EDMONTON, Alberta—In a 21st-century oil boom, this sparsely populated Canadian province has become one of the world’s newest petroleum powerhouses. Foreign investors are piling in, and Alberta plans to double production over the next decade.
The problem is that the U.S.—the biggest consumer of Alberta petroleum—may not want the additional oil.
Most of Alberta’s 1.5 million barrels of daily exports are extracted from oil sands, or bitumen. Turning this tar-like substance into oil is an energy-intensive process that generates lots of carbon dioxide, a gas suspected to contribute to global warming. Almost all the oil produced ends up in the U.S., where environmentalists and some powerful Democrats have lined up against importing any more of the stuff.
Washington remains ambivalent about a proposed expansion of a pipeline that could nearly double exports from Alberta to the U.S. Another line—proposed to pipe Alberta oil to the Pacific, where it could be shipped to Asian markets—is opposed by native Canadian groups.
“Alberta will be in a very difficult position” if either one of the two pipelines don’t go forward, Alberta’s Energy Minister Ron Liepert said. “By 2020, we’ll be landlocked in bitumen. We have to get it to market, and right now we don’t have the infrastructure in place.”
Canada’s constitution cedes ownership of its energy reserves to its provinces. That essentially makes Alberta its own petrostate. And Edmonton is mounting a public-relations war to find new markets for its oil.
The province’s equivalent to a U.S. governor, Premier Ed Stelmach, shuttles regularly to Washington. Alberta has flown up both Democratic and Republican U.S. lawmakers, along with Hollywood director James Cameron, an oil-sands critic, to show what officials say is the industry’s improving environmental record.
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