INTRODUCTION

Canada now produces over 1 million barrels of oil each day from the oil sands. The Committee heard testimony that this rate of output could very well triple within the next ten years and even increase by five times by 2030. The pace of development of the oil sands is affected by a number of factors. As the National Energy Board reports:

“It is expected that there will continue to be rapid growth in the development of Canada’s oil sands. There are, however, issues and uncertainties associated with the development of the resource. The rate of development will depend on the balance that is reached between the opposing forces that affect the oil sands. High oil prices, international recognition, geopolitical concerns, global growth in oil demand, size of the resource base and proximity to the large U.S. market, and potentially other markets, encourage development. On the other hand, natural gas costs, the high light/heavy oil price differential, management of air emissions and water usage, insufficient labour, infrastructure and services are concerns that could potentially inhibit the development of the resource.”¹

The Committee is of the view that many of these factors warrant a closer inspection. Indeed, the rapid expansion of oil sands activities poses a number of important public policy challenges. While the development of Alberta’s oil sands undoubtedly provides an important economic stimulus to western Canada and to Canada as a whole, it also gives rise to important social, environmental and economic problems that have yet to be adequately addressed.

In particular, greenhouse gas emissions from oil sands activities are of increasing concern and have yet to be tackled head on. The Committee heard from a number of witnesses who argue that if Canada forges ahead with the development of the oil sands in a business as usual manner,²it may face major environmental problems. As one witness from the Pembina Institute put it, Canada risks becoming known “not as an energy superpower but as a superpolluter.”³

As this report will make clear, Alberta’s oil sands are an enormous economic and strategic advantage for this country. We have only begun to tap into this vast resource. As a global energy leader, Canada has a responsibility to find even better ways to maximize the value of this resource while minimizing the social and environmental costs of oil sands activities. How the development of Alberta’s oil sands is managed in the coming years will have important long-lasting repercussions on Canada’s economy, society, environment and international reputation, and will serve as a litmus test for Canada’s commitment to sustainable development.

The development and commercialization of new technologies will undoubtedly play an important role in helping the industry develop the oil sands in a more sustainable manner. Governments have a role to play, both through the deployment of policy signals and through strategic investments, in making sure that such technologies are developed, brought to market and widely adopted in a timely manner. The time to act is now. With so many new long-lived oil sands projects in the planning stages, it is critical that the right policy framework be put in place as soon as possible so that businesses can promptly make the necessary investments in innovative technologies that will reduce the environmental and social footprint of oil sands activities and help transform Canada into a true clean energy superpower.