Canada and Britain can help achieve global energy security by working together on international resource development, says the head of the British government's foreign trade and investment agency.

Andrew Cahn, CEO of UK Trade and Investment, said Canada and Britain can jointly promote the idea that energy security depends upon finding international cost-effective, secure and environmentally friendly ways of exploiting known oil and gas reserves and exploring for new ones.

"Energy security has two different meanings," said Cahn. "One is making sure that we have adequate supplies for our growing needs in the future. The other is to make sure we are protected against terrorism and other threats.

"On the latter, huge strides are being made and a lot of joint work is done. On the former, the resources are there - and Canada has a large amount of them - but there are technological challenges. Only a small proportion of Canada's resources are now available for exploitation using current technologies."

Andrew Cahn

Cahn made the comments while taking a break from a recent global energy security conference - which included CEOs from some of the world's top energy producers - at the Spruce Meadows equestrian facility near Calgary.

His government agency, which has 2,500 staff throughout the world, including some at an office in Calgary, seeks to attract direct international investment in Britain and is setting its sights on Alberta as a key energy-trading partner.

"We (Britain) are no longer self-sufficient in oil," said Cahn. "That means that we are very conscious of needing to have global energy security."

Both Britain and Canada want to challenge the idea that energy should become a "national preserve" and the only way forward is to nationalize companies and exploit oil and gas reserves in a national way, he noted. "It's an international resource and must be looked at internationally. Both countries look at it on those terms."

But Cahn said the Calgary conference barely addressed the issue of energy security, which is all about locating adequate reserves, exploiting them effectively and efficiently, and making them available for increased demand from developing countries such as China in the years to come.

"One of the arguments Rex Tillerson (ExxonMobil's president and CEO) was making (during the conference) was that there is an inter-dependent need," said Cahn. "You cannot have energy independence. You cannot have each country saying: 'We will make ourselves independent of other countries.' It's a global issue and a global problem.

"That's absolutely true, and the other issue is the environmental one. How do we make sure that we supply the world's energy needs and allow economic growth to continue, while also at the same time dealing with the environmental challenges we face?" Canadian firms invest $59 billion annually in Britain while U.K. companies spend $39 billion here.

The figures are based on investment in all sectors, but Canada and the U.K. already have longstanding energy ties.

Cahn said Britain's view of Canada as an energy producer has changed over the past decade. As new oilsands projects continue to ramp up, Britain wants to ensure that the Canadian industry looks east over the Atlantic while also looking west toward emerging markets in Asia.

"Canada has always been an oil and gas producer, but it's catapulted up the league table (or standings) to be the second-largest reserves available after Saudi Arabia with a much more normal political and business situation," said Cahn. "It's a country which Britain feels very comfortable in ... We now see Canada as a really major energy producer and one which can be hugely influential for good in the world of oil and gas."

He said declining reserves in the once-bountiful North Sea have provided U.K. firms with expertise in finding innovative technological solutions and overcoming environmental challenges, which can also be used to extract oil and gas from hard-to-access areas in Canada.

As reserves in the Western Canadian Sedimentary Basin decline, Canadian producers have repeatedly stressed the need to tap into unconventional plays like coalbed methane, tight gas and shale gas while at the same time calling for the development of new technologies.

Cahn said Canada can supply minerals, oil and gas, expertise, financial services, insurance and information technology to Britain's energy sector.

In turn, U.K. companies can supply insurance, accountancy and legal services, access to the public market through the London Stock Exchange and iron alloys that can be used for construction in major oilsands projects in Canada.

According to the U.S. energy information administration, which analyses energy supply and demand on a country-by-country basis, the U.K. is the largest oil and gas producer in the European Union. But it became a net importer of gas in 2004.

U.K. oil and gas production has declined steadily following its peak in the late 1990s, as new discoveries have lagged well behind the maturation of existing fields. The government has sought to offset the decline by increasing domestic production through efficiency gains and the exploitation of marginal fields, establishing necessary import infrastructure such as liquefied natural gas (LNG) terminals and transnational pipelines and investing in conservation and renewables.

Cahn said British firms could find cost-effective carbon-capturing methods to extract oil from the Alberta oilsands in an environmentally friendly way.

Although large cost-effective carbon-capturing facilities are considered a long way off, Cahn said the technology is becoming more and more popular in Britain.

Cahn said his primary purpose in attending the Calgary conference was to network with energy industry leaders, because it's very important for the British energy industry to be fully engaged with what's happening in Alberta.

"It's not a gold rush - it's an oil rush," said Cahn.

(Monte Stewart can be reached at monte@businessedge.ca)