What does that mean? What might "something else" be?
????There is a lot of talk in Canada about "reversing lines." Currently today, as strange as this might sound, we have imported oil that comes into the east coast that is then refined in Sarnia, Ontario. And Albertan oil is going south. It's just economics. Now we're talking about reversing that line -- taking western oil for usage all the way to the east coast. That would open up the potential for lines from eastern Canada to head into the eastern U.S. We will find some way of making it work if Keystone continues to be caught up in politics.
????Evironmental groups helped kill Keystone. But whether or not the U.S. wants to, they're going to need to deal with the tar sands for years to come, right? You've got all the oil.
????You're absolutely correct. We're currently sitting on the third-largest proven reserves in the world. With technology advancement over the next ten years, we will have the largest proven oil reserves in the world, ahead of Saudi Arabia. "Proven reserves" is calculated by determining you can economically pull out of the ground. Right now only 10% of what we know is there is considered "proven." But with any tweak in technology, that goes to 15%, and at that point, we have largest reserves in the world.
Which makes you the obvious target for environmental groups.
????Indeed. If I am part of an organization that wants to rid the world of fossil fuels, I may as well put my target on the place that is the largest obstacle, which has largest proven reserves in the world.
Your Prime Minister made a fairly quick visit to China shortly after Keystone was quashed. Was it just a social visit?
????It wasn't just about panda bears, I can tell you that. The intent of that trip was to send this message to China: "You are a major investor in our country, you need our product, we have excess product, and we want to get it to you." It's as simple as that.
????Today, Alberta exports 1.5 million barrels a day. Just with production that is coming on-stream, we will be exporting between 4 and 5 million barrels per day by 2020. That's a huge jump. The U.S. could consume it all. But we don't want to rely on just one customer. By 2020, all things being reasonable, the U.S. will be a larger customer of ours, and we will be supplying a larger portion of your oil than at any time in history. But at the same time, we will be opening up global markets for our product.
Sounds like a great negotiating position to be in.
????I think we have a very good example of what can happen when you look at natural gas. The vast majority of Canadian gas has been sold to the U.S. And if you combine the price of gas and exchange rate, our revenues from gas sales were about $5 billion five years ago. This year, they will be $1 billion. The discovery of shale gas has driven down prices and taken away our only customer. We now have four proposals to get liquefied natural gas to our west coast to send it abroad. We will be opening up, for our producers, the ability to get international prices for gas, which are three to four times what we get in North America. We relied on one customer, but the U.S. domestic supply exploded, they don't need us as much, we are stuck with all of our gas at giveaway prices. We can't let that happen with oil.
You're a politician. How do we end the politics of what seems a win-win situation for both countries?
????At your end? You tell me. The roadblocks are indeed political. But all you have to do is set the politics aside and look at the economics. Take oil. You're importing 10 million barrels a day at Brent prices. The Saudis are not selling you oil at WTI prices. Brent is almost $20 a barrel more than you would be paying for oil from us. How the hell does that make any economic sense? It's a no-brainer that we find a way to get more business done.
