OTTAWA -- Canada is turning into "America's gas tank" by ramping up oil and gas development at a heavy environmental price to feed rapacious U.S. demand for fossil fuels, a report by two environmental groups charges.

In the past decade, Canadian oil production has increased by nearly 50 per cent, and natural-gas production by more than two-thirds to meet an ever-increasing appetite from the United States for petroleum, the report says.

More than 50 per cent of Canadian oil and gas production is exported to the U.S. market, the report by the Sierra Club of Canada and the Natural Resources Defence Council says.

Canada rivals Saudi Arabia and other big international producers as the largest foreign oil supplier to the United States, and has become its largest foreign provider of natural gas.

"The United States is the world's biggest fossil-fuel junkie, and Canada provides the largest foreign fix," NRDC researcher Matt Price says.

The result, the groups charge, is accelerated environmental degradation, air pollution and loss of habitat for animals, birds and fish, as oil companies build paths, roads, wells and pipelines through Canada's wilderness.

"The oil and gas industry has cut millions of kilometres of exploration lines, roads and pipelines through the Boreal [forest], degrading and destroying wildlife habitat," the report says.

It says there are no signs of development slowing.

"Analysts predict another 200,000 wells could be drilled in Alberta, British Columbia, Yukon and the Northwest Territories over the next decade, each with associated . . . roads [and] pipelines."

The report says Canada's readily available oil and gas reserves are fuelling a jump in the amount of greenhouse gases -- believed to cause global warming -- emitted by North American industry and consumers, and are better "left underground."

It calls on the Canadian government to boost incentives for clean energy, such as wind power, instead of allowing the rapid development of petroleum reserves.

"Three European countries -- Germany, Denmark and Spain -- have installed wind turbines that produce sufficient energy to meet the domestic needs of more than four million of their people."

But the Canadian Association of Petroleum Producers said the report ignores the watchdog role that Ottawa and provincial governments play in supervising oil and gas development.

CAPP president Pierre Alvarez said provinces and territories allow oil and gas development because they are confident it can create jobs without sacrificing the environment.

"Ask the people of St. John's, of northern British Columbia, of Saskatchewan and in the Mackenzie Delta about their views, and they will say very clearly these jobs, these opportunities are the only ones available to them.

" And they believe . . . they are able to accomplish both the goals of development and preserving wildlife," Mr. Alvarez said.