VANCOUVER — Canada could become the next energy superpower by exploiting its vast oil sand deposits, an industry insider said recently.
However, a lack of leadership, efficiency and engineering expertise have inflated mining costs and held the industry back, said Sam Spanglet, a former vice-president of Oil Sands Shell and a former president of Albian Sands.
Spanglet, born in Germany and educated in Israel, spoke to about 30 Vancouver business executives last month at a luncheon at the Terminal City Club. The luncheon was part of the Albert Einstein Business Forums, hosted by the Canadian Friends of the Hebrew University (CFHU) of Jerusalem. Co-chaired by alumni Gary Segal and Randy Milner, the forums were created to highlight the connection between science and business at Hebrew U.
Spanglet said that a recent drop in oil prices, from $147 to $40 a barrel within three months, was a sign of short-sightedness and economic panic.
“It was an overreaction – the world hasn’t changed that much. Destruction of supply is what’s really going on. Oil is a finite product, and everyday the world produces less than the day before. I believe we are setting ourselves up for a huge supply destruction.”
Economic panic has stopped development in oil exploration, further endangering supply, Spanglet noted. Declining gas prices encourage waste, as drivers hop back into their SUVs and Cadillacs, and harm the environment, he said.
“It’s easy to blame big industry for the environment. But as individuals we are less responsible to the environment than oil companies. We are very selfish. We don’t think three months in advance – we only think about yesterday and today.”
Spanglet added that while we have information about oil reserves in North America, all we know about Saudi Arabia and the Gulf States is what they tell us. “If you want to believe them, be my guest,” he said. “I believe their oil reserves are far less than what they claim.”
Given the probability of an impending energy crisis, Canada is poised to become a huge player in the oil business, said Spanglet. Northern Alberta’s oil sands contain more than 350 billion barrels of crude oil, second only to Saudi Arabia’s reserves.
The advantage to oil sand mining is that deposits are visible at ground level, eliminating the financial risk of exploration, Spanglet said.
Disadvantages are the huge financial and environmental costs of drilling, pumping and treating the thick, viscous oil (also known as bitumen), separating it from sand and converting it into usable fuel, he said.
Mining, processing and construction costs are out of control, said Spanglet, because of bad management and a lack of leadership, efficiency and engineering competency.
He said Canada’s oil industry has been lax in rewarding excellence and punishing poor performance. “Most of the workers hate to perform badly – they want to be successful. But leadership is not doing their part.”
Answers to environmental and economic challenges may very well lie in scientific research, a top priority for the Hebrew U. The university’s four campuses conduct 43 per cent of Israel’s biotechnology research and more than one-third of its academic scientific research overall.
Hebrew U ranks fourth in academic research institution in the Asia-Pacific region and 65th worldwide. Because of the university’s excellence, Israel is ranked 12th worldwide in academic research.
What does that mean for business?
In 2007, Hebrew U’s revenues of $51 million were comparable to those of the Massachusetts Institute of Technology’s revenues of $61 million and Stanford University’s revenues of $50 million. Hebrew U’s net research budget is $107 million, while MIT’s is $1.2 billion and Stanford’s is $1 billion.
Hebrew U’s scientific achievements include:
• Exelon, an FDA-approved drug for treating Alzheimer’s disease and dementia. (2007 sales were $632 million.)
• Doxil, an anti-cancer drug with an innovative delivery system. (2007 sales were $417 million.)
• Drip irrigation techniques that increase food crop production while decreasing water consumption.
• Mobile Eye, an advanced vision-based driver-assistance system that prevents accidents. (2007 valuation was $600 million.)
• Cherry tomato, the world’s most popular cocktail hybrid for greenhouse production. (2007 sales were $73 million)
Dina Wachtel, the executive director of CFHU’s western region, said that the Einstein business forums aim to help publicize Hebrew U’s enormous contributions to both science and business.
In 1925, Einstein was one of the founders of the Hebrew U, she said. Einstein served on Hebrew University’s first board of governors, delivered its inaugural scientific lecture and edited its first collection of scientific papers.