Abstract This paper was presented under the "Energy Options" theme during the Plenary Session at the 29tb Annual Technical Meeting of The Petroleum Society of CIM, Calgary, Alberta, June 14. Introduction THE National Energy Board is in the midst of a bearing into the supply and demand for oil in Canada, and various related matters, and we will hold a similar enquiry on natural gas supply and demand this fall. A number of matters I will touch on will be the subject of industry and public discussion through the hearing process. Once the hearings are completed, the Board will be in a position to become more specific in its views in these areas. In the meantime, it may be useful for us to consider an overview of certain aspects of the Canadian energy situation. In recent years, perceptions of the energy situation by industry, the public and government have changed to adapt to the reality that the days of low-cost energy are behind us. All sectors of the economy are now in the process of modifying past practices to bring themselves into line with that reality. The overriding priority in energy at this time is to ensure the availability of an adequate energy supply to meet the needs of a healthy and vigorous economy and society, in order to have an acceptable quality of life in Canada. This includes planning to meet the possibility of an eventual constraint on world oil supplies, which could occur in the mid or late 1980's. This supply constraint could be either physical or political and could cause economic upheaval if energy shortages occur or if world oil prices increase too rapidly. Accordingly, the federal government has set a goal of achieving the highest possible degree of self-reliance in energy. To meet this self-reliance goal, a whole series of energy policies have been formulated. It is difficult to single out a particular policy as having priority over other government measures, because it is the net effect of the entire set of policies that is intended to allow Canada to meet its self-reliance target. However, increased emphasis has been given to some policy areas and it is this shift in emphasis I will try to outline here. Increased Reliance On Oil Imports A major area of federal government concern is Canada's growing net imports of oil and oil products. In 1975, Canada was self-sufficient in the sense that we exported more oil than we imported. Today, net imports are about 300,000 barrels a day. By 1985, net imports may grow to much higher levels unless action continues to be taken to reduce the rate of growth of oil demand and to increase the level of effective domestic supply. If net oil imports were to reach extremely high levels, this could create difficulties in Canada's balance-of-payments situation, and could be most detrimental to living standards and general economic activity throughout the country.
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