Forget the oilsands. Tough though it is to look beyond the $100- billion the world is expected to pour into Alberta’s oilsands, the icky sticky bitumen is not the only game in town. The oilpatch’s major players are also paying close attention to alternative energy: biodiesels, solar power and, of course, wind. Alberta already has more wind power capability than Ontario or Quebec.

Not bad for Canada’s most adamant “Kyoto sucks” province.

Investment in renewable energy projects around the globe is pegged at about $20-billion a year right now. The U.K.’s Henderson Global Investors predicts that amount could quintuple to $100- billion by 2015. By its lonesome, China — the energy-hungry giant everyone in the energy business is keeping a close eye on these days — expects to invest US$188-billion in alternative energy sources over the decade to come.

Start talking in those numbers and some of the oilpatch’s most- seasoned dealmakers get very excited. Law firms see a whole new frontier of revenue on the horizon.

“The saying in this business is follow the money,” says Brock Gibson, a senior corporate partner with Blake, Cassels & Graydon in Calgary. “The billions of dollars that people in the energy industry have earmarked for alternative energy initiatives means we are looking to expand our focus on all aspects of alternative energy work.

“We anticipate there will be significant investment by the energy industry into alternative fuels and energy sources over the next 10 years, and we expect that investments will requite a lot of legal structuring and innovation.”

Not all of the investment — and pay-off — is projected. Just as the oilpatch’s major players shifted away from the low-hanging fruit of the ageing Western Canadian Sedimentary Basin into unconventional plays such as the oilsands before the oilsands became the darling of moneyed investors, the savvy ones occasionally at least consider a future sans oil.

“Many of the major oil and gas companies have alternative energy projects or plans to invest in a variety of alternative energy techniques as well as carbon fuels,” notes Mr. Gibson.

“They’re doing it to be more environmentally astute and to be good corporate citizens,” Mr. Gibson said. “They’re doing it because the whole world wants to pay less for its oil and gas, and they’re exploring all options. They’re doing that partly because it is a synergistic industry for them. “Many of them are in the energy business: They do oilsands, they do cogeneration, they do electricity.”

BP is manufacturing solar-power cells, venturing into biodiesels and buying up wind turbines. Suncor has an ethanol plant in Sarnia, Ont. Shell’s investing in solar. EnCana has funded Canada’s first free-stream tidal power project.

Good PR? For sure. But mostly, they’re doing it because it may be an opportunity to make money. Shell’s interest in solar power is closely aligned to the $18.6-billion in revenue the solar power industry is forecast to generate by 2010. General Electric is making US$1.2-billion a year off the wind turbines it got in the Enron fire sale.

“As a whole, alternative energy is an industry, which in the long, long term, may displace fossils fuels as our preferred energy source,” says Mr. Gibson.

Wind doesn’t do it for Robert Booth, a partner with the Calgary office of Bennett Jones. Bio fuels don’t turn his crank either. Solar energy? Bah humbug. His new frontier is “the coal renaissance.”

Premier Ralph Klein got hammered for lauding a return to coal not that long ago and Ontario, Canada’s largest consumer of energy, plans to be coal free by 2007. Make that 2009 — 2007 was not going to happen. But as half of North America’s electricity continues to come from coal, and industry players are eyeing the continent’s massive coal bed methane (CMB) deposits, Mr. Booth expects Ontario to revisit its coal-free future and to refit and refurbish its coal generators instead. “Coal, as CMB and in other forms, covers North American energy security in a dramatic way,” says Mr. Booth. “When you look at the big picture from 100,000 feet and see the huge multiple of years of coal resource that North America has — and Alberta is really at the bull’s eye of that when compared even to the oilsands — you kind of scratch your head and wonder why the big brain trusts south of the 49th parallel haven’t been pushing coal harder for a lot longer.”

Of course, you couldn’t get those brain trusts to look at the oilsands five, let alone 10 years ago either. (Maybe they just really like hanging out in the desert?) But the same insatiable hunger for energy coupled with better technology and rising oil prices that had U.S. Vice-President Dick Cheney touring the oilsands is stoking interest in coal.

The legal ramifications of a coal renaissance are immense.

Never mind the environmental and regulatory issues — in many cases, there are basic title issues. “In Canada, coal bed methane was not economical, so nobody cared who had title to it,” says Mr. Booth. “Now we have conflict between the gas rights owner and the coal rights owner.”

Royalty and fiscal regimes around the new coal are fuzzy, too.

Ironically, dirty old coal is also emerging as a key ingredient in at least one alternative energy scheme. In the integrated gasification combined cycle (IGCC), plants transform coal into a synthetic gas. According to the enthusiasts at the Canadian Clean Power Coalition (comprised of companies such as ATCO Power, BEPC, EPCOR, SPRI, Luscar Ltd., SaskPower, TransAlta and Nova Scotia Power, the CCPC is unabashedly pro-coal), these plants can be “cleaner than the best natural gas facility operating today.”

Even less-biased sources agree IGCC plants are 10% more efficient than conventional plants, consume 40% less water, produce 50% less waste and burn almost as cleanly as natural gas plants.

“The new frontier to me is the old frontier,” says Mr. Booth. “I don’t think we have to go to fuel cells or nuclear energy or growing wheatlands to produce fuel when we have this other resource under our feet.”

(Copyright National Post 2006)