The current high level of oil prices will continue on for the foreseeable future because it is being driven by worldwide demand like never before, attendees to the Saskatchewan Oil and Gas Show were told in a keynote address on Wednesday.

Marvin Romanow, executive vice-president and Chief Financial Officer of Nexen Inc., presented the overview of the current and future state of the oil industry in his speech prior to the presentation of the inductees to the Saskatchewan Oil Industry Hall of Fame by the Oil Show's board of governors, along with the Saskatchewan Oilman of the Year. This took place at the noon luncheon Wednesday.

In explaining how demand continues to drive the oil prices high, and subsequently the price of gas charged to industry and consumers, Romanow said the situation is much different than during the oil boom of the early 80s, as demand is keeping current with production more so than at any time in the last 100 years, mostly due to industrial growth and progress in two of the world's most populous countries, China and India.

"The price of energy to consumers and to industry is reaching record levels. It's putting some pressure on industry and has disappointed consumers. Okay, maybe that's a bit of an understatement," said Romanow, pointing out that even with the higher cost of fuel, it comprises less of the average wage-earner's disposable income than it did in the early 1980s. At that time, energy costs took an average of 10 per cent of disposable income, which dropped to about four per cent in the 1990s; today, it's up to about six per cent.

The result, said Romanow, is that there has not been much reduction in demand even with higher fuel prices.

He noted when the price collapsed in the mid-80s, the price of oil slumped from $35 a barrel down to $10, and led "character-building years" for those who survived in the oil industry. A difference today from those days too is that far less oil is used today for electricity generation than in the 80s, and today 70 per cent of the products of a barrel of oil goes to transportation in various forms, including gasoline, oil, diesel, jet fuel, lubricating oil and so on.

"Any price disruption sends prices up. We no longer have supply shock absorber, and it's been growing in the last few years. The annual demand growth is 50 per cent higher than the previous 10 years. This is a pretty big deal," said Romanow. "That's not a little change, that's a big change."

The Nexen vice-president said the next big technology challenge for the oil industry are the heavy oilsands in Saskatchewan and Alberta. The Alberta oilsands have a huge reserve of oil that could last another 750 to 1,000 years at the current rate of production of one million barrels of oil a day.

"The oil sands can only supply 10 per cent of the world's incremental growth. We'll be hearing a lot more as we go forward," said Romanow, adding the other big challenge for the industry is the growing push for climate change and reducing the emission of greenhouse gases, especially carbon dioxide.

While Canada is much in the news for their production of CO2, Romanow pointed out that Canada only produces two to three per cent of the world's emissions of CO2.

Cutting those emissions to zero would make very little difference world-wide, but would have a large impact on the national economy, he said, adding, "We need to recognize we can be a leader in the technologies to sequester CO2, but our global footprint is pretty small."

He also said companies here still need to do whatever they can to reduce CO2 emissions, and noted Nexen Inc. has pledged to do so.

Following Romanow's speech, the board of governors presented the Hall of Fame inductees.

These included the late Les Cole, whose award was posthumously accepted by his wife Bernice and son Todd Cole. It was noted one of the earliest oil wells drilled in Saskatchewan was drilled behind his farm by Royalite, exposing him to the industry early on. He later established his own company, and was considered a "classic gentleman" in the industry.

Inductee Walter Dawson was noted for founding Computalog Gearhart in 1972. Like many oil pioneers, he was self-educated in the industry, and spent a total of 19 years as president and CEO of Computalog before it became a subsidiary of Weatherford. He was also involved with a drilling company that was bought up by Nabors Drilling, with several rigs in Canada and Australia.

Darwin Sawyer, a native of Macoun, began his career in the oil industry at the age of 20 for a tank company, installing and maintaining production equipment. He retired from the industry in 1999 and currently lives in Medicine Hat.

Selby Porter was recognized for being a major part of the growth of Ensign Drilling. With a degree in mechanical engineering, he became a drilling field engineer and authored several patents in oil well drilling technology. He became the vice-president and general manager of Ensign, and grew the company from 11 drilling rigs and 16 service rigs to 307 drilling rigs and 125 service rigs, working in 11 countries. He became a company director in 1994, and president in 1996, and retired in December 2006 as the president.

Ken Vollman was honoured for heading the National Energy Board in Calgary for over a decade, overseeing project proposals worth tens of billions of dollars. In total, he spent 33 years as Canada's energy regulator; one change he was involved with was moving the board to the heart of Canada's oil industry in Calgary. He served as vice-chair then chairman of the board, and was called a "visionary of the industry."

Weyburn's own Laurence Woodard was also inducted into the Hall of Fame, starting his career with Central Del Rio in 1959, the predecessor of today's EnCana, working there for over 40 years.

He moved to Williston, N.D., in 1996, and then moved back to Weyburn, starting up Woodard Oil Services, a company which was sold to Petrowell Oil Services. Fellow Weyburn oilman Pierre Mondor was quoted as saying, "I don't know anybody Laurence hasn't treated fairly. That's what he does."

Woodard was involved in other pursuits, such as winning the Elks curling championship three times, and being inducted into the Saskatchewan Sports Hall of Fame for being a part of the 1996 Senior Beavers national championship team. With the Oil Show itself, he serves on the board and has been chairman twice.