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Sensibly, provision is being made for when the energy reserves run out. Fully 30% of all royalties are deposited in a "Heritage" trust fund, which now totals $5 billion and is expected to reach as much as $34 billion by the end of the 1980s. The fund makes major loans to other provinces (at competitive rates), but its main purpose is to bankroll Alberta's economic future. The provincial government has acquired its own Pacific Western Airlines; set up a local company to invest in all forms of energy, including oil from the thick, gummy tar sands; and offers fat incentives to new firms willing to open up in smaller communities.
It is quite possible that Alberta's energy bonanza will not give out for many decades. Expert estimates of conventional oil reserves range from 5 billion to 8 billion bbl. (The U.S. has proven reserves of 28.5 billion bbl., and Mexico has 16 billion bbl.) Most significant, Alberta has huge additional "unconventional" sources of energy that are not yet economical to tap but will become increasingly feasible —and necessary—as oil prices rise. The basic sources are heavy bitumen oil and the tar sands, which together could provide as much as 320 billion bbl., or enough to supply the entire world demand for some 15 years at current rates of use.
Two producers, Suncor and the Syncrude consortium, are turning out a total of some 150,000 bbl. a day from tar sands. A group headed by Shell has won approval for another project that will cost close to $5 billion and help lift output from the sands to an expected 500,000 bbl. daily by 1985. Meanwhile, Exxon's Imperial Oil plans to spend more than $5 billion to produce oil from heavy crude. These projects may be stretched out if some recent finds of conventional petroleum elsewhere prove more financially attractive. Some oilmen believe that two offshore strikes, in the Arctic's Beaufort Sea and along the Newfoundland coast, could prove to be of Middle East proportions.
Natural gas also seems boundless in Alberta, and it provides a double benefit because sulfur is a byproduct of refining. The National Energy Board puts the province's gas reserves at 60 trillion cu. ft., equal to almost one-third the entire U.S. reserves. Energy developers argue that the real total is many tunes that size, and they are pressing to sell more to the U.S. Canada exports about 1 trillion cu. ft. a year, notably to the Northern Plains states; producers would like this increased threefold.
There is little chance, however, that Canada will soon raise its net oil sales to the U.S., now a rather modest 100,000 bbl. a day, (vs. 425,000 bbl. from Mexico). Dedicated to energy independence and fearful that conventional oil will decline in spite of the recent finds, Canada is not even fully exploiting Alberta's capacity of 1.8 million bbl. a day. Says Mitchell Sharp, the commissioner of Canada's Northern Pipeline Agency: "The U.S. should drop any ideas it might have about a North American energy common market."