CALGARY - A new report released by an energy consulting group in the United States suggests the Canadian government will have a tough time trying to balance environmental responsibility with the energy security increased oilsands production can provide.
Provincial and federal politicians say they're fully aware of the concerns, but will keep trying to persuade the world that Alberta is doing all it can to make the oilsands environmentally friendly.

"One can only achieve environmental progress if you have economic progress. Frankly, I think as a country we've done a pretty exceptional job in striking that balance," said Environment Minister Jim Prentice while attending an event in Calgary Tuesday.

"There's always room for improvement and we'll continue to do that."

The IHS Cambridge Energy Research Associates (CERA) report says technological advances in the oilsands have made Canada the world's second largest holder of recoverable oil reserves after Saudi Arabia.

The report said the oilsands have moved from the fringe to the "centre of energy supply".

The industry produces 1.3 million barrels of oil a day, up from 600,000 a day in 2000.

As a result, the report said that Canada has become the biggest foreign oil supplier to the United States, accounting for 19 per cent of imports in 2008.

The study acknowledges total greenhouse gas emissions from oilsands - from extraction and processing through combustion of its refined products - can be approximately 5 to 15 per cent higher than conventional crude oil processed in the United States.

But the report said sometimes emissions from the industry are on par with conventional oil processing.

"We aspire to be on the cutting edge in terms of being environmentally responsible as producers of energy and we'll continue to do that," said Prentice. "In particular here in Alberta with some of the technological innovations that are coming - carbon capture and others - Canada will continue to lead the way."

The Alberta government has been trying to convince federal officials in Washington, D.C., that oil produced from the oilsands is not necessarily creating more pollution than conventional reserves. Alberta Environment Minister Rob Renner was pleased the CERA report took into account the entire life cycle of the emissions.

"We don't come up significantly different than a lot of the other sources of imports that are going into the U.S.," he explained.

The report comes as Greenpeace failed to force Norwegian energy-giant StatoilHydro out of Alberta's oilsands.

The environmental group brought a motion before Statoil's annual general meeting Tuesday in Norway for the corporation to withdraw from it's Alberta project.

Statoil bought into Alberta's oilsands in 2007 and has said it plans to develop an area that contains an estimated 2.2 billion barrels of tar-like bitumen.

The company, which is largely owned by the Norwegian government, maintains its Alberta oilsands project is environmentally sound.

The move by Greenpeace shows just how sensitive the world has become about environmental concerns, including water quality, in areas such as the oilsands.

"The oilsands happens to be located at the headwaters of the largest intact aquatic ecosystem features on the continent," said Robert Sandford, chairman of Canadian Partnership Initiatives, United Nations Water for Life Decade. "Public sentiment about what's happening here indicates just how serious people are taking water issues on a global basis."

Sandford, attending a Conference Board of Canada water conference in Calgary, said there will be more discussion on the issue because it has become part of public consciousness.

"You can tell that has happened when James Bond is talking about in his latest movie (Quantum of Solace)," he added. "The villains are not talking about capturing or stealing gold or diamonds - they're talking about controlling water markets and people see this as a serious and credible issue."