Natural Resources committee  No.

Natural Resources committee  Yes, I can.

Natural Resources committee  Are you talking oil?

Natural Resources committee  CERI published a report in the springtime as it related to what we call the Pacific access, where we are looking at the Trans Mountain and Northern Gateway pipelines. Within that report we drew out of that the economic spinoff effects of the existing operations, both conventional and oil sands.

Natural Resources committee  I'd have to say no. I'm not sure I absolutely understand your question. On the long-term forecasts, even on price, that we come out with, it's a process of putting a whole bunch of information into a computer model and coming out with that forecast. The answer coming out is only as good as the information going in.

Natural Resources committee  There are several ways of doing price forecasting. Some people absolutely look at the long-run price of gas and then do an extrapolation of that. There are other people who use, basically, just a rule of thumb: gas is going to go up at 2%, following GDP. The method we use is a very involved method of the interaction between the supply costs of the upstream supply, transportation tolls, and the change in those tolls based on flow volume, and of more importance is the demand side of the spectrum.

Natural Resources committee  Very simply, we are not currently looking, nor do we have anything on our agenda, at the economics of actual upgrading to refined products or anything like that. We have a project under way right now that is looking at what we call North America in 2022. We are taking the reserve base as far as oil is concerned and extrapolating it and trying to come up with a supply projection of how big the United States could get as far as domestic production is concerned, and by implication what that means for Canadian oil sands and Canadian conventional oil.

Natural Resources committee  Thank you, and good afternoon, everyone. My name is Peter Howard, and I am the president and CEO of the Canadian Energy Research Institute. Founded in 1975, the Canadian Energy Research Institute, commonly referred to as CERI, is an independent, not-for-profit research institute specializing in the analysis of energy economics and related environmental issues in the energy production, transportation, and consumption sectors.

Natural Resources committee  In 2006 the share of natural gas probably would be something around three-quarters of that number. Let me just throw out one comment. In the old days when one talked about reserves, reserves were very important because they back-stopped contracts. In today's oil and gas industry, it's not reserves that are the critical issue, it's the number of holes in the ground or the number of wells that you can complete.

Natural Resources committee  What I can do is perhaps give you some current numbers. If you look at the entire oil and gas industry in Canada--this is everything from the producers through to the service through to the pipeliners--that contribution is in the order of $165 billion, or 12.1% of Canada's GDP, and that was in 2006.

Natural Resources committee  The original research that went into the oil sands was to develop the production of bitumen. The secondary development, which came about as a result of declining conventional oil, was the upgrading of bitumen to synthetic crude oil to promote the transportation of that product.

Natural Resources committee  I think what you may be looking at is some of the facts of life, I suppose you could say. The biggest problem with upgrading and refining in Alberta is that the refining business in North America has very thin margins. It's difficult to get corporate interests to step forward and actually construct these types of capital-intensive facilities.

Natural Resources committee  If you were to look at today's current differential between WTI pricing and Edmonton pricing as far as bitumen is concerned, the suggestion would be that upgrading does not make a lot of sense, primarily because there isn't enough value in that basis differential to support it.

Natural Resources committee  My apologies. I was trying to--

Natural Resources committee  Numerous other words and jobs describe the manufacturing and fabrication industries that develop products used by the oil and gas sector in the construction of thousands of field facilities that dot the western Canada landscape. At the end of the economic life for a field facility, the final word is “abandonment”.