Con­serve even cheap oil

Saskatoon StarPhoenix - - Local -

The fol­low­ing edi­to­rial is ex­cerpted from the Cal­gary Her­ald. Nat­u­ral Re­sources Canada has is­sued its en­ergy out­look for the four years to come, and fore­casts oil will drop to $45 a bar­rel by 2010.

A much more likely sce­nario is that pro­posed last week by Don Drum­mond, chief econ­o­mist with TD Bank Fi­nan­cial Group, that sug­gests oil will fall to $50 this au­tumn, rise to $55 next spring and re­turn to $60 in 2008, de­spite pre­dicted low growth in the U.S. The de­mand fun­da­men­tals are there.

But th­ese analy­ses leave lit­tle room for the un­fore­see­able. For ex­am­ple for­mer CIA di­rec­tor James Wolsey, speak­ing in Cal­gary three weeks ago, said the world would now be deal­ing with $200 oil, had Fe­bru­ary’s al-Qaida at­tack on Saudi Ara­bia’s mas­sive Abqaiq oil com­plex been suc­cess­ful.

Any­thing can hap­pen, and it doesn’t take a short­age to drive up prices, just the fear of one. Still, if the Nat­u­ral Re­sources pre­dic­tion is cor­rect — and some in­dus­try pun­dits still echo its con­tention — it’s bad news for any gov­ern­ment de­part­ment try­ing to pro­mote al­ter­na­tives to gaso­line as fuel for trans­porta­tion.

If con­ser­va­tion, fuel cells, biodiesel, ethanol or elec­tric­ity are to have any part in wean­ing North Amer­ica away from its chronic vul­ner­a­bil­ity on im­ported oil, oil has to be ex­pen­sive — very ex­pen­sive. In fact, it prob­a­bly needs to be more costly than we care to con­tem­plate. A brief flir­ta­tion with $78 sparked nei­ther great changes to peo­ple’s driv­ing habits nor a wide­spread switch to hy­brids.

Yet, the need to first con­tain, then re­duce oil use on this con­ti­nent is crit­i­cal for rea­sons of na­tional se­cu­rity. And, while the prin­ci­pal onus rests on the U.S., which im­ports roughly half of the 19 mil­lion bar­rels of oil it uses ev­ery day, Canada may as well get ef­fi­cient, too. For the fore­see­able fu­ture, there will be a highly prof­itable mar­ket for any prod­uct this coun­try pro­duces, but does not use.

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