We are reminded daily just how much of our future depends on exporting oil from the Alberta Oil Sands.
Really? Says who? Like Alberta, Saudi Arabia is a major oil exporter and both economies are currently dependent upon revenues from these exports. We hear regularly how these oil exports from Alberta are in our national interest. Perhaps we should be aware of just what is currently happening in Saudi Arabia. They are actively moving away from a dependence on oil exports. Oil exports will not determine their future.
Data from energy industry consultant Rystad Energy says that on average it cost SA less than $9 to produce a barrel of oil last year. The cheapest oil in the world. Similar costs to extract a barrel of oil from Alberta’s Oil Sands, depending on the technology used, varies from a low of $43 to as much as $70.
You may deduce from these figures that SA may be sitting back and enjoying the obvious price advantage that they have. Nothing could be farther from the truth.
SA Crown Prince, Mohammed bin Salman has told Bloomberg news that “within 20 years we will be an economy or a state that does not depend mainly on oil.” He is determined to wean the Kingdom off fossil fuels.
His “Vision 2030” is a comprehensive and far reaching detailed program to create a national economic and social transformation, to modernize the Kingdom and free it from its dependency on oil exports. It will use its huge sovereign wealth fund to diversify the economy and will source a minimum of 30 per cent of its power from non fossil fuels within just 12 years.
Will the Crown Prince succeed? Time will tell, but maybe, just maybe, we should use a page from the Kingdom’s playbook and wake up to the reality of future oil and acknowledge the “due date” regarding our ongoing commitment to supporting the Oil Sands.