Oil Abundance in Canada Provokes Anxiety

Author: Spencer Ogden
Date posted22/Nov/2011
Author: Spencer Ogden

The helicopter swooping over once- pristine spruce forests provides a close-up view of why the province of Alberta, Canada, is among the planet’s most coveted -- and contested -- petroleum hot spots.

North of Fort McMurray, a boomtown serving tens of thousands of migrant workers, Syncrude Canada Ltd.’s oil-sands mine stretches 74 square miles.

Rivals Exxon Mobil Corp. (XOM) and China Petroleum & Chemical Corp. (386) each have bought a piece of Syncrude, one of the dozens of companies that are blasting, digging and steaming soil laden with 143 billion barrels of molasseslike crude called bitumen, Bloomberg Markets magazine reports in its January issue. Only Saudi Arabia, with 264 billion barrels, and Venezuela, with 211 billion, enjoy greater proven reserves, a BP Plc energy review found in June.

Some of the world’s biggest energy producers have poured C$123 billion (US$120 billion) into Canada’s oil sands since 1997. The Canadian Energy Research Institute, or CERI, predicts that these companies will pay another C$137 billion by 2020 to tap the Florida-sized region’s unique advantage: rising oil production taking place in a stable democracy that’s close to the massive American market.

‘Pot of Money’

Prime Minister Stephen Harper, who began his career in the Edmonton mailroom of an Exxon unit called Imperial Oil Ltd., is encouraging the boom. He wants to pump as much as possible from reserves that were valued at $14 trillion in mid-November.

Harper, 52, is creating jobs and seeking new markets for a country that now sends 99 percent of its petroleum exports to the U.S. Environmentalists, alarmed by spills, desecrated forests and rising carbon emissions, want a moratorium on oil- sands projects not yet approved as they battle to curb the use of fossil fuels.

“Oil sands are a big enough pot of money to change the landscape,” says Peter Wells, chairman of Abingdon, England- based Neftex Petroleum Consultants Ltd. “That’s why everybody’s fighting over them. The Chinese want strategic supplies. Oil companies want profits. Environmentalists want to keep Alberta looking as it was.”

The U.S. government leapt into the fray in November. The State Department announced that it was delaying a decision on TransCanada Corp. (TRP)’s proposed 1,661-mile (2,673-kilometer) pipeline from Alberta to the Gulf of Mexico. President Barack Obama, 50, pressured by environmentalists and citizens along the route, said his administration wanted to protect health, safety and natural resources on the pipeline’s path.