Oilsands wealth hugely underestimated....

More than $1.5 trillion in wealth....

The wealth in Canada's oilsands, even taking into account the recent plunge in world oil prices, is nearly $1.5 trillion, more than four times the $342 billion officially estimated by Statistics Canada, a Canadian think-tank argues in a report released today.

That works out to a $34,591 increase in the wealth of Canadians to $243,950 for every man, woman and child, according to the analysis by the Centre for the Study of Living Standards.

Last year, Statistics Canada valued the oilsands at $342.1 billion, or five per cent of Canada's total tangible wealth of $6.9 trillion, the centre said.

However, the federal agency's method of evaluating that wealth underestimates the quantity of oil the oilsands contain and the speed at which that wealth will be extracted, it said.

The reasons the agency underestimates the wealth in the oilsands is that it takes a restricted view of reserves, including only those that can be exploited now, Andrew Sharpe, chief economist at the centre and one of the authors of the report, said.

The official Statistics Canada estimate of the reserves, at 22 billion barrels, is "very small compared to those obtained using more appropriate definitions" resulting in an underestimation of their true value, it said. Further, the failure to take into account the projected growth of the industry significantly magnifies this underestimation.

More reasonable measures of the total oilsands reserves put them at 173 billion barrels, or eight times the StatsCan estimate, the centre said. And the rate at which that oil is projected to be extracted -- from 482 million barrels per year in 2007 to a peak of 1,350 million barrels in 2015, and at the 2007 price of $70 Cdn per barrel -- boosts the estimated present value of the oilsands to about $1.483 trillion, more than four times the official estimate of $342.1 billion.