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Why invest in Quebec’s Petroleum

Quebec already has the infrastructure to process more hydrocarbons than it uses for its own internal consumption. Nevertheless, it is only taking its first steps to develop the natural wealth of its petroleum and gas. Since consumption of petroleum and gas exceed the consumption of electricity, investing in the development of hydrocarbons might prove a wise choice for today as well as tomorrow.

Energy Consumption

Graph of Energy Use in Quebec:
Half (51%) of Quebec’s energy demands concern hydrocarbons: 38% petroleum and 13% natural gas. The portion occupied by electricity counts for 38% of the total energy demand. Of the remainder, 11% goes to biomass (10.4%) and 1% to coal.

Thus, contrary to popular belief, Quebec’s main energy needs are not met by electricity, but by hydrocarbons. For a good many decades yet, our fossil fuel needs are likely to remain significant. Renewable energies, in spite of accelerated developments, will not be capable of taking up the shortfall for a considerable time, since their production is increasing less rapidly than our energy needs. We will therefore have to count on hydrocarbons for a good while to meet the demand.

At the present time, Quebec imports every year practically all the hydrocarbons needed for its economy. The full annual cost of this energy reaches nearly $12 billion. About 158 million barrels of crude oil and 200 billion cubic feet of natural gas (coming from outside the province) are used every year in Quebec.

The production of hydrocarbons from local resources takes on a great importance for Quebec if it wishes to attain certain autonomy in the area of energy. The growing needs of developing countries will exert a growing pressure on global demand. Since the North American production of hydrocarbons has already started to decline, black gold could end up going for an exhorbitant price.

The geoscience community is categorical about it: Quebec’s petroleum and gas potential is undeniable and exploration of these resources should be a national priority. Increasing our production of hydrocarbons will secure our supplies and have a positive effect on our trade balance.

Economic Interest

An Untapped Potential

Every year, literally hundreds of immense oil tankers, coming from oil-producing countries, feed Quebec’s refining industry with crude oil. Capable of production at competitive prices and according to existing standards, Quebec’s refiners occupy a favoured position with respect to neighbouring markets.

Nevertheless, the lack of the raw material hinders Quebec’s refineries to produce at their maximum rate. It’s essential to feed that production capacity with local resources and thus contribute to the improvement of our balance of trade.

Catching Up, Making Our Processing More Profitable

Quebec’s position on the world economic stage depends in good part on its competitive advantage with respect to available energy resources. The societies that are the furthest ahead are the ones that use a combination of energy sources, at once diversified, dependable and cheap.

While our hydrocarbon needs are presently met by imports, our refining capacities exceed our needs. We import petroleum, then export petroleum products.

Quebec’s refining industry has all the know-how needed for processing hydrocarbons. Moreover, it has already made the investments required to increase its production. In 2003 alone, the investments in infrastructure jumped by 34% to reach $349.4 million. Extracting hydrocarbons from Quebec’s subsoil will increase the export capacity of this industry which is already set to respond to increased demand.

The Gaspé compared with Alberta

7,5 M
3,2 M
Surface Area
1.7 M km2
0.7 M km2
Proven Oil Reserves
1,0 BCF
  Natural Gas
62 Gb
261 TCF
Fees and royalties in 2003
400 K$
7,7 G$
Wells drilled in 2003
17 873
Investments in exploration in 2003 upstream
5 M$
19,3 G$
Jobs in upstream sector
100 (e)
275 000
Province’s debt as of March 31, 2005
98,0 G$ (e)
-9,7 G$ (e)