Subcommittee on Canadian Industrial Sectors Committee on May 5th, 2009

[The Chair, Conservative, Dave Van Kesteren]

Gentlemen, that concludes our meeting.

You've been very helpful. I think all of us have a better understanding of the oil industry and what it means to Canadians. We thank you for the time you've spent with us. I think at this point we can conclude our meeting.

I want to say to the members that the clerk has been actively engaged in trying to get witnesses for Thursday. To this point we haven't had success, but we'll keep you tuned on that.

I have one question. At what point is oil profitable? We're trading at about $54 a barrel.

[David Daly]

It's at about $50 a barrel, give or take a few dollars.

[The Chair, Conservative, Dave Van Kesteren]

For the oil sands, at what point will we see investments start to flow back?

[David Daly]

Up until about a year ago, companies were talking about needing somewhere between $80 and $100 a barrel. That had a lot to do with the high cost of steel and other raw materials. Now steel prices and some other raw material prices have come down. I think projects are now looking at $60 to $75 a barrel in order to be viable to go forward. We're not far from that.

[The Chair, Conservative, Dave Van Kesteren]

Of course, that will start to shift again, because once the prices go up, commodity prices start up, but you're saying that at this point they earmark at about $70.

Go ahead, Mr. Herring.

[Don Herring]

Mr. Chairman, may I leave you with one statistic, as there has been a huge focus on greenhouse gases and becoming greener?

When we participated in panels across the country through the Kyoto hearing process, we left a number with many groups, not because it had anything to do with the environment, but because it makes good business sense in a high-cost environment. As we continue to invest in our equipment, what we're looking for is trying to provide a service that costs less. The way we've provided a service that costs less is by having smaller engines and fewer of them, and we have technology invested in drilling more efficiently.

The upshot is that we have a 50% reduction in greenhouse gases--the consumption of diesel fuel--per metre drilled.

[The Chair, Conservative, Dave Van Kesteren]

That's very good.

We thank you very much.

The meeting is adjourned.