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Doug Suttles, president and CEO of Encana Corp., addresses the company’s annual meeting in Calgary in 2014.

Jeff McIntosh/THE CANADIAN PRESS

Western Canada's conventional energy producers are looking to step out of the long shadow cast by the oil-sands sector to tout the economic and environmental benefits of light oil and natural gas development.

Led by Encana Corp. chief executive Doug Suttles, companies that are employing innovations in drilling and hydraulic fracturing insist they can boost investment, employment and exports while contributing to efforts in Canada and around the world to reduce emissions of greenhouse gases.

Mr. Suttles was joined in a conference call on Thursday by Chris Slubicki, CEO of the closely held Modern Resources Inc., and Regan Davis, head of STEP Energy Services Ltd., a company that does fracking. They pointed to the enormous potential of western Canadian fields that contain light oil and condensates, natural gas and natural-gas liquids such as propane and butane.

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"I think there had been this greater image that the future for the oil and gas sector in Canada was the oil sands, and that the shale revolution was largely a U.S. thing, and that the more conventional oil and gas was largely in decline," Mr. Suttles said in the call with The Globe and Mail.

The executives are mounting a lobbying campaign to convince provincial and federal governments of the Canadian sector's need for streamlined regulations and breaks on carbon pricing so it can remain competitive with the tight oil and shale gas producers in the United States.

The initiative also includes Tourmaline Oil Corp., Crescent Point Energy Corp. and ARC Resources Ltd.

Mr. Suttles said he has discussed the sector's role with Natural Resources Minister Jim Carr, who has embarked on a national dialogue aimed at finding broad agreement on Canada's long-term energy future.

They are also looking to stoke interest in a segment of the industry that, in large part, investors have shunned through the downturn. Shares of Canadian energy producers have slumped more than 20 per cent so far this year, under pressure from discouraging news.

Headwinds include a $30-billion sell-off by multinationals from the oil sands, mounting opposition to federally approved pipelines and the cancellation of a proposed liquefied natural gas project on the west coast.

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As a result, many investors have fled for the exits, said Eric Nuttall, manager of the Sprott Energy Fund in Toronto. Of 14 holdings in the fund, just two are based in Canada.

"The only play that U.S. investors are interested in investing in is the Montney [shale formation], so I don't think an educational campaign is really going to change the tone of foreign investors towards the plays that an Encana would want to hype," he said.

Nonetheless, the coalition of producers says there is potential for $7-billion to $10-billion a year in new investment in the most promising Canadian exploration regions, a significant boost for governments that can no longer count on the oil sands to generate tax revenues.

Canadian shale zones such as the Deep Basin in northwestern Alberta and the Montney are in many ways playing catchup to booming regions such as the Eagle Ford and Permian in Texas, which have drawn billions in new investment even as crude prices have languished around $50 (U.S.) a barrel and natural gas prices remain depressed.

In a positive sign for the Canadian industry, some 23 natural-gas producers recently signed a long-term deal with TransCanada Corp. to deliver western Canadian gas at discounted rates into the key markets in Ontario and the northeastern United States.

Mr. Suttles said about two-thirds of Encana's spending this year is tied to its U.S. holdings. However, the company currently has more drilling rigs operating in northeastern B.C., where he said the company is able to drill wells for less than $3.5-million (U.S.) each – much lower than what it costs in Texas.

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The companies are also promoting the environmental benefits of light oil and natural gas compared to the carbon-intensive oil sands. Modern Resources, which is backed by Calgary-based ARC Financial Corp. and Houston-based EnCap Investments LP, has eliminated fugitive emissions of methane at its sites, Mr. Slubicki said. Such emissions are a major concern for environmentalists.

Even so, groups that have campaigned against the oil sands are not prepared to endorse the tight oil/shale gas sector, particularly given its use of fracking, which activists fear will threaten water supplies.

"To address climate change, we need to get off fossil fuels, not invest in a different process to get more," said Dale Marshall, national program manager with Environmental Defence, a Toronto-based group. "Investing in fossil fuel infrastructure means higher GHGs for the country."

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