Thank you, Mr. Mills. It is indeed an honour to appear before this committee today, and I hope I can say something of worth to you.
I should point out that I'm a trained historian. I earned my PhD in history from Ohio University. I am currently the director of the University of Calgary's international relations program.
My research interests have focused primarily on international diplomacy and business. In 2002 I completed my doctoral dissertation on this very subject. The title of my dissertation was “Developing Alberta's Oil Sands”, and that has since been turned into a full-length book project, published in 2004.
My book, Developing Alberta's Oil Sands: From Karl Clark to Kyoto, deals with the evolution of the oil sands industry. The oil sands industry began in the 1910s. We have arrived at a point 90 years later where we have a multi-billion-dollar industry. When it began, it was producing only road-top asphalt. That is a rather remarkable transformation. We now have an industry capable of producing 1.1 million, 1.2 million barrels of oil per day. By 2020 this will increase to approximately 3 million barrels per day.
There are a few themes that I developed in the writing of my book. I'll touch on these and give you some suggestions. The first is the capital-intensive nature of oil sands development. With the oil sands, we're dealing with an industry, from its origins and arguably to the present day, that resembles mining industries more than conventional oil industries.
One of the things I found in my research is that the oil sands began the 20th century as a fringe source of petroleum on the margins of the international oil industry. This is how the source was regarded by multinational oil corporations. Yet we saw a series of decisions taken by both the federal and provincial governments that now enables us to benefit from this resource. That is the second theme my book touches on—this public-private leadership. We saw it in the federal government in Sidney Ells, who researched the oil sands in the 1910s. This was carried forward by Karl Clark and the Alberta Research Council in the 1920s. It has been developing since the beginning of the first oil sands plants—from Great Canadian Oil Sands starting commercial production in 1967 to the operations of Syncrude today.
My research shows the importance of this public-private partnership in developing these resources. There has been a strong role for both the private sector and the government. Government did not play a passive role; it made enormous contributions. There is the work of Sidney Ells and the mines branch, the work of the Alberta Research Council in determining the physical properties of the oil sands deposits, research on separation methods, and the establishment of taxation royalty and regulatory frameworks that guide the industry's development today.
It was interesting for me in the last hour to hear the presentation of the members of Natural Resources Canada. I would like to point out exactly how we're dealing with an evolutionary change.
The process of hot water separation that you heard mentioned in the last hour involves taking the oil sands and adding water and heat. With the composition of the oil sands--clay, water, sand, and bitumen--once you add water and heat you get a separation of the oil sands. The bitumen sticks to the clay, floats to the surface, and can be skimmed off.
The process of perfecting this technology took 28 years. It took Karl Clark and the Alberta Research Council from 1920 until 1948 to demonstrate its commercial viability. So when we're talking about the oil sands, I think it's important to recognize that we have dealt for the most part with this industry's history of an evolutionary change. We have truly seen a revolutionary change with the development of in situ methods since the 1970s.
I'll wrap up these brief comments by saying that my research is now focusing on the globalization of the oil industry, and I would be pleased to answer any questions you may have that I hope I can answer on the development of the oil sands.