Thanks, Mr. Chair. I am pleased to be here filling in a little bit. I have a little bit of experience in this area, coming from north of the oil sands and having worked in this area before.
The question and the statement, Mr. Rubin, about the market being the determination of this whole issue with heavy oil, with bitumen, is interesting. In the 1990s most of the upgrading was done through hydrogen addition, cheap natural gas, and that was what drove the market. You would see in 2000 moving forward the big coking machines moving up the McMurray highway because the price of natural gas went through the roof.
Now we have a situation where natural gas is back down again. Coking is a process by which you destroy a certain percentage of the oil that you're dealing with. Basically bitumen has between 76% and 78% of the hydrogen required to make it into synthetic oil. It's actually getting worse because as we go deeper into the deposits of heavy oil—and this was revealed by a university professor from Calgary about three months ago in a presentation here—the oil gets heavier, with less hydrogen content.
On the issue about strategic investment in a product that is declining in value and becoming more difficult to deal with, you might show this up in the cost differentials between some of the other heavy oils that are available across the world where the hydrogen content is greater and less coking is required.
When we think of our bitumen supply and we think of where we have to take it when it's raw bitumen, we think that we need to take it to an upgrader. If we provide the upgrading, then synthetic oil can be taken anywhere in the world. It's a product that fits in to any refinery. It's good to go. So strategically for Canada not to be engaged in the upgrading industry means that our product which, declining in value, will always be an inferior product to other heavy oils, and certainly to all shale oil and all conventional oils, how are we going to maintain this oil in the markets? Is it always going to be a loss leader for us? Are we going to be continually downgraded in our ability to sell the oil and to produce it in a good fashion?