Oil industry official says producers must preserve future production

A representative of the Canadian oil industry delivered a sobering message about the need to reduce energy consumption to business leaders in Halifax on Thursday.

“Industry and government needs to help people consume energy more wisely,” said Carol Montreuil, the Canadian Petroleum Products Institute’s vice-president for Eastern Canada. He spoke at a breakfast meeting hosted by the Atlantic Institute for Market Studies.

With pump prices at their highest levels ever, consumers may be suspicious of the messenger’s intentions, but Mr. Montreuil said petroleum producers need to encourage less oil consumption, otherwise they won’t be able to meet future demand for their product.

The political instability of oil producing nations like Iran, Iraq, Nigeria and Venezuela, along with the rapidly expanding Indian and Chinese economies, and the continued popularity of sport utility vehicles in the United States, are just a few of the factors driving both demand and prices upwards. Oil reserves, which help stabilize prices, are also at a 30-year low, he said.

The price of crude “was too low for too long” from the mid-1980s to late 1990s and that meant the world’s oil producers didn’t invest in developing their infrastructure.

Over the next 25 years the industry has to spend $3 trillion in exploration and refining in order catch up with projected demand, he said.

By 2025 both China and the United States will import two thirds of their oil.

In the meantime, consumers need to cut back on oil as industry gets “through the crunch” of developing their supply infrastructure, including Canada’s refining industry, which is already pushed to the limit, Mr. Montreuil said.

Today, the average Canadian spends about five per cent of their budget on energy costs. While that’s significant, Mr. Montreuil said they probably don’t feel they need to change their behaviour and can tolerate an increase of a few percentage points.

“If we go over $2 per litre, you’re going to see a profound change,” he said.

Federal and provincial governments have a role to play in encouraging energy efficiency, Mr. Montreuil said, including offering rebates on hybrid vehicles, improving building codes, and reducing speed limits, which lowers automobile consumption.

“When you put them together, without much effort, you could reduce a province’s energy bill by 10 per cent.”

The provincial government’s introduction of regulated gas prices on July 1 only resulted in inefficiencies that translated to consumers in the form of higher prices, according to Mr. Montreuil.

“Nothing Atlantic Canada can do, including regulation, will change geopolitical events,” he said.

Michel Samson, the interim Liberal leader, attended the presentation and said considering the potential for a global energy crisis in the future, and Nova Scotia’s limited energy supply base, the province has to begin energy conservation initiatives immediately.

“We don’t have 10 or 20 years to do what’s necessary, we have a few years,” Mr. Samson said.

Although Nova Scotians have shown leadership on other environmental issues, such as recycling, he said, they have been trailing the world in terms of becoming more energy efficient.

He criticized the Tories’ gas regulations, calling them “simplistic” and only capable of providing “short-term stability.”

“Regulation seems to be a political way of sliding this issue under the carpet at a time when we as Nova Scotians need to be having a discussion about how can we become more energy efficient,” he said.