Let me begin by welcoming all of you from away to Alberta. In the midst of your immersion in heavy topics like tectonic systems, depositional systems, mudrocks and continental margin settings, I hope you’ve taken some time to enjoy Calgary and our own unique brand of western hospitality.
It’s been 15 years since your Association had your conference in Alberta. Much has changed in those 15 years. And you definitely picked a great time to come back – for a whole host of reasons.
First of all, it’s Alberta’s centennial celebration. We’re celebrating 100 years as a full-fledged member of the tribe of fiercely proud Canadians that extends from our country’s coast to coast to coast.
For we who call Alberta home, celebrating our centennial is a great reminder of how wonderful this province is.
We’re blessed with a bounty of natural resources; our air, land and water make us the envy of the world. Rich resources in the ground – oil, gas, coal and oil sands – and rich resources we can harvest from the ground – our grains, livestock and forestry.
And our greatest bounty of all? Albertans. Our people. People rich in character. People who refuse to shy away from the tough stuff, and take “it can’t be done” as the ultimate challenge.
We’re mavericks and we’re proud of it. We’re sometimes described as a province that makes the rest of Canada nervous. Some folks are quick to brand us as crazy, cantankerous rebels determined to go our own way.
And they’re right. We routinely take on the impossible and make it work. And we do tend to make the rest of the country nervous – especially as Alberta’s economic performance exceeds the rest of Canada’s.
And that’s the second reason why this is a great time to pick Alberta for this conference. This is a time in our province’s history when the stars are aligning in all the right ways. And the future has a feeling of prosperity to it. Our opportunities are almost unlimited.
It wasn’t always this way – and we didn’t get to where we are today simply by good luck and good fortune. Yes, we’re resource rich. But over our history, those resources have been a mixed blessing – buoying our economy when prices are high, and sending shock waves when prices drop.
The bottom line? Albertans did a lot of hard work. We had that steely-spined, maverick determination going for us as we turned a once fiscally crippled province into a driving economic force in Canada and across North America.
Back in the 1990s I had the honor to serve as Alberta’s treasurer. Some say it was a dubious honor because I got the job at a very difficult time in Alberta’s financial history. We were in the glue. Successive deficits piled on top of each other to create a mountain of debt. And thanks to a series of bad investments – combined with our inability to reign in spending – we’d lost the confidence of Albertans.
All that changed starting in 1993. Albertans told us to fix the problem, and unlike other jurisdictions where the political reality would have said, “It can’t be done” ... well, we took up that challenge.
So we started on a disciplined road to fiscal and government reform. Introduced legislation to require balanced budgets. Refused to take the easy way out by increasing taxes. And launched a comprehensive program to reduce spending in every nook and cranny of the government’s budget. Everyone was touched. Even the public sector – from nurses to teachers to social workers and public servants – got on board and voluntarily agreed to roll-back their salaries.
Thanks to a convergence of hard work and tough actions we were able to achieve the goal of a balanced budget ahead of schedule. But the government didn’t stop there. Albertans said “Good start, but you’re not there yet. Keep on going. And set your sights on the next prize – a debt-free Alberta.”
That prize was won this year when Alberta officially wiped out its remaining debt. It’s a prize that only few jurisdictions around the world can claim. And it just adds one more dimension to a marvelous convergence of advantages that position us for the future.
This history lesson is important to remember because it underscores what makes Alberta unique. It reminds us that there is hard word and sacrifice involved whenever you’re pursuing a bold dream. And it reminds us of what Alberta can do – if we set our minds to it.
Today we’re in the enviable position where we can choose to do or become pretty much anything we want. But that means we need to make choices on purpose – Alberta on purpose, not by accident.
Alberta can choose to be the 21st century leader for Canada and the world. Alberta can choose to become known as the leading center of innovation and active incubation in North America. And anything less is simply selling ourselves short.
And the reason all of you are here this week – to explore energy solutions? And studying the latest ideas for unlocking energy development? That’s one of our strengths. It’s where we have the potential to lead the world.
Because Alberta is that sweet spot where geography meets geology and they come together to create opportunity like nowhere else in the world. Alberta has a vast wealth of carbon assets – conventional oil, natural gas, heavy oil, synthetic crude oil, bitumen, coal, coal bed methane – and a petrochemical feedstock in every one of those. Ladies and gentlemen, that’s the most powerful combination of assets anywhere on the globe today.
And if we choose to do it right … If we stay focused on developing those assets the right way, focused on adding value here in Alberta along every link in that chain … If we focus on wasting nothing in that value chain … If we refuse to be constrained by the status quo in this energy industry and its future … well ladies and gentlemen, Alberta and with it Canada can become an energy powerhouse. And I’ll go one better. We can become the world’s clean energy powerhouse.
Canada is a big consumer of energy, especially natural gas and electricity. And you American neighbors have a hefty appetite for energy and a growing concern for energy security. Who better to fill that gap than your friendly neighbor to the north?
On the other hand, you all know that we’re consuming our natural gas asset at an accelerated rate, especially in the oil sands. As a source for electricity, steam and hydrogen, natural gas is expensive and its price is volatile. In fact, injecting natural gas into the oil sands to produce oil is like turning gold into lead.
So as the past chairman of the Canadian Clean Power Coalition, I’ve been an advocate for supporting industry’s efforts to find ways to reduce their dependence on natural gas – to get better economic value from it, and to find an alternative fuel for power and steam generation and hydrogen production.
And the answer is coal and coke and bitumen, all of which are plentiful throughout Alberta.
Combine coke, bitumen or coal with steam and oxygen in a pressure cooker and the synthesis gas you get from it becomes a reliable fuel source for electricity and steam generation. It becomes a reliable source of hydrogen that is so essential to refining and upgrading processes. And the more of that we can do in Alberta, the more we can add value here, then the more jobs we have here.
Canada and the rest of the world, especially you neighbors and friends to the south, are just starting to wake up to the concentration of possibilities in Alberta. And that’s especially so in the oil sands.
You’ve heard some of these facts this week:
- Conservative estimates put the number of barrels of reserves in northeast Alberta’s oil sands at 178 billion. And with improved extraction technology, the estimate goes up to 300 billion barrels, which would make Alberta the richest petroleum field in the world.
- In 2004, the oil sands were producing a million barrels of oil a day, and in the next 10 years that number will triple.
- Projects like Nexen’s and OPTI Canada’s Long Lake 70,000 bpd project that will gasify its bitumen, thereby eliminating any natural gas requirements. On top of that the project is designed to be virtually self-sufficient due to water recycling and onsite power generation.
- Petrobank’s Whitesands project at Conklin will rely entirely on coke to fuel its bitumen extraction – and upgrading process and eliminate the need for natural gas and water.
- Just last month, Suncor announced its plans to build a gasifier to turn coke into syngas to reduce its reliance on natural gas for energy.
These are fantastic developments. And what makes them even more significant is that, as Syd Dykstra from OPTI Canada puts it, these aren’t radical solutions. It’s simply taking what we already know, taking existing technologies, and putting them together in a new way. And you know, that’s a sure sign that the sky really is the limit when you unleash that powerful combination of ideas, imagination, and leading edge research to produce solutions that many would never have thought were possible.
But here’s the thing. We’ve only just begun to tap the potential of what could be done right here in Alberta. Alberta should be the leading center of innovation and active incubation in clean energy development in North America.
If we’re going to get maximum value out of all the valuable carbon we have in Canada, we have to think in terms of a fully integrated energy system.
Just think again for a moment of the abundance of resource assets we have here. Look at the oil sands in concert with heavy oil, with our hydro and thermal and renewable power and steam generation, with our low cost, clean coal reserves and the potential they hold for coal bed methane development, our refinery operations, our petrochemical operations, our conventional oil and natural gas assets … especially how many of those assets remain locked in the ground because technology hasn’t yet caught up. Think of what we might be able to do to solve the gas over bitumen issue in the northeast. Think of all those assets plus others you know and that I haven’t named.
Now add in our precious water assets; we can’t afford to think about protecting or enhancing these valuable resources outside of this discussion.
All of those assets are linked, and the more we think of them as integrated – the more value we can add at each link or connection in the integrated process – then the more products we can envision from these assets here in Alberta.
Think of the network of pipelines, transmission wires and other infrastructure we’ll need, especially with four million barrels of SCO being produced every day. What a wonderful opportunity to develop that transportation infrastructure. It’s not a problem; it’s an opportunity. Enbridge. TCPL. Terasen. AltaLink. That’s their business.
Naturally we’ll pipe our way into the US – but imagine if we could build finished products pipelines from here into the US and over to Prince Rupert for shipment to Asia. PetroChina and Enbridge have recently signed a deal to build a new oil pipeline between Edmonton and Canada’s west coast. And when it’s up and running, it will ship up to 200,000 barrels day to China. What a fabulous outlet for our products – especially for our finished products – putting more and more of those in to a new and more diversified market that’s only going to grow dramatically in the coming years.
If we do it right, with the right technology, think of the emissions that could be captured and used in the production of the next product in the value chain.
Think of the opportunity for innovation and cost reduction. The mind boggles at the endless search to do all of this smarter, faster and cheaper – and to keep looking for new and more innovative ways to add and extract value. That’s where our universities and other research facilities come in. They should have a field day with these opportunities.
And on top of that, think of the opportunities for training and skills development – that’s an essential ingredient here, because this is an industry about tomorrow. It’s not just our past. This is our future. Imagine what SAIT and NAIT and our four universities and various colleges can do as they’re thrown this challenge.
And finally, think of the jobs – the quality jobs – the lasting job impact from the development of this energy complex.
Ladies and gentlemen, the future is an energy industry that is:
- Maximum value adding.
- Job creating.
- Innovation driven.
- Emission eliminating.
- Fully integrated.
(It’s) a model unlike anywhere else.
So what will it take to get there?
It’s going to take the right players coming together with a commitment to make this happen. No one industry player can do this on their own. It’s just too expensive in the short term. But a group of industry players combined with strong government leadership can move this from the idea stage to actual projects in the marketplace.
It’s going to take some policy changes from governments’ perspective – both in Edmonton and in Ottawa – to strengthen the economic case. And that means changes in the royalty and regulatory and tax regimes so there are greater incentives to build the pipeline and distribution system we need.
It’s going to take a ready supply of highly skilled and well-trained people at all levels in the system. One of the biggest challenges Alberta faces is finding the skilled and educated talent to get the job done. It’s a major “pinch point,” and we need to find ways within Alberta and across North America to “unpinch” those pinch points and ensure a steady supply of skilled people to do the job.
Most of all, it takes vision and a belief that anything is possible when we set our minds to it. Bob Dunbar from the Canadian Energy Research Institute looks at the opportunities and calls himself a “raving lunatic optimist.” I’d only disagree with Bob on one point: he’s no lunatic. All this is possible.
We can shatter those Dickens-like images and replace them with a Star Wars future for our carbon. We can add value at every link in the value chain.
I have a favorite quote from George Bernard Shaw. He said, “Reasonable men adapt themselves to their environment. Unreasonable men strive to adapt their environment to themselves. Therefore, all progress comes from the efforts of unreasonable men.” And women, as is the case today in Alberta.
If we want to become the world’s energy powerhouse we need to be bold. We need to aim higher and not shy away from big, unreasonable dreams. As an old friend of mine likes to say, “This is Alberta. The difficult we do now. The impossible will just take a little longer.”
Thank you again for the opportunity to be with you today.