Issue link: http://resourceworld.uberflip.com/i/783264
80 www.resourceworld.com F E B R U A R Y / M A R C H 2 0 1 7 I think, we're probably going to have to wait a little bit longer until the demand growth globally, catches up to where we are on the supply side. RW: Do you think the growth of electric car sales will have any impact on gasoline demand? BP: I don't think it's going to be a huge impact. Definitely it's a potential change in energy supply and it could, in the long- term, have an impact on gasoline. In the short-term over the next say, four or five years, I don't think it's going to be a big impact. There is also going to be a higher demand on power generation to satisfy that new technology. We're not seeing a lot of growth in hydro production anywhere in North America, so it's probably going to come from natural gas and wind. There's potential for nuclear where coal has been more declining. RW: Will the closing of coal-fired power plants and the switching to natural gas increase natural gas demand and prices? BP: We've been seeing a good growth rate from the power generation sector for natural gas, so demand is popu - lation-weighted but can be quite variable depending on weather. Power generation demand is more stable and has been grow- ing as a result of less new development in the coal area, nuclear and hydro. A lot of that demand growth has been coming from natural gas energy production due to the reduction of the use of coal and more coal plant closures. That lost supply is going to have to be filled mostly by natural gas given it's reliable and can also be switched on and off (unlike) other supplies that are less reliable like wind, natural gas. RW: In the past few years, about 42 Alberta oil sands projects have been can - celled that were worth about US $9.4 billion. What does this say about the oil sands sector? BP: The oils sands are a great source of stable production, but it is not a low cost source. I think what those cutbacks reflect is that as other countries around the world, with lower cost supply, like many of the OPEC nations, have grown their production and that has reduced prices and made new oil sands projects not really economic. It has certainly reduced investor interest and then forced the cancellation of some of those projects that might have come on – so you're still seeing some additional phases of existing projects just moving into construction but generally speaking, you've seen more of an attitude from pro - ducers (that they) were willing to complete the projects that were under already con- struction, but they're going to hold off on new projects until prices are higher. Deep offshore development is another area that's cutback significantly because of the other lower price environments and that makes perfect sense. If we have more than enough production that prices go down, those higher cost projects should probably be put on the shelf until they're