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Last updated on April 19, 2014 at 9:20 EDT

Canada’s oil sands boost U.S. energy security-Snow

July 8, 2005

By Mark Felsenthal

CALGARY, Alberta (Reuters) – U.S. Treasury Secretary John
Snow said on Friday that crude oil production from Alberta’s
oil sands substantially improves energy security for the United
States and Canada.

“To have our closest ally, Canada, with these resources
available, with a natural market in the United States — it’s a
huge contributor to energy security for North America,” Snow
said after touring an oil sands facility and mine near Fort
McMurray with Canadian Finance Minister Ralph Goodale.

Snow and Goodale’s visit to the northern Alberta oil sands
– which rival Saudi Arabia’s conventional reserves in size but
are far more expensive and complicated to develop — comes amid
heightened concern among industrialized nations about rising
energy costs and growing demand.

World oil prices hit a record of $62.10 on Thursday.
Leaders of the Group of Eight industrialized nations, at a
meeting in Scotland, called for more investment in refining and
access for foreign investors to oil-rich countries.

Snow told reporters he was surprised at the size of the oil
sands’ reserves.

“This is just a phenomenal natural resource asset and the
United States and Canada are terrific allies,” he said.

Crude oil derived from the oil sands now makes up more than
40 percent of Canadian oil production. Canada is one of the top
oil suppliers to the United States, along with Saudi Arabia,
Venezuela and Mexico.

Canada now produces about 2.5 million barrels for oil a day
in total, including conventional production, and the industry
expects that to increase to 3.6 million by 2015, mostly because
of the oil sands.

In 2004, oil sands output totaled 1.2 million barrels a
day, and the industry forecasts that will rise to 2.8 million
by 2015.

Oil sands projects worth more than $30 billion are now
either under development or on the drawing board.

The three major mining projects currently in operation are
run by Syncrude Canada Ltd., Suncor Energy Inc., and Shell
Canada Ltd. .

Snow’s visit to the oil sands takes place as the U.S.
government reviews an $18.5 billion bid by China’s state-owned
oil company CNOOC Ltd. for U.S. oil group Unocal . U.S.
lawmakers have expressed concern that the deal may pose risks
to national security.

Chinese energy officials have also shown a keen interest in
Canada’s oil sands in recent years, meeting with federal and
provincial government officials and energy executives, as well
as touring many of the projects. China imports 40 percent of
its oil needs as its economy booms.

Among other Chinese investments in oils sands projects,
CNOOC said in April it will invest $122 million in a
little-known company called MEG Energy Corp. to gain a 17
percent interest and learn more about the business.

(Additional reporting by Jeffrey Jones)