Chris Varcoe <a href=www.canada.com>Calgary Herald Wednesday, April 02, 2003

After a decade of booming growth in Canadian energy exports to the United States, the era of sending additional oil and gas supplies south is likely ending, says a new report by the C.D. Howe Institute.

In a study released Tuesday, the Toronto-based think-tank said the energy industry will face a new challenge of "sustaining current (production) levels, rather than adding appreciably to them."

"A more assertive U.S. administration will challenge Canadian understanding of the significance of continental energy integration," said the report, written by former University of B.C. professor Paul Bradley and economist Campbell Watkins.

"The rapid growth in Canadian oil and gas exports is probably over; indeed, growing strains on capacity foreshadow higher prices, especially for electricity."

Since the deregulation of Canada's energy business in the 1980s, the

$50-billion-a year industry has expanded rapidly due to a burgeoning appetite south of the border for more oil, natural gas and electricity.

About 60 per cent of all crude oil pumped in Canada now heads south, while more than half of the natural gas production is exported to the United States.

Canada is now the largest supplier of energy to the U.S., topping Saudi Arabia, Venezuela and Mexico.

One area of future growth for Canada will come from the Alberta oilsands, the report contends. While conventional oil reserves in Canada would last about nine years without future additions -- similar to U.S. levels -- the 176 billion barrels of oilsands reserve boost that figure to almost 80 years.

Yet, huge investment dollars, along with long lead times, are required to build new projects and produce additional synthetic oil from the Athabasca oilsands, the report notes.

"Remaining steps toward freeing markets will be more contentious as consumers face higher commodity prices and perhaps sacrifice some direct sharing of the lower costs that are attributable to Canada's natural endowments," it states.

Industry insiders disagree, saying there will be strong growth of oil and gas exports as petroleum output increases from Canada's East Coast, the North and in the oilsands.

The National Energy Board predicts oil production will rise to 3.1 million barrels per day by around 2005, up from about two million barrels in 1999.

The Canadian Association of Petroleum Producers expects overall oil output to hit 3.5 million barrels a day by 2010, a 46 per cent jump from the 2.4 million barrels currently pumped.

Gas production is expected to increase by two to four per cent annually, according to CAPP.

"It's not the doubling in the gas industry we saw in the 1990s, but it's still very strong growth. But it's on the oil side, not the gas side," said CAPP vice-president Greg Stringham.

The report's authors also say terrorist attacks in the U.S. have increased concerns about security of energy supply in the United States, boosting the momentum for Washington to reduce its reliance on Middle East oil.

"More emphasis on energy security by the U.S. provides a platform that could enable Canada to better press its interest in securing favourable access to the U.S. market and in sharing benefits and costs of further market integration," the 33-page study said.

"Energy is one sector where Canada can negotiate from a position of strength."

cvarcoe@theherald.canwest.com

<a href=quote.bloomberg.com>Bloomberg.com By Stephen Voss

London, April 2 (Bloomberg) -- Crude oil fell as much as 5 percent in London on expectations a push by coalition troops toward Baghdad is bringing closer the end of a war that's halted oil exports from Iraq, the Middle East's third-biggest producer.

U.S. soldiers have taken Karbala, southwest of Baghdad, and moved to within 25 miles (40 kilometers) of the Iraqi capital, Cable News Network reported, citing correspondents. Forecasts of an increase in U.S. oil stockpiles and the possibility that shut- down Nigerian fields may soon reopen, also weighed on prices.

``It looks as if the assault has started on Baghdad, so inevitably it's just a question of time'' before the war ends and oil starts pumping again, said Rob Laughlin, a director of energy broker GNI Ltd. in London. Iraq in February produced almost 2.5 million barrels a day, or 3 percent of the world's oil.

Brent crude oil for May settlement fell as much as $1.31 to $25.05 a barrel on London's International Petroleum Exchange, the biggest drop in six days. It traded 86 cents down at 2:15 p.m. Prices have slid 21 percent in the past month.

U.S. Marines seized a bridge over the Tigris river in central Iraq, the last needed for an assault on Baghdad, and took control of the main Highway 6 leading from Kut north to the capital, Reuters reported, citing an unidentified Marine officer.

A decisive engagement'' is beginning with the Republican Guard, Air Marshal Brian Burridge, the commander of U.K. forces in the Persian Gulf, said in an interview with the British Broadcasting Corp. Burridge said he wouldn't want to give the impression that within a day or two this is going to be over.''

In New York, crude oil for May delivery was down $1.02 at $28.76 a barrel in electronic trading on the New York Mercantile Exchange. New York futures dropped below the moving average for the past 200 days, helping reinforce the slide, brokers said.

Jittery

``Now we're getting reports that the war is going more in the U.S.'s favor in the advance toward Baghdad, and that triggers a bout of selling in this jittery market,'' said Keith Morris, oil equity analyst at BNP Paribas in London.

Price swings have been common as traders use war reports as reasons for buying or selling, he said. ``One day the oil market thinks the war will last forever, and then it's just a few days.''

In Nigeria, international oil companies have halted production of about 800,000 barrels a day in the past two weeks, or more than a third of the country's output, because of fighting between government troops and ethnic Ijaw militants before presidential elections on April 19.

``The general impression is that this is all orchestrated ahead of the elections,'' said BNP Paribas's Morris.

No Nigerian Strike

Brent crude fell 82 cents yesterday after the Nigerian Labour Congress, the country's biggest labor federation, called off a planned three-day strike over pay, easing concern the country's exports would be cut further.

``With Nigeria, there are rumblings that we may see more exports starting next week,'' GNI's Laughlin said.

The U.S. Department of Energy is expected to report today that U.S. crude oil inventories rose by about 2.15 million barrels last week from 273.9 million barrels, according to the average estimates of eight analysts surveyed by Bloomberg. The weekly report is due at 10:30 a.m. New York time.

The survey also predicted an increase in U.S. distillate supplies, although analysts were split on whether gasoline inventories rose or fell.

Venezuelan Gasoline

Venezuela's state oil company said it resumed gasoline exports, four months after an oil strike shut down shipments. A Petroleos de Venezuela SA spokesman said the first shipment of leaded gasoline will leave later today from the Paraguana refinery complex for the U.S. East Coast, where distributors are busy building up supplies before the U.S. summer driving season.

The state news agency said 360,000 barrels will be shipped. Exports won't be affected by the shutdown yesterday of a gasoline- producing unit at Venezuela's El Palito refinery, the spokesman said.

Gasoline futures for May delivery were down 2.52 cents, or 2.8 percent, at 88.9 cents a gallon on the New York exchange. Last Updated: April 2, 2003 08:23 EST

Press Release Source: InvestorCanada.com

Today on InvestorCanada.com... A potential oil crisis in America? Wednesday April 2, 7:32 am ET

TORONTO, April 2 /PRNewswire/ - Oil production in Venezuela is only about 35% of its normal level, Saudi Arabia is maxed out, and demand for oil is poised to increase as the driving season kicks into high gear; all these factors could contribute to an oil crisis in America in the short term according to Bill Wood, President of Sovereign Chief Ventures.

On today's edition of www.InvestorCanada.com host Donna Guzik speaks to Wood about the state of the oil market. Wood says we can't rely on OPEC to produce enough oil to cover any shortfalls. He says, "Even though OPEC has promised that they would, we also know that presently, they are producing at max. The question is if our demand gets much higher, who's going to supply the difference?"

InvestorCanada.com offers daily, independent in-depth interviews with financial newsmakers and leading business thinkers to provide investors with the perspective they need to make informed financial decisions. Interviews can be heard on real audio format, with complete transcripts available. Sign up for the free subscription service that offers 8 daily market updates, and a daily newsletter. InvestorCanada.com is a division of Canada NewsWire.

The Miami Herald Posted on Wed, Apr. 02, 2003 BY MARIKA LYNCH Knight Ridder Newspapers

MIAMI - (KRT) - As bombs drop around journalists in Iraq, the following statistic may be of little comfort: 19 journalists died last year on the job, the lowest number since the Committee to Protect Journalists began counting in 1985.

The group, which issues its annual report on press attacks this week, believes a brief respite in global conflicts was the main cause for the decrease.

Most reporters were targeted directly for their work, such as Daniel Pearl, The Wall Street Journal reporter kidnapped in Pakistan, accused by his captors of being an Israeli spy and later beheaded. His death made newsrooms reevaluate safety, and send reporters to more training, the report says.

Reporters also began to see themselves differently in hostile environments, where they increasingly understand that they may not always be perceived as neutral observers, said Joel Simon, CPJ's acting director.

As global politics changed after the Sept. 11, 2001, terrorist attacks, so did the threats to journalists, the group said. In Israel and Russia, the governments used the cover of national security'' to keep reporters from covering stories. Also, leaders in Eritrea, Russia and Zimbabwe have in instances labeled journalists critical of the regimes as terrorists,'' the group said.

One of the greatest threats in 2002 was prison time. Over the past two years, the number of jailed journalists rose 68 percent, to include 136 people. China was the world's worst offender, with 39 behind bars, trailed by Eritrea and Nepal. But using the law to attack journalists is also a potent force in Panama, where nearly half of the media's workforce is under criminal libel or slander charges.

In the Americas, the roughest places for journalists continued to be Cuba and Colombia.

Independent Cuban journalists continued to be harassed and jailed, and the country's most important independent journalists association was forced to suspend classes after its offices were blocked by the government. Cubans passed around Encuentro de la Cultura Cubana, an increasingly popular but banned quarterly magazine produced by exiles in Spain, even though the government has branded it a ``political operation of the U.S. government.''

In Colombia, where reporters are harassed by both leftist guerrillas and right-wing paramilitaries, the violence inhibited reporters from providing the analysis and context needed to characterize the changing war, the committee found. Three journalists died there in 2002 alone.

In Venezuela, as the country grew more deeply divided after a brief, failed coup to oust President Hugo Chavez and an extended general strike, the media played a more activist role. In fact, the committee found that the ``press abandoned any show of neutrality and became a full-fledged political opposition.''

That ``put a lot of journalists in the middle of the battle, and made it risky for journalists and press freedom,'' said Carlos Lauria, the Americas program coordinator for CPJ.

The report is available on the group's Internet site, www.cpj.org.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, April 02, 2003 By: Robert Rudnicki

Business sector leaders have again criticized the Confederation of Trade Unions' (CTV) call for 30% pay rises, stressing that in the current economic environment preserving jobs was significantly more important than looking for pay increases.

Industrial Confederation (Conindustria) president Lope Mendoza pointed to the fact that unemployment in the industrial sector currently stands at around 16%, and warned that this figure may increase over the remainder of this year.

Mendoza warned against heaping any additional pressures on employers' shoulders, as well as on the government, which due to the opposition work stoppage is also short on funds needed for any possible salary hike. Venezuelan Federation of Chambers of Commerce & Industry (Fedecamaras) vice president Albis Munoz echoed the sentiment.