NorthWest Upgrader project a key to diversifying Alberta's energy
EDMONTON, Nov. 21, 2011 /CNW/ - The recent delay in the Keystone
pipeline underlines the need for Canada to open up new markets beyond
the U.S. for its energy production, the Hon. Jim Prentice, P.C., Q.C., CIBC Senior Executive Vice-President and Vice Chairman, said today.
"The Keystone decision is troubling," Mr. Prentice told the Edmonton
Chamber of Commerce. "In my judgement, the decision is a mistake even
from the perspective of the United States, which has long had a policy
objective of diversified and dependable sources of oil supply. It is,
however, a mistake which is theirs to make.
"From our perspective, as a country that prided itself on being
dependable, the whole sad Keystone experience has had a transformative
effect on Canadian energy policy. Today, no one seriously advocates
that Canada should be dependent on a single continental buyer for its
Mr. Prentice pointed out that Canada exported $50 billion worth of crude
oil and $91 billion in energy as a whole last year. But he added that
both crude oil and natural gas are selling at a discount to
international prices because Canada essentially has only one export
This comes as the global market for energy continues to grow. The U.S.
Energy Agency has projected a 50 per cent rise in consumption of
marketed energy between now and 2035 - with greatest increases coming
from non-OECD economies.
"Canada will never get full value from its oil and gas resources until
we have expanded pipeline capacity to the west coast, until our markets
are broadened and our commercial influence expanded," he said. "Having
one customer just doesn't cut it anymore. Unless we diversify our
energy markets, we will remain a price-taker, and the dream of becoming
an energy superpower will remain just that - a dream."
While the Keystone delay reinforces the need to diversify markets, it
also reflects a need to diversify Alberta's energy infrastructure. Mr.
Prentice believes the $15 billion NorthWest Upgrader project is a critical step in the maturing of the province's oil sands industry.
"When all three construction phases are completed, the upgrader will
refine about 150,000 barrels of bitumen a day, adding significant value
to the product before it leaves the province. Half the output from the
upgrader will be ultra-low sulphur diesel fuel, helping to green up the
operations of customers in agriculture, transportation and other
industries. The upgrading process itself will be a world first - the
first to combine gasification technology with CCS technology to capture
1.2 million tonnes of CO2 per project phase, or the equivalent of taking 900,000 cars off the
"This megaproject adds economic value to one of our most important
resources and is a milestone on the road to becoming a clean energy
To be a clean energy superpower he believes Canada must develop the
necessary data to prove that it is a leader in addressing the
environmental challenges posed by the oil sands. "Neither industry nor
the governments of Canada or Alberta can defend themselves in the
absence of credible, science-based data that substantiates the fact
that we are protecting the environment," said Mr. Prentice."
He noted that historically this data has not been available, which is
why both governments and the industry itself are advocating more robust
monitoring systems for the oil sands. "This will allow the industry to
get out in front of its critics by setting tougher targets and
benchmarks with respect to impacts on water, air and land and by making
the investments to meet those targets and by having the data to prove
Mr. Prentice said that future investment in Canada's energy
infrastructure represents a tremendous opportunity to create jobs and
long-term wealth noting that a report released just days ago by CIBC's
Institutional Equity Research team concluded that Canada is in the
midst of an infrastructure "super-cycle". In the energy sector alone,
the report listed twenty-eight current and proposed projects in Canada,
with a total investment of close to $75 billion.
"The opportunity represented by planned energy projects is unprecedented
in the world today. When you tally up the capital investment in oil
sands and pipelines, power generation and electricity transmission and
distribution, the grand total is more than one million new jobs over 20
A copy of Mr. Prentice's full speech is available here.
PDF with caption: "PrenticeEdmontoneng.pdf". PDF available at: http://stream1.newswire.ca/media/2011/11/21/20111121_C7881_DOC_EN_7008.pdf
For further information:
Rob McLeod, CIBC, (416) 980-3714 or firstname.lastname@example.org; Kevin Dove at (416) 980-8835 or Kevin.email@example.com