Finance committee  If you're looking at a fully upgraded barrel of synthetic crude, it's probably somewhere between $55 and $65 a barrel. The average on a conventional barrel is probably $40. The costs are going up, not down, because you're into enhanced recovery and those kinds of things, and remember that the dollar, in the midst of that, is a huge factor.

Finance committee  Half.

Finance committee  Well, that depends right now on where the royalty review settles out on a go-forward basis. I think that's the first big question. The second big question is what the climate change policies and the air quality changes in the land will be over the next little while. The third question is local steel prices and things like that.

Finance committee  Welcome back to Calgary, Mr. Chairman. It is nice not to have to appear before you six times this year. I look forward to one budget or two. Six certainly stretched our limits the last time we saw you. Mr. Chairman, we live in interesting times. Some may dispute whether this is a blessing or a curse, but there is no denying that the business environment for the oil and gas activity in this country has captured public attention as one of the most reported news stories of the year: high oil prices, low natural gas prices, a high dollar, low netbacks, high profits, low drilling, high costs, low labour availability, higher royalties, and lower corporate taxes.

Environment committee  I think it depends on which one you're talking about. Last week Shell announced a major new technology for its upgrading process, which I think has something like a 10% reduction on the heat use. That was a four- or five-year project. Some can happen fairly quickly; some are very long term.

Environment committee  With respect to captured storage, when you look at the Saskatchewan project, which includes EnCana and Weyburn, from initial thought to getting CO2 in the ground, it was probably five years.

Environment committee  No.

Environment committee  You need to look at this in two or three perspectives. To start with, are companies reducing their intensity on an annual basis? Yes, they are. We have been able to see significant changes on that. That's number one. Second, in the short term what do we see? We see continuing annual intensity improvement targets.

Environment committee  Certainly, and I will be brief. Short of a complete collapse in the Canadian economy or the purchase of billions of dollars of foreign credits, we cannot meet the Kyoto target numbers.

Environment committee  I have a couple of comments. First, recognizing that we are a very global industry, you are going to have to look at what that does to an investment dollar here in Canada versus other parts of the world that are big producers. Secondly, you have to look at the issue of caps in our sector versus other caps in other parts of the economy where the investment dollar is going to flow.

Environment committee  Clearly, when you look at the biggest challenge facing us, it's going to be on new technology development over the medium and long term, from a global perspective. Take Canada and just lump it in with China and everyone else. From a global perspective, if we don't find new technology that will in the short term manage the carbon dioxide, but in the long term reduce the absolute amounts going into the atmosphere, we're not going to make a difference over time.

Environment committee  I think it is something we have to look at. We've seen expansions of the use of depreciation, for example, into the renewable areas. We've supported the wind subsidies for the development of new— I think you have to be very careful. You need to tread very carefully and know why you're doing it and where you're doing it, but I think, sure, there are elements and cases where it will be appropriate.

Environment committee  Absolutely.

Environment committee  I think, Mr. Cullen, you would have different companies looking at different ways to do it. If the question is whether industry is prepared to deal with its share, then yes, I think industry is prepared to deal with its share.

Environment committee  Thanks very much, Mr. Godfrey. Let me answer the question in two ways. As you well know, in the government of Mr. Chrétien, a plan that included targets for the oil and gas industry was put forward, on the basis of which we said we were prepared to proceed. When Mr. Martin was Prime Minister, and Mr.