First Canadian Victims Of Environuts

Reducing oil demand could trigger tremors

SHAWN MCCARTHY
From Thursday's Globe and Mail

OTTAWA — U.S. President George W. Bush is not alone in promising policies that would slash oil demand — the European Union and China have also set ambitious efficiency targets.

And that concerted action by the world's three leading energy consumers could put a damper on demand for crude oil and downward pressure on prices over the long term.

While Mr. Bush talks about ending dependency on imported oil from the Middle East, Canada is the largest single supplier to the United States — exporting as much crude to the U.S. as the Persian Gulf countries combined. And it is the high-cost producers, such as Alberta's oil sands companies, that would be hit hardest by weak demand and soft prices.

“If I was a producer, I would be really, really concerned,” said Paul Ting, a long-time Wall Street energy analyst who now runs his own consultancy. “There's not going to be demand destruction, but there will be erosion, and that is going to be a big problem for them.”

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