IEA still sees major role for Canadian oil sands

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PARIS — The Canadian oil sands sector is “down but not out” in its role as a major and secure safety net in the global energy market, the International Energy Agency reported Monday.

The Canadian oil sands “appears to be the sector hardest hit by the recession and the sharp fall in oil prices,” the Paris-based agency said in a report assessing the impact of the economic crisis on the world’s oil and gas supplies.

The IEA said the high-cost oil sands sector accounts for 1.7 million barrels a day (mb/d) of the 2.0 mb/d in production that has been deferred or cancelled in recent months due to the plunge in energy prices.

As a result, total production growth in the sector — traditionally viewed as the “fallback” energy source for countries outside the Organization of Petroleum Exporting Countries, according to the IEA — is projected to fall 40% during the 2008-14 period.

The IEA, however, said it is “cautiously optimistic” and described the oil sands sector “down but not out” even though it is frequently cited as a culprit in Canada’s inability to reduce greenhouse gas emissions.

Canwest News Service