Craig Stevens, (202) 586-4940
July 14, 2006
It has been tremendously valuable for all of us to get a first hand look at the oil recovery operations here in Alberta. They are truly remarkable—and the energy we expect them to deliver will strengthen both our nations in the years ahead.
Prime Minister Harper declared during his visit to Washington earlier this month that United States and Canada have the strongest relationship that has existed between any two independent nations at any time in history. From my perspective as U.S. Energy Secretary, I know how true that is. We get more oil, natural gas, uranium and electricity from Canada than from any other country. For the sake of shorthand, it’s easier just to say Canada is number one. We are interconnected in many ways but our cross-border ties in energy are particularly striking. Today, we are linked by 22 petroleum pipelines, 34 natural gas pipelines and 91 electric transmission lines. As the Oil Sands operations here reach their full potential, those numbers are sure to increase. In Washington, we sometimes talk a great deal about parts of the world where political conditions threaten our future access to energy supplies; we often don’t say enough about the value of our most secure, stable and reliable partner—Canada. So I am glad to be here today to tell you how much those of us in the lower 48 provinces value what Canada has done for us in the past and continues to do for us today. The work going on today at the Oil Sands has the potential to do great things—both for the energy security of the United States and the economic security of Canada. I am very pleased that I have had the honor to be the first U.S. Energy Secretary to see the scope of what has been achieved here first hand. It has taken nearly 40 years of tough, pioneering work but the hour of the Oil Sands has come. The challenge now is to manage this great resource in an economically efficient and environmentally sound way. And to manage it for the long-term . . . so it benefits Canada, the United States and the rest of the world, for decades to come. President Bush has set a goal for our nation to reduce its imports of oil from unstable parts of the world by 5 million barrels a day by 2025. No single thing can do more to help us reach that goal than realizing the potential of the Oil Sands of Alberta. In the long run, of course, both our nations must also speed the development of alternative energy technologies that will make our energy portfolios more diverse and less dependent on fossil fuels. But today we live in a world that is changing rapidly and the emergence of new oil consumers in China, India and other nations is a fact we must contend with. None of the experts can really tell us whether growth in worldwide demand will continue at its recent pace, but we must assume it will, and plan accordingly. Strong demand has driven the world price for oil up by 75% since the beginning of 2005. This is causing widespread pain for consumers in our country and they feel it every time they pull up to a gas pump. They don’t hesitate to share that pain with me, whenever they can. But if there is an upside to this difficult period, it may be that having the world price for oil at over $70 a barrel, or over $80 Canadian, has finally removed any doubts about whether extracting it from the sands of Alberta is economically sound. A total of more than $100 billion in planned private sector investments over the next fifteen years and more than 35 individual projects in the planning or construction phase is a powerful endorsement from the oil industry of the economic viability of this enterprise. Certainly, there are still big technical challenges to be overcome in how the oil is processed and distributed to the marketplace. But I know the solutions will be found. You only have to look at the tremendous strides that have already been made here over the last decade in bringing down the cost and greenhouse gas emissions involved in turning out each barrel of oil. You have come farther, faster than anyone expected. I know that the engineering talent and capital that is assembled here today will produce even bigger gains in the years ahead. For chemical engineers like me, this has to be one of the most exciting places in the world that one could work. In a few years, when I’ve completed my tour of duty in Washington, I might just wander back here myself . . . if Diane will let me. I know that there are some growing pains that come with the boom you have underway here. But I applaud the job that the federal and provincial governments have done here in setting environmental standards that have maintained your air quality and have laid the groundwork for future reductions in greenhouse gas emissions. The Weyburn carbon sequestration project that our nations have had underway since 2002 has proven that carbon sequestration works and can be part of the solution to the environmental challenges we face. Weyburn has already kept seven million tons of carbon dioxide from being released into the atmosphere—the equivalent of taking 6.8 million cars off the road for a year—and should eventually help avoid the discharge of some 30 million tons of CO2. There is much more that we can do together. Earlier this month, President Bush and Prime Minister Harper agreed in principle to give a new emphasis to energy and environmental issues that affect both our nations in the ongoing work being done by the Security and Prosperity Partnership of North America. That group has a panel of Oil Sands experts who have been hard at work outlining the areas where my government can work more closely with your federal government and with the provincial government of Alberta. Our overall goal should be to integrate the rapidly growing output from the Oil Sands into the refining and distribution system in the U.S. and Canada in ways that are fair to both producers and consumers. They have concluded that some of the areas that need attention include the adoption of new technologies so inputs of natural gas used to upgrade bitumen into synthetic crude can be replaced with byproducts or residuals of the process itself; expansion of refining capacity in the U.S. and Canada and the retooling of more refineries to handle synthetic crude from the Oil Sands and; the routing and construction of new pipelines to connect the Oil Sands to refineries in the U.S. and Canada, including those on our Gulf Coast.For my part as Energy Secretary, I stand ready to do all that I can to help turn these objectives into realities. And I commit here and now to give special attention to helping Canadian firms and government agencies navigate our federal governmental processes for pipeline approvals in the most expeditious way possible.
Our nations have had a great and unique relationship in the past but I believe our future will be even brighter as we stand together in meeting the energy needs of our two nations. Thank you for having me and I will look forward to seeing more of you in Washington.