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Lethbridge Herald Newspaper Archives

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Lethbridge Herald, The (Newspaper) - April 22, 1974, Lethbridge, Alberta 'Think tank9 wants to recreate another Persian Gulf. in Northern Alberta The only hope for energy security this century WASHINGTON Despite ridicule, invective and political controversy, Herman Kahn and his associates still believe that their ideas to recreate the Persian Gulf in Northern Alberta is irresistible. Kahn is head of the Hudson Institute, probably the world's most 'prestigious "think located in the quiet woodlands at Croton on Hudson, north of New York City. The idea is a crash program to develop Alberta's oil sands by building 20 plants at a cost of billion within four or five years. The plants would produce 1.2 billion barrels of oil per year; this is about "twice as much oil as the whole of Canada consumes at present. The money to do it would come from the United States, Japan and Western Europe, Canada would repay the "loan" with the oil produced. This fantastic concept has boggled the Canadian mind. It has raised cries of "rape" and "conspiracy" and caused a political furore in Ottawa. Yet Kahn and Co. maintain that it is a scheme that offers the major industrial nations "their last best hope" of energy security and stable prices in this century. The political and economic advantages are immense, they say. Perplexing It would cement the shaky Atlantic Alliance, obliterate the threat of Arab oil blackmail and reduce the effectiveness of Russian influence in the Middle East. And it would ensure development of a great Canadian resource absolutely free. That such bold logic escapes Canadians perplexes the thinkers of the Hudson Institute But they do have at least one ally in the Trudeau government Supply and Services Minister Jean Pierre Goyer, who had been darting about Canada TAKE A GENTLE LAXATIVE From the makers of TUNIS Take Rontle acting IsR Nature'3 remedy' NJ is an al! vegetable laxative Forcvpr 70 years, has been giving folks pleasant, effective rphef overnight NttoniEht tomorrow alright! (JCGUU1S- CHOCOLATE COATED- JUNIORS promoting their project with a sophisticated presentation at public speaking engagements. Representatives of the institute have also called on Energy Minister Donald Macdcnald and External Affairs Minister Mitchell Sharp in Ottawa. They say they received a good hearing, but no commitments. In public, Sharp and Mac- donald have given the impression that they do not favor the Hudson scheme. Kahn is said to have talked to Trudeau privately at a meeting in Europe last year, but the prime minister has been tantalizingly enigmatic, refusing to say what the government policy is, if there is one, or when it might be decided. Yet Trudeau refuses to repudiate Goyer's enthusiastic promotion campaign. The Hudsonites have also gained the ear of U.S. energy "Czar" William Simon, who discussed the oil sands with Macdonald here in late January, and who raised the subject again at the International Washington Energy conference last month Fear The Japanese have been actively pursuing the idea, and it is likely to be on the agenda of prime minister Kukeui Tanaka when he visits Canada. Canada's fears of foreign exploitation, economic dis- ruption and some sort of corporate conspiracy are all unfounded, according to Nick Fedoruk, a member of the Hudson Institute professional staff who has been working closely with Kahn on the oil sands concept. Fedoruk hastened to add, in an interview here, that the institute which has a staff of about 40 works as "a group" and individuals are not usually credited with originating specific concepts. Even though the Alberta oil sands contain what is believed to be the world's largest petroleum deposit, most people are probably pretty vague about what it all means. The story began about 200 years ago when British explorer Peter Pond saw Cree Indians mixing sticky black sand trom the banks ot tne Athabasca River to waterproof their canoes. The black stuff is crude bitumen, a heavy, tar like substance which contains oil. The oil sands cover an area of about 19.000 square miles in northern Alberta within a 250 mile radius of Edmonton. There are four main areas the Athabasca sands, encircling Fort McMurray; An in-depth report by FRANK BUTTER, Herald Washington Bureau This is Northern A Iberta not exactly, but there's enough oil there for a desert kingdo the Wabasca sands, just to the southwest of these; the Cold Lake sands, to the southeast, and the Peace River sands to the west. In summer the sands became "like sticky molasses mixed with coffee according to an Alberta government study paper. According to the Hudson Institute, these sands contain a total of 900 billion barrels of oil. This is almost one and a half times more than the proven oil reserves of the entire world. "We are talking about a potential Persian says a paper produced by the Hudson Institute. Unproven The institutes estimate is unproven, and considerably higher than the one published by the Alberta government, which says there are 300 billion barrels "ultimately recoverable" and almost 27 billion barrels which can be recovered by existing techniques At present the only way the oil can be "mined" is by the open pit technique. The bitumen is then processed with hot water, which separates the oil. There is only one existing oil sands plant in operation, Great Canadian Oil Sands, producing about barrels of oil a day and using the hot water processing technique, 20 miles from Fort McMurray. The company is 96 per cent owned by Sun Oil, a U S. firm A second plant is to be built by Syncrude Canada Ltd., a consortium of four companies, Imperial Oil, Gulf, Atlantic Richfield and Canada Cities Service Ltd., to produce barrels of oil by 1978, and a third plant is proposed by the Shell oil group with a target of barrels a day by 1980. The key to massive development of the oil sands is a breakthrough in minine Home Pitfieid Foods Ltd. 1st Avenue and 11th Street South, Lethbridge Wish to inform their Customers that they will be CLOSING Thursday, April 25 at p.m. and will be RE-OPENING Wednesday, May 1st at a.m. in their New and Permanent Location at 3rd Avenue and 3rd Street S. We would like to welcome all our regular and new customers and thank you for your patronage in the past! technique which Syncrude, Shell and the Alberta government are working on, and "there is all reason to believe that technology will be perfected" according to the Hudson Institutes intelligence. This would be "in situ" extraction of the oil without stripping the earth's surface. It would be accomplished by liquefying the oil underground perhaps by injecting steam heat, or dissolving agents, or by explosions, and forcing the oil into pools so that it can be brought to the surface through conventional wells. One reason why the oil sands attracted the Hudson Institute, according to Fedoruk, is that the technology and research are three to five years ahead of those for another huge potential oil source shale in the Rockv Mountains. Charges Although there have been charges in Canada that members of the Trudeau government are interested in the Hudson Institute plan because of their links to private corporations, Fedoruk said there is no direct corporate involvement. "There is no commercial he said. "It is our own project." Here's how it would work, according to Fedoruk. The U.S., Japanese and West European governments would each put up 6 billion over a period of four years. This plus 2 billion in interest fixed at six per cent would cover the construction of 20 plants in Alberta. The over all project would be operated by a Canadian Crown corporation But, in order to protect Canada's economy trom becoming unbearably boomed, with the resulting imbalance of payments and currency, only one third of the "investment" would be in cash, the rest would consist of equipment and goods. "Construction could be isolated almost completely from the Canadian economy, depending on Canada's wishes, says a Hudson Institute study paper. Finding the people to build the plants would be another problem. What Fedoruk characterized as a rather casual remark by Kahn has been blown up inio a major issue the idea that Koreans" would De "'imported" as a sort of slave labor force Fedoruk conceded that Kahn had suggested employing Koreans but dispute the figure "about one tenth would be more he said and scoffed at the idea of "slave labor." Kahn, he said, had been very impressed with the" calibre and industriousness of Korean workers on a recent visit to that country and mentioned the possibility of employing them because they were resourceful and reliable and represent one of the world's few untapped skilled labor pools. The billion cost of the 20 plants would be repaid by Canada in oil approximately the first seven years worth of oil produced from the Alberta sands. During that time the oil would be surplus to Canada's needs, anyway, Fedoruk said. But, by 1984, when the "loan" is paid off, Canada would own the 20 plants and could take all the oil they produce for its own use if it wants to. Coincidentally, 1984 is the year when the National Energy Board has predicted that Canada's domestic oil needs will exceed production from conventional sources. The amount of oil needed to repay the billion would amount to only about 6 per cent of the total which the Hudson Institute maintains can be produced in the useful life of the oil sands deposits. The price of the oil from the sands would be fixed in advance at about a barrel. Production cost, according to the institute, would be about a barrel. Although this price is relatively high, it is not as high as recent world levels, although these are expected to drop somewhat But the Hudson Institute envisions the Alberta price as insurance that the world price will not go any higher. "Athabasca oil can be undersold, but Athabasca oil can act to keep world prices below a barrel C.I F. or landed price and the project can easily be expanded where the institute says. One way to prop up the price would be for the participating countries who are all members of the organization of economic co operation and development, to impose a tariff on oil imported from any source. But as important as price is the contention that the Hudson project would "prevent Arab domination of energy for the rest of the 20th century." Dismissing pre embargo business as usual with the Arabs as "totally the institute m manipulation by the Arabs if they can't have their way in the Middle East. In fact, there is already considerable interest, both in the U.S. and Japan, in financing massive energy projects in the Soviet Union. The "unsettled" relationshp of the U.S. and its major allies has become obvious since the Arab embargo and got worse after the Washington energy conference which had been supposed to set the stage for a new area of co-operation. "Their continued disarray only further encourages sees the oil sands development as "a deterrent" to further pressure or market Soviet boldness and willingness to support disruptive trends in the Middle says the institute. "The Athabasca alternative would have the advantage of providing a concrete focal point for co-operation between the major developed countries of the world, which would counteract the current secular trend to a further breakdown of OECD, NATO and EEC (the common its analy- sis continues. "It should be clear that to everyone that once the Americans, Japanese and Europeans co-operate on the project they may co-operate on others as the institute adds. But what of Canada? "From the point of view of Canada, the Athabasca project is extremely the institute claims. "What the project promises to Canada is to develop one of their great natural resources in such a way that they will have full ownership of the resource and full control of the product sometime in the early or mid eighties, which happens to be the time at which they expect to have a Squeeze on conventional oil production. "This scheme would provide a method for developing the plant necessary for large scale oil production to meet Canadian and world needs in the 80s and 90s with no expense to Canada and with no risk to Canada." Of course all that presupposes that Canadians want to share their riches with the rest of the world. It is a responsibility that the Hudson Insistute considers valid. "As they concert their efforts to create a safer world for all, one might reasonably speak of a new belle eopque in which the most vast riches and their new sense of security and dynamism promotes rapid world development for the benefit of all." Ask About The NEW INVISIBLE Multicocal Lens (MULTILUX) For 3 days only! Now thru Wednesday, April 24th PHOTOGRAPHERS HOURS Tuesday, April 23 9 30 a m to 5 30 a m Wednesday, April 24 930 a.m. to 5.00 p m A beautiful 8" x 10" COLOUR PORTRAIT of your child ,99 PER SUBJECT PLUS .50 HANDLING PER PORTRAIT Capture your child's personality in a lovely, full colour portrait! Age limit-3 weeks to 14 years offer per child, 2 per family. 99C for each child photographed in a group portrait. Extra prints available at reasonable prices, such as one 8 x 10 for Choose your favorite pose from actual finished proofs. Photographers Location: Major Appliance Section, Second Floor We use only the finest Kodak Pro- fessional Film and materials. If you aren't satisfied with these lovely portraits, your money will be refunded. A variety of mats and frames also available EATON'S The unique Mercedes-Benz 450SE Gets up to 25ff better mileage lhan domesnc .ind has .1 higher resale value I'lu.s a turning circle equal in elements. Ahoin S 19.500 Ask v our aboui the beauti- fully and arrange or a lesl drive PRO-MOTORS 1520 2nd South, 328-8117 ;