In Gordon Kelly's book -  The Oil Sands: Canada’s Path to Clean Energy?, he argues that the oil sands are not the environmental disaster many suggest, and that the oil industry is dealing with the issues. He suggests that we face the fact that we need to focus our attention on developing alternative energy - hydrogen for one. Kelly would urge Albertans to spend Heritage money for Alberta to become the world leader in the development of hydrogen as an alternative to oil.

Alberta will continue to have lots of oil, but it should also be able to supply alternative energy and power. It is time for Alberta to invest in research across Canada in order to develop the clean transportation fuels needed for the future. Electricity, batteries and hydrogen power will be the key to energy success by 2040. Alberta should focus its efforts in these areas, along with the associated technology. Canada is the largest per capita user of hydrogen in the world, so we should aim to become leaders in that technology. It will not be easy, but Canada has the capability to become the leader in these sources if we start now, work together and are committed. Above all, it requires leadership. The objective is to get enough infrastructure and technology into place as soon as possible to create, test and improve the power generation equipment needed to replace oil. The world is in a race to see whether oil runs out first or whether the new power sources make it obsolete. Alberta should aim to be in the enviable position of being able to supply both oil and alternative sources of energy. Big Oil says there are oil supplies for 40 years but the latest International Energy Agency (IEA) report says the world will be 15 Mb/d (15 million barrels a day) short of oil by 2015 unless new oil fields are found. That is 2.4 Mm3/d (2.4 million m3 a day) for those who think in metric terms. This prediction is a serious shortfall that is almost 17% of demand. A recent survey of the top 800 fields in the world shows volumes are declining at rates faster than expected. No one knows for sure when Peak Oil might happen but this book suggests it will likely first occur between 2015 and 2020. It will not be caused by a shortage of oil to be found but by an industry that has too many “cooks” with different agendas. The industry could fail to develop enough supplies to meet rising demand. Low prices in 2008 and 2009 will have an impact. Between restrictions on drilling, NIMBYs, environmental controls and National Oil Companies (NOCs) owning the best prospects there could be delays that will prevent enough new oil supplies being brought on stream to meet demand. Oil will still continue to flow when Peak Oil hits. There just won’t be enough to meet the demand. Half of the world’s oil will still be available, but there will be a shortage until new supplies can be brought on production. The first Peak Oil crisis will likely be short but could be followed by more serious crises, depending on whether the world is willing to let the oil industry find and produce more oil in the following years. This book suggests that Peak Oil is closer than people in the oil industry are willing to concede. Big Oil assures us that this will not happen until 2040 or beyond. (What else can they say?) The reality is that the world is consuming some 31 Bb/yr (31 billion barrels of oil annually or 1,000 barrels per second) but the oil industry has not been finding replacement volumes of that magnitude for decades. The world has been relying on about 25 declining supergiant oil fields for much of its supply.

Gordon Kelly argues that it is time we put together a realistic plan for energy development and that Albertans step up to be world leaders in clean energy within and beyond the oil sands.

GORDON KELLY has a Masters in Business from Harvard Business School and has worked as a consultant in the oil industry in more than 24 countries.