The Honourable Ralph Goodale Minister of Natural Resources Canada
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| The Honourable Ralph Goodale
Minister of Natural Resources Canada Minister responsible for the Canadian Wheat Board Federal Interlocutor for the Métis and Non-Status Indians Chair of the Cabinet Committee for the Economic Union to the World Petroleum Congress Calgary, Alberta June 12, 2000 Thank you, Mr. van der Meer, and good morning, ladies and gentlemen.
- conventional oil and gas; - heavy oil and bitumen; - the oil sands; - our work offshore; and - in the far North. All of which have contributed enormously to our strength and well-being as a nation. Here’s a little-known piece of trivia for you: in the 1860s, just a few years before our birth as a nation, Canada incorporated the world’s first oil company. We also dug North America’s first oil well at Oil Springs, Ontario. We then went on to overcome extreme weather and a challenging physical landscape to develop our resources and supply infrastructure. And we developed technologies that are sought after worldwide. Since those heady days, we’ve never looked back. Canada is still exploring. Still overcoming the elements. And still developing innovative, world-class technology to meet the exacting conditions of the petroleum industry. I’m biased, of course, but I think Canada is a strong example of the “power of diverse experience.” I’d like to tell you a bit about our national oil and gas industry. To share some of our success stories, and how they came about. And, finally, to invite you to view Canada both as a place to invest, and as a source of exportable expertise that can rise to any challenge, anywhere. Let me begin with a few numbers to put our industry in perspective. In 1998, Canadian oil and gas production contributed some $26 billion to Canada’s GDP. Oil and gas exports added more than $13.2 billion to Canada’s balance of payments. The industry’s capital expenditures amounted to another $13.9 billion. And it employs tens of thousands of Canadians in top quality, highly skilled jobs. I’m proud to say that Canada has the world’s largest pipeline network. About 540,000 kilometres of pipeline carry two-thirds of our total energy supply across the country. By the end of 1999, the cumulative production of oil from our western sedimentary basin alone totaled 21 billion barrels. The production of natural gas from the same basin totaled 113 trillion cubic feet. We have oil and gas projects right across the country. Here in the west, companies are planning about $30 billion worth of development in the oil sands over the next decade. There are an estimated 666 million barrels of recoverable oil off the east coast of Newfoundland. Over the next six years alone, the Hibernia project is expected to produce 125,000 barrels of oil a day. There are another 17 significant oil discoveries in the region yet to be developed. The Canadian Association of Petroleum Producers pegs the future potential at about 13.6 billion barrels of conventional crude oil off Canada’s east coast. Non-conventional resources are estimated at an astonishing 2.5 trillion barrels, of which some 300 billion barrels can be recovered with current technology. The east coast is also home to the Sable Island offshore energy project. According to current plans, the companies involved will produce more than 85 billion cubic metres of gas. This will service parts of the Maritimes and the eastern United States until 2025. And of course, there is also huge potential in Canada’s far north. Canada is determined to develop all these new frontiers the same way we succeeded in the past: with our commitment to innovation, fair regulation and sustainable development. Let me touch on each in turn. First, innovation. Our physical landscape across Canada is unforgiving. Out of sheer necessity, we’ve had to develop leading-edge technology to get the job done. And we are continuously investing to find ways to get the job done better, cheaper and faster — with both social and environmental responsibility. Canadian natural resources companies are among Canada’s top investors in research and development, new science and technology. Our expertise in reservoir imaging, well stimulation and production optimization has doubled recovery rates in mature fields. At Sable Island, new drilling technologies have allowed the operator to use a single platform to draw gas from a wider portion of the gas fields. That reduces costs significantly. In Saskatchewan, using horizontal wells and enhanced recovery techniques to sweep out more oil gives old wells a new lease on life. In one basin, a typical horizontal well can recover about two to three times more than a typical vertical well. In many cases, we’re extracting oil that would otherwise have stayed in the ground. Canadian private sector petroleum companies lead in developing and applying these new technologies. This kind of innovation is possible, in part, because government and industry work together. For example, here in Alberta, my department’s CANMET Western Research Centre is looking to find better ways to produce and use oil sands and heavy oil — innovations which can be taken up by industry in the field. Then there’s the Geological Survey of Canada, also within my department, which does the scientific and technical spadework preparing the path for industry. Next door, in my home province of Saskatchewan, government, industry and academia have set up the Petroleum Technology Research Centre to develop technologies to recover previously unrecoverable oil. To improve recovery from marginal wells. To extend the lifetime of existing pools. And to make production more economical — especially when prices are low. The second reason for Canadian success is our commitment to a regulatory regime that balances economic, social and environmental interests. When governments establish an attractive and competitive investment climate, everyone — industry, consumers and governments — stands to gain from increases in economic activity and trade. For that reason, we’ve developed fair, predictable and transparent energy regulations to encourage investment and efficiency. More than a decade ago, for example, we deregulated the natural gas market. The result? Supply has increased and new pipelines have been built to meet an ever-growing demand. In Atlantic Canada, we’re seeing a boom in offshore exploration and development. That means jobs and wealth in what was once seen as Canada’s most economically depressed region. Deregulation involves consultations among all interested parties—from industry to environmental groups to communities. Our goal is to balance everyone’s interests. In the oilsands of northern Alberta, energy companies continue to work successfully with local Aboriginal residents, tailoring projects to meet their concerns. They have done this in the spirit of cooperation, investing time and money. Our oil sands developments are now actively training and involving Aboriginal people in the operation of their sites. This leads me to our third tool for success: a commitment to sustainable development — integrating good economic policy with good environmental policy, and good social policy. Through largely voluntary efforts, the petroleum industry has made significant progress in assuming responsibility for the environment. For example, the oil sands industry has projected that its greenhouse gas emissions per unit of output will be cut nearly in half (by 47 percent) from 1990 levels by 2010. Many companies have also joined the Canadian Voluntary Registry and Challenge, or VCR Inc. This is an industry-led effort in which companies commit to reducing their greenhouse gas emissions and measure and report their results. After only three years of operation, we’re seeing some very positive benefits. We all tend to measure ourselves against international standards. The new Dow Jones Sustainability Index tracks major corporations around the world on the integration of economic, environmental and social performance. Four Canadian companies are in the very top rank of this global stock market index of 18 companies worldwide, and all four are resource-based: Enbridge, TransAlta, Suncor and Dofasco. In doing our part to combat the global challenge of climate change, what Canada is seeking is an astute “marriage” between smart economic performance and smart environmental performance. Canadians want to have both, simultaneously. Our mission is to find those most intelligent means to deal effectively with greenhouse gas emissions, while maintaining our productivity and enhancing our competitiveness. That’s a tough “circle to square” (so to speak). We know that. Among many other things, it will demand sensible and cost-effective international implementation tools, and the rapid development and deployment of break-through technologies. Technology plays a big role in our drive to sustainability. For the past decade, for example, Natural Resources Canada has worked with government and industry in Weyburn, Saskatchewan to sequester carbon dioxide. As a result of this partnership, and exciting project got off the ground last spring. It will involve the use of carbon dioxide as an enhanced recovery agent in an aging old patch, under the leadership of PanCanadian Petroleum Limited. Weyburn is a win-win situation that will produce more oil and allow for the underground storage of millions of tonnes of CO2. Over the 25-year life of the project, the unit will produce an additional 122 million barrels from the field and maintain and create jobs in Canada. It’s good for the economy and it’s good for the environment. As a final word on sustainable development, Canadian industry also leads in developing technologies related to alternative and renewable fuels, and energy efficiency. For example, one company is producing ethanol from agricultural by-products like corn cobs and straw. Another is making hydrogen from water through electrolysis. And recently, a Canadian oil sands company announced it will invest $100 million in renewable energy over the next five years. I don’t pretend that Canada has all the answers. But I do believe that Canadian technologies and processes can benefit many countries, particularly those with emerging economies. By increasing their energy efficiency. By reducing their greenhouse gas emissions. And by helping them expand their economies. Canada works with many countries, bilaterally and multilaterally, on oil and gas issues. Earlier this year, I visited Asia on an energy-related mission. The year before, I went to Latin America. We believe that clear and consistent legal, fiscal and regulatory frameworks will lead to more long-term foreign investment — investment that will bring prosperity to everyone involved. That’s why we participate in the Hemispheric Energy Initiative and APEC. The regulatory environment is evolving, especially for gas, and we believe we have useful experience to share. We travel to wherever we think we can showcase Canadian expertise and where we can learn from others. Or else we invite the world here. That’s why we are so pleased to host the World Petroleum Congress for the first time. When you do business with Canada, you benefit from more than a century of expertise and experience in the oil and gas industry. We’ve had an illustrious past, and we have a bright future ahead. At the outset, I mentioned our first oil field established in 1858. Over the past 140 odd years, Canadian industry has gone on to produce more than 21 billion barrels. And experts say that we’ve only just begun to tap the full extent of our resources. In the future, we can never let up — because the challenges will never let up. To continue to meet the energy needs of our growing national economy and thirsty international markets — and to do so in a manner that meets public expectations about industry conduct and government’s responsibility — we must aspire to be nothing less than among the very best at: - stewardships; - explorations; - development; - transportation; - and marketing and exporting. We must be the most high-tech, the most environmentally friendly, the most socially responsible, the most productive and competitive — a leader in successful sustainable development. Proving to our critics, at home and elsewhere, that we can and we do “do it right.” I would close by inviting you to visit Canada’s displays at the Global Business Opportunities Centre. I would also remind you that the National Petroleum Tradeshow is taking place as we speak in Calgary. I know your schedules are packed, but I’m sure you’ll find these are useful venues to make contacts, share ideas and build opportunities of mutual benefit and advantage. It is now my pleasure to introduce speakers who will be pleased to share their own insights about the “power of Canada’s diverse experience:” The Honourable Stephen C. West, Member of the Legislature for Vermilion-Lloydminster. Born in London, Ontario, Dr. West studied at the Kitchener-Waterloo Collegiate Institute, and earned his Doctorate in Veterinary Medicine at the Ontario Veterinary College. He was first elected to the Alberta Legislature in May 1986 and has held a number of cabinet posts, including Minister of Recreation and Parks, Solicitor General, Minister of Municipal Affairs and, until just recently, double duty as Minister of Resource Development and Acting Provincial Treasurer. On June 2, 2000, he was appointed Provincial Treasurer. Mr. Robert Peterson, Chairman, President and CEO of Imperial Oil Limited. Mr. Peterson joined the producing department of Imperial Oil in 1960 and held a variety of positions with the company and its affiliates in Calgary, Edmonton, Tulsa, Houston, New York and Toronto. He is past Chairman of the Conference Board of Canada, a director of the Royal Bank of Canada and the C.D. Howe Institute, and a governor of Junior Achievement Canada and the Canadian Olympic Foundation. |