EDMONTON — Alberta’s energy minister says natural disasters in Japan and political unrest in the Middle East underline the importance of the oilsands as a secure supply of energy.
“What it has done is made a greater awareness of the need to develop the oilsands and develop it responsibly,” Ron Liepert told reporters at the World Heavy Oil Conference in Edmonton on Tuesday.
Civil unrest in Libya has dramatically reduced that country’s oil exports to the rest of the world, while an earthquake and tsunami in Japan damaged nuclear reactors.
Liepert said that should send a message that the steady flow of energy can’t be taken for granted.
“I would suggest that some of the Middle East turmoil has got a lot of people thinking about where their oil supply comes from and whether that gasoline pump is going to be working the next time they pull up to it,” he said.
“It think what it’s done is it’s made the general public more aware of the fragility around security of supply. That’s good for us in North America.”
Liepert’s assessment was echoed by Lawrence Eagles, head of oil research for global investment bank J.P. Morgan. Eagles said heavy oil’s already-strong future will only solidify given recent world events.
“(Japan) obviously has power generation needs that need to be fulfilled. Japan has a lot of spare capacity within the power sector which can use a mixture of fuels. (Liquefied natural gas) and oil will be part of that mix,” he said.
“There’s clearly been some policy adjustments already.”
Jean-Michel Gires, head of Total E&P Canada , which has a number of megaprojects underway in Alberta’s oilsands, said short-term volatility in energy markets may benefit heavy oil projects. It won’t, however, affect his company’s business plans.
“It looks like we are in a volatile world, where the news of every week keeps changing from the Middle East to Japan,” he said.
“We have to live with that type of volatility, but we think for the long term the fundamentals are there. Demand is due to grow and heavy oil will get an opportunity to increase its market share.”
Eagles told delegates from about 30 countries that heavy oil — which includes thicker, more viscous crude as well as unconventional oils such as synthetic crude from the oilsands — will have an increasingly important role in global energy markets for decades to come.
“I think there’s a need for all oil from all sources.”
Liepert also said Canada needs to develop a national energy framework and promised progress on that front at an energy ministers meeting this summer.