Canada is occupying a new spotlight on the world hydrocarbon stage, especially as its heavy oil reserves under development become more important to the world's energy supply. Investment dollars are surging into Canada. At a recent forum on Canadian energy matters sponsored by the Center for Energy Economics, a unit of the University of Texas at Austin, Roland Priddle explained why national oil companies such as those of China, E&P companies such as Chevron, and other investors are showing so much interest in Canada today. Priddle, former chair for many years of Canada's National Energy Board (NEB), cited the relatively under-drilled Western Canadian Sedimentary Basin, where huge gas discoveries are still being made, the budding oil and gas industry offshore the East Coast, and coalbed-methane potential. "The Canadian gas story is about more than the hundreds of shallow gas wells drilled in 48 hours in southeast Alberta and Saskatchewan. Talisman Energy has been bringing in huge gas wells along the British Columbia border. There is a fever pitch of drilling now. This year, Canadians may drill 15,000 to 16,000 gas wells." He also paid attention to the heavy-oil sands of Alberta, where some 175 billion barrels of recoverable oil reserves lie, second only to the proved reserves of Saudi Arabia, yet conveniently located right next to the world's most voracious consumer of oil. "Where else can you buy in-place oil-well, bitumen-for 1 cent per barrel?" Priddle asked, citing Chevron's March acquisition of interests in 7.5 billion barrels in place for $70 million, in the oil-sands region. In addition to these macro factors, Priddle cited another reason. Only half jokingly, he said he wanted to "thank those who have done so much...to make Canada the global energy hotspot that it now is. I'm thinking of Venezuelan President Hugo Chavez...." He also cited Russian President Vladimir Putin and new Bolivian President Evo Morales-who, by their actions and rhetoric recently, have made the oil and gas industry in their countries look riskier, thereby casting Canada in an even more attractive light. Canada is attractive now 60% because of its huge resource, 20% because of the push to return to North America and 20% due to the pull of government and economic stability, he added. Still, he cautioned against regulatory barriers. "I have developed what I call the Priddle Principle: the durability of energy policy is inversely proportional to the length of the text and quality of the paper it is printed on. Regulators tend to put on their political hats when they set about to approve projects. This is not good." Priddle was frank about the negatives in the Canadian outlook. Gas exploration offshore the East Coast had been mostly disappointing and no large new pools of oil have been found there in several years, he said. He decried the slow process of getting a pipeline from the Mackenzie Delta built, an option that has been discussed off and on for more than 40 years. "The Western Basin looks extremely strong, the East Coast has been rescued-for now-by high commodity prices, the West Coast continues its 30-year-plus limbo, and the Far North [Mackenzie Delta] has not been handled well by anyone."
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