The Canada-US Energy RelationshipJul 20, 2011  · Oil Sands and Water Mined Oil Sands Up to 75% of the water is recycled Amounts to less than 1% of average flow of Athabasca River

The Canada-US Energy Relationship

Prosperity, Security, Sustainability

Serge P. Dupont

Deputy Minister, Natural Resources Canada

Legislative Energy Horizon Institute

Portland, Oregon

July 20, 2011

2

Canada-US: A Unique Relationship

“The United States and Canada are not simply allies, not simply neighbors; we are woven together like perhaps no other two countries in the world.” - US President Barack Obama, February 4, 2011

“Over the past nearly 200 years, our two countries have progressively developed the closest, warmest, most integrated and most successful relationship in the world. We are partners, neighbours, allies and, most of all, we are true friends.” -Prime Minister Stephen Harper, February 4, 2011

3

Canada-US: World’s Largest, Deepest Economic Partnership

$1.6 billion in two-way trade every day

Integrated supply chains

Canada largest market for US – and for 34 of 50 states

More than 8 million US jobs dependent on trade with

Canada

Canadian FDI in US: $250 billion

US FDI in Canada: $300 billion

4

Canada in Solid Position to Grow Opportunities

Open trade and investment

environment

Strongest fiscal position in G7

Soundest banking sector in

the world

Strong corporate and

household balance sheets

Low corporate taxes

Tax Rate on New Business

Investment, 2012

42.3

34.7

30.928.0 28.0

26.5

16.8

0

5

10

15

20

25

30

35

40

45

Japa

nU.K

.

U.S

.

Franc

eIta

ly

Ger

man

y

Can

ada

%

5

Shared Commitment to Expand the Relationship

Shared Vision for Perimeter

Security and Economic

Competitiveness

US-Canada Regulatory

Cooperation Council (RCC)

6

Canada: A Global Energy Superpower

Sixth largest producer of oil (~3 million barrels

per day)

Third largest producer of natural gas and third

largest exporter

Third largest producer of hydro power

Second largest producer of uranium

Own nuclear power technology (CANDU)

75 per cent of power generation non

emitting

Vast renewable and clean technology

potential

7

Canada: Largest Supplier of Energy to the US

19MMWh

44MMWh

0.7

TcF

3.3

TcF

701

MMb

Electricity Crude Oil Natural Gas Uranium

1% 13% 14% 22% % US Market

$2.1 B $53.6 B $16.5 B $714M US$ Exports

Canadian exports satisfied 9% of total US demand (2010)

2600

tU

8

Canada-US Clean Energy Dialogue

Launched by Prime Minister Harper and

President Obama in 2009

Collaboration in three areas

Carbon Capture and Storage

Clean Electricity and Smart Grid

Clean Energy R&D

Global Context: Growing Energy and Oil Demand

Source: World Energy Outlook 2010, New Policies Scenario

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

1980 2008 2020 2035

Millio

n t

on

nes o

f o

il e

qu

ivale

nt

Coal Oil Gas Nuclear Hydro Biomass and waste Other rewables

IEA projects energy

demand to grow by 36%

between now and 2035

Almost all oil demand

growth concentrated in

emerging economies –

57% from China alone

The transition to a lower

carbon economy will take

time

Oil demand projected to

peak no earlier than

2035

World Energy Outlook

10

Canada: Third-largest oil reserves

•OPEC member Source: EIA, 2009 data

11

Canada’s Energy Sector: Open Investment Environment

80% of the world’s known oil

reserves are state controlled or

managed by national oil companies

~20% is openly accessible to

market based development

Canada’s oil sands represent ~60%

of the world’s oil that is open to

market participants

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Oil sands: A Strategic Resource

Steam Assisted Gravity Drainage

Mining:

20% of

resource

55% of current

production

In Situ:

80% of resource

45% of current production

Extracted in two ways

13

Oil Sands and US Jobs (Forecast of 343,000 New American Jobs from 2011 to 2015)

7,300

4,700

43,200

Alaska = 900

Hawaii = 1,400

3,200

1,200

1,900

6,500 2,000

3,1006,000

800

800

1,000

2,300

3,200

6,800

3,900

2,900

27,3004,800

4,000 3,200

7,200

14,600

10,600

7,600

20,300

10,5005,200

4,700

4,800

7,000

8,400

10,300

13,200

13,800

1,700

1,6007,700

4,0009,300

19,400

800

1,700

1,000

1,200

1,000

Source: Canadian Energy Research

Institute, 2009

14

Oil Sands: GHG emissions

15

Oil sands: GHG emissions

Source: HIS Cambridge Energy Research Associates (CERA), 2010

Life-cycle GHG emissions for various sources of crude oil

16

Oil Sands and Land

100% of disturbed land must be reclaimed

Oil sand mineable area 1/10th of 1% of Canada’s boreal forest

Area deforested since 1967 about area of Chicago

Most future development will be drilled, not mined

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Oil Sands and Water

Mined Oil Sands Up to 75% of the water is recycled Amounts to less than 1% of average flow of Athabasca River Regulated withdrawal limits from the river 3-4 barrels of water used per barrel of oil sands crude

Tailings Ponds Producers not permitted to return production water to the river Regulations and technology reducing the amount of tailings and

surface of tailings ponds

Drilled Oil Sands (in situ) Up to 90% of the water is recycled New projects are increasingly using brackish water 1 barrel of water used per barrel of oil sands crude No tailings ponds

18

Oil Sands – Commitment to Sustainability and Environmental Responsibility

Stringent environmental reviews and regulation

Climate change goals (Copenhagen) aligned with US

Environmental monitoring founded on best science

Public and private investment in technology

19

Keystone XL: Contribution to Energy Security, Prosperity, Sustainability

Investment: $7 billion

Employment in the US:

120,000 person-years

Energy Supply:

500,000+ barrels/day

Equivalent to June 2011 release

from US strategic reserve,

once every sixty days

Pipelines safest mode of

transportation of petroleum

products

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A unique relationship

Shared commitment and opportunity

Prosperity, security, sustainability

Conclusion

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Government of Canadacanada.gc.ca

Natural Resources Canadanrcan-rncan.gc.ca