U.S. tycoons Bill Gates and Warren Buffett tour Alberta oilsands

As reported in the Calgary Herald

by Jon Harding

Two of the world’s richest people, Microsoft Corp. founder Bill Gates and his friend, American investment magnate Warren Buffett, quietly flew into northeastern Alberta on Monday, where they took in the oilsands, apparently with awe.

Buffett and Gates — No. 1 and 3, respectively, on the world’s richest people list in the March edition of Forbes magazine — were hosted by a group that included Canadian Natural Resources Ltd. and the Canadian Association of Petroleum Producers at Canadian Natural’s $9.3-billion Horizon oilsands development.

Representatives from CAPP made a presentation to the American power duo, who were pegged by Forbes in the spring as having a collective net worth of a cool $120 billion US and who could be looking for secure places to make resource-related investments now that the U.S. dollar seems to be recovering.

“We were asked to come up and give a general overview on the oilsands and Canada’s role in the world of energy in general, which we did,” said Greg Stringham, CAPP’s vice-president. “They were exercising curiosity, basically saying, ‘Wow, this is neat.’ ”

The two tycoons were hosted by, among others, Canadian Natural vice-chairmen Murray Edwards and company chairman Allan Markin, who are among Canada’s wealthiest people.

According to Forbes’ March list, Buffett, 77, known widely as America’s most beloved investor and whose assets are largely held within his Omaha, Neb.-based insurance firm Berkshire Hathaway, was worth an estimated $62 billion US. Computer wizard Gates, 52, who had been the richest man on the planet for 13 straight years, had a net worth of $58 billion US.

The prestigious group made its way to the Horizon site about 100 kilometres north of oilsands hub Fort McMurray. Horizon will be Alberta’s fourth major oilsands mine when first production begins this fall.

The Horizon project has a landing strip, which has been used by Canadian Natural to shuttle thousands of workers to and from the project during its four-year construction.

Canadian Natural spokesman Rob Larson confirmed the tour involving Gates and Buffett happened, but he said Canadian Natural management would not comment beyond that.

One source said Gates and Buffett, who in recent months said he favours investing in the Canadian oilsands because it offers a secure supply of oil for the United States, visited the booming hub to satisfy “their own curiosity” but also “with investment in mind.”

As of 2006, Buffett was an investor in American oil giant ConocoPhillips, which owns sizable oilsands assets in a partnership with Canada’s largest oil company by market value, EnCana Corp.

Alberta’s Athabasca oilsands are one of few oil basins in the world where production is slated to grow in coming years and the massive play has been the focus of global attention.

While the thick, oil-soaked sands are expensive to process — some observers now say oil prices have to be above $70 to $80 US a barrel to make oilsands economics work — there has been a rush by companies into the sector over the past half-dozen years.

There is presently $125 billion worth of new construction being planned, which when combined with operating expenses add up to a whopping $215 billion over the next five years.

In June, CAPP reduced its estimate for oilsands production about 10 per cent to 4.8 million barrels per day by 2020 from a previous estimate of 5.3 million bpd, due to “constraints” unrelated to oil prices. Today, production stands at a little over one million barrels a day.

Labour availability and inflation around labour and materials such as steel stand to create a lag in previous growth forecasts.

The past few months have been particularly tumultuous for the oilsands industry.

Shares of companies active in the region have been hammered alongside falling oil prices, but are considered to be blue-chip, long-term investments.

The industry has also been under siege from environmental groups and foreign governments, including U.S. mayors, who voiced concerns about the industry’s impact on air quality due to its level of emissions, on water quality in the Athabasca River and about the slow rate of land reclamation by industry players.

Industry stalwarts Suncor Energy Inc. and the Syncrude Canada Ltd. joint venture have been mining oilsands crude for more than 30 years, followed more recently by Royal Dutch Shell PLC.

Fort McMurray Mayor Melissa Blake was not aware of the visit by Gates and Buffett, but the politician had been in Victoria since the start of the week.

She said the profile of one of the world’s largest emerging energy plays continues to grow and visits to the area by high-profile investors, politicians and even royalty have become common.

“It’s astounding to me, frankly, the calibre of these individuals to just seem to arrive quietly in our community,” said Blake.

Buffett told Fortune magazine in 2006 that he would begin giving away 85 per cent of his wealth, with most of it going to the Bill & Melinda Gates Foundation, the world’s largest philanthropic organization.


Restoring Power

Restoring Power

By Glenn Maltais

The forces at work concerning America’s increasing dependence on fossil fuels and foreign oil represent profound short and long term challenges; hostilities abroad, skyrocketing energy costs and indifference at home, perpetuated by far reaching special interests.

Yet, within our nation’s social and political conscience, between the far left and far right accusations and condemnations, a non-partisan movement is under way, clearing a path for realization and reason to prevail concerning the most important issues of our time; safeguarding our planet and obtaining U.S. energy independence through clean, domestic renewable sources.

The growing number of individuals and businesses taking part in this long overdue movement are as diverse as the economic, environmental and security concerns bringing them together. However, there is one common belief we all share; be it through indifference, ignorance or blind faith, all of us have participated in creating this precarious (fossil fuel induced) situation that exists today. Likewise, it will require everyone’s participation to bring about a new level of thinking with regard to the environment, natural resources, economic stability and national energy independence.

With world oil production nearing peak capacity; energy demand and climate-change increasing unabated, man’s law of supply and demand, coupled with nature’s law of cause and effect, will inevitably bring about change. The only question is…for better or worse? Will we as a nation have the will to act now; not talk, not posture or politic, but to act out of conscience endeavor to usher in a new alternative energy era? Or through indifference will we be acted upon by the environmental, economic and national security threats now gathering on the horizon?

As the world’s largest consumer of energy and contributor to climate change, if realization and reason are to prevail, we have little time for politics as usual, half truths, ignorance or indifference. Whereas we are not powerless to bring about change…and the time for change is now!

When it has come to matters concerning forward-thinking national energy policies, dating back to the Arab oil embargo of 1973, each new administration has pledged to lead our country to greater energy security, yet our “leaders” have been far more proficient at following (money & power) than they have at leading. Consequently, our foreign oil and fossil fuel dependence increases year-over-year, as our national and environmental security decreases at our peril.

Yet, as in the past, it is through the leadership and inherent power of “we the people” that these matters of great import can be elevated to a level of national priority. Through words and deeds, if we let our leaders know that we care…loud and clear…they will follow.

What is Peak Oil?

What is Peak Oil?

By Michael Bloch

If you haven’t heard the term ‘Peak Oil’; brace yourself as you’ll be hearing it a lot more in the years to come. It’s been a whispered term for many years, much like “global warming” was back in the 60’s.

In 1956, geophysicist Dr. M. King Hubbert predicted that oil production in the USA would reach its peak around 1970 and then go into a state of decline. He also predicted that global oil production would peak around the late 90’s/early 21st century. He plotted the increase, peak and decrease of oil production on a graph; and his theory is popularly known as Hubbert’s Peak.

Dr Hubbert also flagged with the world the issue not only of declining oil production, but the increasing cost associated in extracting what oil remained after the “low hanging fruit” had been picked.

There is no doubt that the cost of oil production in recent times has been huge – not only in the exploration and production itself in financial terms; but also in terms of environmental damage caused. Added to that has been the huge military expense and associated human suffering caused through wars that have been pushed on the public by their governments as being issues of national safety rather than their true motivation – control of oil reserves. The war in Iraq is a classic example of that.

Dr Hubbert was ridiculed by many when he released his research; but his predictions appear to have come true. USA oil production did indeed go into rapid decline around 1971.

The Organization of the Petroleum Exporting Countries (OPEC), a cartel of countries whose members sit on around two-thirds of the world’s oil reserves have been in a state of public denial about peak oil theory for many years; but that seems to have changed recently also.

In the November/December 2006 issue of OPEC’s publication; “OPEC Bulletin”, on page 62 is an article by Dr Shokri Ghanem, Chairman of the People’s Committee, the National Oil Corporation (NOC) of Libya; discussing not the “if” of peak oil occurring; but “when” and he acknowledges that we may already be in that timeframe.

Fact: we are consuming more oil globally and the trend will continue

Fact: it is not a renewable resource in relation to our consumption levels

Fact: countries go to war over control of oil reserves

Fact: oil consumption has a negative impact on the environment

Fact: gas at the pump continues to, generally speaking, increase in price

Fact: many plastics and other trappings of the modern world are made from oil

Fact: the world is running out of easily sourced oil; i.e. production using current technology has peaked, and what oil is left will cost more to pull out of the ground using methods most likely to be even more unfriendly to the environment.

Paints a rather grim picture for our oil addicted society doesn’t it? If we’re willing to invade a country now for oil, how much more aggressive will we be when supply really gets tight?

How does food get to your table? Do you grow it in your yard, or is it trucked in to your supermarket? How do you collect it; do you walk to the supermarket or drive? How do you get to work?

How many affordable alternative energy vehicles are now on the market?

When the Iraq war and other geo-political issues pushed the price of oil to record levels; people stopped buying SUV’s. Within a couple of weeks of a drop in prices; they went back to buying them again. It just goes to show how little we learn. We had a taste of what really expensive gas was like, yet as soon as the pressure was backed off a little; we went straight back to our previous oil-greedy ways.

We won’t learn, oil will have to run out or become so horribly expensive that only few can use it to any degree. What will it cost? How much will it impact on the cost of other items? How many more people will have to die and how much more will our environment suffer while we squeeze out the last viable drop of oil that the planet has to offer?

These are important issues to think about – don’t rely on governments to provide the answers to a world without oil as they’ve all been in denial for way too long. Yes, there are renewable/alternative energy programs in place; but given the major role that oil plays in our lives; permeating just about every aspect; whether these new, cleaner technologies can be rolled out broadly before we hit the real crunch is something I’m not very confident of.

The time is now to start thinking about and making changes to the way you live so your life is not so oil-centered. Remember that a lack of oil extends far beyond just not being able to drive your car – so many other products, services and industries are based on oil.

Michael Bloch is the author and owner of Green Living Tips.com, an online resource powered by renewable energy offering a wide variety of earth friendly tips, green guides, advice and environment related news to help consumers and business reduce costs, consumption and environmental impact on the planet.

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