundreds of millions of private automobiles throughout the U.S. overnight. You can't even do it in five years," says Daniel Lerch, author of Post Carbon Cities. Public policy — from decisions to invest in multi-billion-dollar freeway projects to airport expansions — remains stubbornly rooted in the idea that oil will be available and affordable far into the future, says Lerch.

 

The cost of oil, however, is beginning to hit public purses. If filling your SUV up with gas has you feeling queasy, think how the U.S. military must feel. It buys about 340,000 barrels of fuel a day. Its bill last year was US$13.6 billion — a nearly 25 per cent jump from the previous year. It is now trying to cut its oil use and experiment with alternative fuels, but the widespread use of such alternatives is at least a decade away — probably too far for politicians in search of a quick policy fix. Hillary Clinton ran into trouble recently when she proposed a summer gas-tax holiday to ease pump prices. A nice gesture, but one that would accomplish nothing, except maybe further boost demand for gas, economists pointed out. Any serious public talk about energy has focused squarely on global warming — "a huge distraction" that has got in the way of dealing with the much more urgent issue of oil security, says Gilbert.

 

In Canada, politicians will likely find themselves fighting new fires, like the growing division between oil-rich Alberta and Newfoundland, and the erstwhile economic heartland in Ontario and Quebec, with their ailing manufacturing sectors.

 

All signs suggest that planning for real change won't come until it's too late. "People don't wake up until things are flying apart," says Matt Savinar, a California lawyer who runs the website Lifeaftertheoilcrash.net. Savinar is the kind of observer who not long ago would have been considered a dooms-day prophet. Nowadays, he says he feels more frustrated than he does vindicated by the surging oil prices. Everything that he's been preaching is coming true, but still no one is listening. "I bet that once we get within a few years of oil production peaking you'll see the U.S. invade the last large deposits. Oh wait, that already happened. You'll see rising food prices. Oh wait, that already happened. You'll see sky rocketing oil prices. Oh wait, that already happened. If you imagine your worst nightmare, we're right on track for that to come true. Just look at the news."

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Pétrole: la rencontre de la dernière chance ?

 

* Presse Canadienne,

* 20 juin 2008

 

Les pays producteurs et consommateurs de pétrole se réunissent dimanche à Djeddah, en Arabie saoudite, pour tenter d'enrayer la flambée des prix de l'or noir.

 

Cela étant, aucun remède pour faire baisser les cours du baril sur le court terme ne devrait sortir de la rencontre, selon différents observateurs.

 

Le Canada sera représenté par le ministre fédéral des Ressources naturelles, Gary Lunn.

 

L'Arabie saoudite, qui a convoqué la réunion, veut faire passer le message que l'Organisation des pays exportateurs de pétrole (Opep) fera ce qu'elle peut pour stabiliser les prix, mais que les pays producteurs ne sont pas responsables de l'envolée des cours. Un effort collectif incluant les pays consommateurs est nécessaire pour faire baisser les prix, a insisté la riche monarchie pétrolière ces derniers mois.

 

Durant la réunion, Riyad, premier producteur mondial de pétrole, devrait officialiser sa décision d'augmenter sa production journalière de 200.000 barils pour la porter à 9,7 millions de barils. Il devrait également signer un accord avec le groupe français Total pour la construction d'une raffinerie

 

à Jubail (est) capable de traiter 400 000 barils par jour et dont la mise en service est prévue en 2012.

 

Mais les marchés ne sont pas impressionnés par les initiatives de l'Arabie saoudite. La nouvelle augmentation annoncée de la production saoudienne qui intervient après une autre hausse de son offre de brut de 300 000 barils/jour le mois dernier, n'a pas fait baisser les prix.

 

Trente-cinq pays, 25 compagnies pétrolières et sept organisations seront présents à Djeddah, a annoncé le ministre saoudien du Pétrole Ali al-Naimi dans un communiqué jeudi. Parmi les participants, sont attendus le secrétaire général de l'Opep Abdalla Salem El-Badri, le Premier ministre britannique Gordon Brown, le secrétaire américain à l'Energie Samuel Bodman ou encore Noe Van Hulst, de l'Agence internationale de l'énergie.

 

M. Al-Naimi espère que la réunion produira des "résultats positifs qui contribueront à stabiliser les marchés pétroliers". Le roi Abdallah d'Arabie saoudite a convoqué la conférence le 9 juin, trois jours après la plus forte hausse du prix du pétrole en une journée qui avait vu le baril gagner quelque 11 dollars pour dépasser les 139 dollars à New York. Selon le monarque saoudien, la réunion vise à débattre de la réponse à apporter à la hausse "injustifiée" des prix.

 

Les Occidentaux pressent les pays producteurs d'augmenter leur offre. Mais Riyad, des économistes et des observateurs soulignent que le problème ne réside pas seulement dans une insuffisance de la production.

 

Ils mettent en cause la spéculation, les taxes élevées sur le brut et ses produits dérivés dans les pays occidentaux, la faiblesse du dollar et l'instabilité au Moyen-Orient, notamment les violences en Irak et les tensions entre l'Iran et la communauté internationale.

 

Selon l'économiste saoudien Ihsan Bu-Hulaiga, il est de la "responsabilité collective" des producteurs et des consommateurs de discuter ensemble du problème. "Lorsque l'on parle du marché du pétrole, on parle de l'offre et de la demande", explique-t-il. "Cela ne peut pas être la demande seule ou l'offre seule. Pour faire baisser les prix, il faut agir sur les deux."

 

Reste que Jim Ritterbusch, président du cabinet américain spécialisé Ritterbusch and Associates à Galena (Illinois) ne voit "rien sortir de cette réunion qui aura un impact appréciable sur les prix du pétrole dimanche soir ou lundi matin".

 

Les analystes craignent que la réunion ne s'enlise dans des querelles stériles sur les responsabilités de chacun dans la situation actuelle au lieu de s'occuper des vrais problèmes. Quand autant de pays sont invités à une telle réunion et que rien de concret n'en sort, "on ne change pas la philosophie du marché", avertit Frank Verrastro, du Centre pour les études internationales et stratégiques (CSIS), basé à Washington.

 

http://www.lesaffaires.com/article/0/energie/2008-06-20/479398/peteacutetrole-la-rencontre-de-la-dernietegravere-chance-.fr.html

 

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Alberta ignores U.S. oil critics at its peril

 

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Don Martin, National Post Published: Wednesday, June 25, 2008

More On This Story

 

There was a time when being Alberta's man in Washington D.C. involved golf rounds and cocktail circuits of non-stop fun.

 

As America's most reliable energy supplier, the province rated a red-carpet reception in a national capital thirsting for secure oil. Not any more.

 

Gary Mar is not yet a political pariah, but he's running an Alberta office in the Canadian embassy that's fighting negative perception battles on multiple fronts.

 

Arguably the brightest Cabinet minister to grace former premier Ralph Klein's front bench for more than a dozen years, he's been representing the province in the U.S. capital for less than a year now and finds himself under increasing siege by an organized environmental backlash against the Alberta oil sands.

 

Mr. Mar is continuing to fight the threat of a U.S. energy bill that would prohibit federal agencies, including energy gobblers like the air force and post office, from buying oil, such as from the oil sands, that gives off above-normal emissions during production.

 

He opened a Washington newspaper last week on the day Senator John McCain was visiting Ottawa to headlines indicating the Republican presidential nominee rates Middle East oil preferable to the "dirty" oil sands version.

 

He watched this week as a gathering of U.S. Mayors pushed for a boycott of tar sands product as environmentally unacceptable energy. Then came the kicker: Democratic presidential nominee Senator Barack Obama is talking tough against importing oil that emits excessive greenhouse gases, presumably including oil from the oil sands.

 

It seems incredible that a secure source of a product that rising rapidly in price amid dire predictions of an imminent global shortage, suddenly seems vulnerable to a boycott from a nation depending on it for almost 10% of its consumption.

 

Mr. Mar takes a safe line in describing his mission. "It's important that people understand we offer an important, safe, secure, environmentally responsible source of oil," he told me this week. Easy to say. Harder to sell. And Mr. Mar knows it.

 

On a macro level, there's not much common sense behind the environmentalist drive to divert oil sands product to faraway locations.

 

If the pipeline to the south is shut off, heavy oil will be shipped in gas-emitting tankers to China or India where it will be given a dirtier refining and burned in less fuel-efficient cars.

 

Besides, once the oil is floating on the high seas, any U.S. boycott could be circumvented by international brokers directing tankers to unload at any U.S. port, notes Mar.

 

But a weird irrationality is taking over U.S. politics on environmental matters and Alberta needs to be cautious about dismissing it as a lunatic fringe of green fanatics worried about dead ducks in the tar ponds. After all, you can forget federal or regional politicians if you want an accurate read on the public mood. The best pulse-taking politicians are the basic old grey mayors.

 

That's why the embargo proposed by a U.S. conference of mayors this week can be interpreted as the proverbial dead canary in the coal mine: a warning that danger is about.

 

Alberta argues it's better for America to deal with the emissions devil it knows instead of some unpredictable military regime or royal family that might cut off supply on a whim.

 

True, but the reputation of the province and indeed the country requires more than an image makeover or some vague regulations that cut emission intensity without reducing the actual discharge.

 

Signs of progress must be displayed soon to reassure Americans that while it's hardly green, the oil sands are aiming to shake the label of The Most Destructive Project on Earth assigned to it by Toronto-based Environmental Defence.

 

There must be a cleaner way delivered faster and, given that Alberta has posted a $4.6-billion surplus, amid forecasts of a $12-billion surplus this year if world oil prices remain high, it seems the province can afford the damage control.

 

But a top official from Premier Ed Stelmach's office recently confided to a private policy forum in Ottawa that piping carbon into underground sequestration will absorb 70% of the oil sands discharge, a figure most experts deride as a pipe dream. Deputy minister Ron Hicks also warned that the province would not accept a national or continental cap because it would transfer too much wealth from Albertans to "others".

 

That's an understandable reaction for a province sensitive to outside interests coveting its resource revenue mother lode.

 

But the U.S. mayors' stand will soon be echoed by state and national politicians. And that means Gary Mar's life in D.C. may never be fun again.

 

dmartin@nationalpost.com

 

http://www.nationalpost.com/most_popular/story.html?id=613475

 

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Signs of progress must be displayed soon to reassure Americans that while it's hardly green, the oil sands are aiming to shake the label of The Most Destructive Project on Earth assigned to it by Toronto-based Environmental Defence.

Really?

 

 

There must be a cleaner way delivered faster and, given that Alberta has posted a $4.6-billion surplus, amid forecasts of a $12-billion surplus this year if world oil prices remain high, it seems the province can afford the damage control.

L'Alberta aura un surplus aussi ou plus gros que le fédéral??

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Je ne vois pas quel est le gros problème?! SI les américains ne sont pas content avec le pétrole qui viens de l'Alberta, l'Alberta n'a qu'a vendre son pétrole à l'Inde ou la CHine. Ils seront très heureux de l'acheter!!

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