Pricier oilfields inevitable
Royal Dutch Shell, ExxonMobil and the rest of the oil industry may face higher costs to exploit Canada's oilsands because of efforts to rein in climate change. A Canadian mandate to bury carbon dioxide emitted during the process of extracting the oil may add between $2 and $13 a barrel to production costs, according to the Pembina Institute, an Alberta-based environmental group. Mining crude from the area now costs around $60 a barrel. The additional costs are likely to feed through to consumers, leading to higher energy bills and contributing to inflation. Canada's increasing costs "are important in how the market looks to the world," said Michael Wittner, Societe Generale's head of oil research in London. "One way or another, it will push up prices for Canadian oilsands," he said. The European Union, Canada, Norway and Australia are among nations setting rules to force industries that use or produce energy to store carbon dioxide underground, instead of venting it into the atmosphere. "It is not only about oil prices -- you have to take a long-term view on CO2 regulation, royalties and taxation, and then see how unique your technology is," Jeroen van der Veer, ceo of Shell, told reporters while attending the International Energy Forum in Rome on Wednesday. "We hope to produce there for decades," he added in an interview with Bloomberg Television.
(Calgary Herald 080501)
Oilsands for energy 'bizarre': GM vp
Once described by Time magazine as "Canada's greatest buried treasure," Alberta's oilsands and the industry surrounding it should be reexamined because it is a "bizarre" source of energy, one of General Motors' top global executives says. Larry Burns, vp of research and development and strategic planning at GM, said if political leaders are going to re-evaluate whether it makes sense to encourage Canadian farmers to grow crops for biofuels such as ethanol, they should apply the same rigour in analyzing other energy sources. "I think you have to ask the same question, 'Does it make sense for Alberta to be creating an oilsands industry?' " Burns said in an interview at a downtown Toronto hotel yesterday. "I think it's a pretty bizarre way to get gasoline to a corner station. It's an awful lot of capital and an awful lot of work to pull it off." Burns, a 56-year-old engineer who is leading GM's efforts to develop an electric car called the Volt and several parallel projects for vehicles powered by sources other than petroleum, has visited Alberta's oilsands. He said he was struck by the sheer scale of operations there. Burns, in the Toronto area to address a conference of auto-supplier executives, said his industry has to wean itself off a near-complete dependence on gasoline. He said he agreed with the basic argument made last week by Jeff Rubin, CIBC's chief economist, that demand for gasoline from such emerging nations as China and India will put a strain on oil supplies in years ahead. Rubin stunned Canadians when he forecast that gasoline prices will soar to $2.25 a litre by 2012.
(National Post 080501)