Oil sands crucial to energy mix: Imperial CEO
By Claudia Cattaneo, Financial PostMay 15, 2009
Canwest News Service
CALGARY -- Canada’s oil sands represent such a large part of the remaining world oil resources it’s unrealistic to exclude them from North America’s future energy mix, said the CEO of Imperial Oil Ltd.
Despite a push to stop or contain their development, Bruce March said Alberta’s deposits represent 40% of known oil resources in the world that are not under the control of national oil companies.
Imperial Oil, controlled by Exxon Mobil Corp., is one of Canada’s top oil sands companies.
He said it’s one of the reasons U.S. President Barack Obama seems to be looking for a pragmatic solution to the oil sands’ environmental challenges, rather than rule them out as a supply of energy to the United States.
"When he came to Ottawa [in February], he could have said a lot of different things, and he didn’t," Mr. March said after speaking about the future of energy policy in North America to the inaugural conference of the School of Public Policy at the University of Calgary. The company is one of the financial backers of the new school, headed by Jack Mintz.
"His plan will have less reliance on oil in the future, but his plan also has a strong factor of energy security," Mr. March said.
"I think he appreciates Canada’s current position as an energy supplier, and I think he trusts the dual challenge of oil sands around the environment will get solved and will get solved up here in Canada very effectively."
U.S. legislators are debating a climate-change bill that would result in new environmental compliance costs, making the oil sands, already the world’s most expensive oil, even more expensive to produce. The bill proposed by Henry Waxman, a California Democrat, would establish a cap-and-trade system and aim to cut emissions of greenhouse gases by 17% by 2020.
Mr. March, a native of Middleport, N.Y., a former refining executive with Exxon, said the greenhouse gas emissions targets being discussed cannot be achieved with current technology.
If legislators remain committed to achieving those goals, he said one solution would be to reduce economic output, which would lead to a lower standard of living than people are enjoying today.
Mr. March was also critical of the low carbon fuel standard, another political solution to reduce greenhouse gases that has been adopted in California and that could become a national U.S. policy.
"In general, no one knows how to make this fuel -- a fuel that has 10% less lifecycle greenhouse gas emissions than the baseline as they defined it today," he said. "You have to go to close to 100% ethanol to achieve that."
Mr. March said it’s critical for public policy to encourage funding of technology development at an early stage.
Even the toughest challenges have a way of getting solved with new technology, he said.
Still, he said energy has become more political today than it’s ever been, which can lead to emotional responses that have not been tested.
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