Skip to content

Oilsands debate not on most Americans’ radar

CALGARY — The debate over whether the United States should buy so-called “dirty oil” from Canada is not registering on the average American’s radar screen, the U.S. ambassador to Canada said Wednesday.

CALGARY — The debate over whether the United States should buy so-called “dirty oil” from Canada is not registering on the average American’s radar screen, the U.S. ambassador to Canada said Wednesday.

“Most people don’t really know a whole lot about it. That is both probably good and bad from the perspective of folks here in oilsands country,” David Jacobson told a Calgary business audience.

“It’s good in the sense that you’re writing on more of a clean slate; bad because you’re message hasn’t gotten out. On the other hand, the other message hasn’t gotten out.”

U.S. environmental groups have heaped criticism on oilsands producers over the impact their developments have on nearby water sources, wildlife and greenhouse emissions.

Some U.S. legislators have waded into the debate over whether so-called “dirty oil” should be shipped south through major pipeline expansions. Leaks on two Enbridge Inc. (TSX:ENB) pipelines this summer served to underscore those concerns.

While most Americans may not have an opinion one way or the other about the oilsands, the broader issue of climate change certainly resonates, Jacobson said.

“It has changed quite a bit over the last several years,” he said.

Jacobson said he has visited oilsands sites near Fort McMurray, Alta., and acknowledges the progress producers have made in reducing their environmental footprint.

However, he said more needs to be done.

“Industry leaders have to do everything they can — more than just what governments mandate — to reduce the environmental impact and the carbon footprint of the oilsands,” Jacobson said.

“The bottom line is that industry needs to clearly demonstrate how they’re meeting the challenges of providing energy security, while meeting their obligations as stewards of our environment.”

As the home of the world’s second-largest petroleum reserves, Canada will continue to be a key supplier of energy to the United States for years to come, Jacobson said.

Of the world’s 12 biggest petroleum producers, 11 do not exactly have a warm and fuzzy relationship with the United States, he said.

“Let’s just say none of them have friended the United States on our Facebook page,” Jacobson said.

“We have a choice in the United States: Do we want to buy oil from friends like Canada, or do we want to buy oil from those guys who haven’t friended us on Facebook yet?”

Earlier in the day, the CEO of one oilsands developer said the industry has not done a good enough job telling its side of the story.

“I think we’ve done a particularly disastrous job of informing people exactly what it is we do and what we’re doing to improve it,” Chris Slubicki, with Opti Canada Inc. (TSX:OPC), told a conference hosted by oilpatch investment dealer Peters & Co.

“You tell somebody you’re CEO of an oilsands company and they let go on you. They lose it. My reaction is not (that) they are naive. My reaction is we have done a phenomenally poor job.”

Many of the attacks don’t differentiate between steam-driven in situ projects — like the one Opti is developing alongside Nexen Inc. (TSX:NXY) at Long Lake, Alta., — and large open-pit mines.

Several of Canada’s oilsands producers are participating in an ad campaign launched by the Canadian Association of Petroleum Producers, the main voice of the industry. Some, like Cenovus Energy Inc. (TSX:CVE), are doing their own independent campaigns, too.

One issue the oilsands industry is not as concerned about is the possibility of construction and labour costs spiralling out of control like they did three or four years ago.

“We do not see the same kind of Gong Show that the industry went through back in 2006, 2007,” Cenovus CEO Brian Ferguson told the conference.

“We’ve had some contractors ask for increases. We’ve pushed back on that, and they’ve accepted that.”

Cenovus is expecting inflation of between zero and five per cent, Ferguson said.

There are select areas where inflation is more of a concern, like the Bakken oil play in southeastern Saskatchewan. But overall, weak natural gas prices mean lower costs for energy-hungry oilsands projects.