Good intentions, a Yukon trapper once told me, don't buy any whisky.
The best of intentions flowed like a good single malt Scotch last week, at the simultaneous launch in Calgary and Ottawa of the Energy Innovation Network (Energy INet).
Energy INet is the first national collaboration of industry, federal and provincial governments, and the research community to tackle energy-related economic and environmental challenges.
It's obvious that the new network is already many things to different people.
Alberta Energy Minister Greg Melchin, who's also chair of the Western Energy Alliance formed by Western Canadian premiers, sees Energy INet as a vehicle for Alberta and Ottawa to work together to develop resources and protect the environment.
The whole idea is to ensure the country has a "vibrant and integrated energy industry," and for Alberta to recover more conventional and unconventional oil and gas, Melchin says.
Charlie Fischer, president and chief executive of Nexen Inc., who chaired the Calgary launch, sees Energy INet as creating a new spirit of collaboration and co-operation to ensure Canada's oil and gas industry retains its leadership in research and development of new technologies.
Energy-related R&D spending, by the way, declined from $1.3 billion in 1983 to approximately $900 million in 2001. Industry funded 70 per cent of that, while the federal and provincial governments contributed 30 per cent.
For Alberta Environment Minister Guy Boutilier, Energy INet will show the rest of Canada how Albertans "will be responsible stewards of our natural resources."
Alberta Science and Innovation Minister Victor Doerksen sees the new network as ensuring a long-term supply of reliable energy, including alternative energy such as windpower and biomass. As he puts it: "Energy and environment converge at innovation."
Other VIPs at the launch told me they see Energy INet as essentially playing a national co-ordinating role - providing a "one-window" approach to encourage development of new energy-efficient and environmental processes and technologies.
Some, including a skeptical former federal Liberal minister of energy and natural resources, had heard similar rhetoric back in the 1960s about balancing ever-increasing energy development with long-term environmental protection.
How, he asked, will Energy INet get past the hurdles that still exist - such as our voracious demand for energy - to ensure that the vision of sustainability is realized this time?
Patrice Merrin Best, president and chief executive of Edmonton-based coal giant Luscar, who chaired the Ottawa launch, estimated it will probably take about $3 billion to achieve the network's goals. They include:
* building bridges among the disparate players and creating "action plans to accelerate technological innovation;"
* identifying best practices and integrating energy strategies;
* investing directly in research, development and technology commercialization.
That's a pretty tall order even at $3 billion, which I think significantly underestimates what a meaningful national effort will take.
So how much money did Energy INet's members put on the table to fuel their grand initiative?
The figure was nowhere to be seen in the snappy media package. But Merrin Best says it amounted to $25,000 per Energy INet member - the price of admission, as it were.
Yep. That's only three zeros: $25,000 per major corporation, government and large research organization.
Let's remember that in 2003, the oil and gas industry contributed $16 billion (nine zeros for those of you who are counting) to federal and provincial governments through royalties and taxes alone. Several major petroleum firms also had profits that ran to nine zeros.
This national initiative is long overdue. It has great potential to make Alberta and Canada global leaders in producing a long-term, sustainable, environmentally protective supply of energy.
Energy INet's initial 45 members also make an impressive list. From the oilpatch, it includes influential players such as Nexen, Canadian Natural Resources Ltd., Husky Energy, Nova Chemicals, Petro-Canada, Shell Canada, Suncor, Syncrude and Western Oil Sands.
But $25,000 a head doesn't buy a lot of whisky, especially for this big a glass. If Energy INet wants to advance its goals, its members are going to have to ante up serious financial commitment.
A couple of digits with six zeros after them would wet the whistle, as the old trapper would say.
The folks planning to build Suncor Energy Inc.'s new $5.9-million Voyageur upgrader at its Fort McMurray oilsands operation might want to go back to school.
They could learn a thing or three about avoiding the cost overruns that have plagued such projects from a couple of University of Calgary students.
Jim Lozon and Lloyd Rankin, civil engineering PhD candidates specializing in project management, have looked at the planning - or lack thereof - that goes into large oil and gas construction projects.
Their study, Detailed Execution Planning for Large Oil and Gas Construction Projects, concludes that managing such projects boils down to one thing: Excellent planning.
"We're talking about having all of the right equipment, right amount of labour and the right working conditions all at the right time," Lozon says.
Adds Rankin: "We believe that with the proper detailed planning, we can increase labour efficiency on construction sites by about 25 per cent."
Their study should be required reading for every oilsands operator, including Suncor. The company's last large-scale expansion in 2001 - the Millennium project that added a second upgrader to the Fort McMurray operation - ran 70 per cent over its original $2-billion budget.
Suncor appears to have learned its lesson. The company says all the engineering for the new Voyageur upgrader will be finished before construction starts. Now there's a novel idea!
As for Lozon and Rankin, they go to the head of the class.
Oil companies would be unwise to rush in to where the U.S. Senate - at least half of it - doesn't fear to tread.
The Senate, in a 51-to-49 squeaker vote last week, approved allowing ExxonMobil Corp., BP plc, ConocoPhillips and other companies to explore for, drill and produce oil in Alaska's Arctic National Wildlife Refuge, or ANWR as it's called.
That's hardly a resounding mandate for oil development in a wilderness that has been off-limits to petroleum companies since 1980.
The Senate's provision, tacked on to a budget resolution so it wouldn't be filibustered, aims to open a portion of the 19-million-acre refuge. According to seismic surveys done in the area during the 1980s, there's a 50-50 chance that ANWR holds 6.3 billion barrels of oil.
It sounds like a lot of oil. But at the rate the U.S. burns the stuff, it amounts to just six months worth of that nation's demand, opponents say.
The Canadian government and almost half of Americans, judging by their elected representatives in the Senate, oppose endangering ANWR's ecosystem for that amount of oil.
The Arctic ecosystem includes the Porcupine caribou herd in Canada that uses the refuge as calving grounds, and the Gwich'in or "people of the caribou" aboriginals in both countries.
Even if the U.S. House and Senate reach a budget deal, something they failed to do last year, oil companies should still think twice.
Lawsuits are inevitable, especially in the litigious U.S. And environmental groups around the world will intensify an already well-organized campaign against drilling in ANWR.
ExxonMobil and other firms need to ask themselves: Is that much oil worth the risk to their corporate reputations, even at $56 US per barrel?
(Mark Lowey can be reached at mark@businessedge.ca)
