U.S. eyes Alberta oilsands to help cut dependence on unstable Middle East

By Sheldon Alberts
Vancouver Sun
04-Feb-2006

WASHINGTON -- The U.S. Department of Energy is predicting crude oil from Alberta's oilsands -- not alternative energy sources such as biomass ethanol -- will help halve America's dependence on overseas oil within two decades.

The assessment, in a report to be released later this month, follows President George W. Bush's challenge this week for the U.S. to sharply reduce its oil imports from unstable nations in the Middle East.

According to data obtained by the Reuters news agency, the U.S. Energy Information Administration estimates America's oil imports from Canada will almost double by 2025, from 1.6 million barrels a day to 2.7 million barrels a day.

The vast majority of that increased production will come from Alberta's oilsands, which are expected to produce as much as three million barrels a day by 2020.

"If (the United States) receives it all, which we don't have in our forecast, it could reduce even more our dependence on the Middle East," an energy department official told Reuters.

The U.S. predicts the surge in Canadian oil will be a major factor in slashing imports of Middle East oil from the current six million barrels a day to three million.

The news comes just days after Bush, in his annual State of the Union address, declared: "America is addicted to oil."

Bush said the U.S. must move "beyond a petroleum-based economy" and set a target of reducing 75 per cent of oil imports from the Middle East by 2025.

His prescription for reducing oil consumption ranged from sharply increased use of bio-based fuel, solar energy, cleaner coal plants and nuclear power.

But with many alternative fuels still years away from commercial viability, the White House and other U.S. lawmakers have also been increasingly eyeing Canada's oil supplies as they search for more secure and stable energy sources.

In October, Utah Senator Orrin Hatch said Canada was poised to surpass Saudi Arabia as "the world's oil giant" in the 21st century.

Alberta's oilsands hold an estimated 175 billion barrels of recoverable oil, second only to Saudi Arabia in terms of overall reserves.

The level of awareness about Canadian oil supplies in the U.S. has jumped markedly within the last year, in part due to advocacy by officials at the Canadian embassy. The opening of the Alberta government's Washington office has also had a major impact.