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Canadian Oil Sands
Old 02-09-2006, 01:56 PM   #1
 
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Canadian Oil Sands

Hopefully the link works?

http://www.growley.com/war/can-oil.html.

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Re: Canadian Oil Sands
Old 02-09-2006, 03:19 PM   #2
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Re: Canadian Oil Sands

Lots of people know about the Alberta tar sands. I have a brother in Edmonton who works on them occasionally. From an economic ans strategic perspective they most importantly represent a limit on what other oil producers can do. It is a while back but understand the cost of recovering crude is about $40 a barrel. Pretty high since its more like 25 or 50 cents in Saudi. But still it is an absolute limit when oil is up over $60 a barrel. There are some other issues like more limited production in winter months and there are envirenmental costs as there is more impact than from pumping oil.

Another possibility is that there is oil and nautural gas in the Canadian Artic. Its also cold and remote but if enough is found the Canadian companies will probably find a way to extract it with as little envirenmental impact as possible. And we have nuclear (not endless supplies of unranium, either). So energy diversity is important. And renewable energy is still a good idea. We will not run out of energy but it will get more expensive and eventually even Americans will learn to conserve.
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Re: Canadian Oil Sands
Old 02-11-2006, 07:04 PM   #3
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Re: Canadian Oil Sands

Watched a congressional presentation the other day on C-SPAN by Roscoe Barlett of Maryland about Hubbards Peak (do a google search for more info) and he gave a bunch of data and statistics. A few I remembered, global oil consumption is 84 million barrels a day, tar sand oil production is currently 1 million barrels per day. At best scaling up they might be able to produce 2-3 millions barrels a day in ten years or so. Every little bit helps but the canadian tar sands are not a viable short term option.
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Re: Canadian Oil Sands
Old 02-11-2006, 07:45 PM   #4
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Re: Canadian Oil Sands

Agreed the oil sands are not going to save the day, but every little bit helps. If consumption is 84 million barrels per day, need to replace ~3-4% of that each year just to stay even.

As someone said in another thread, a US gas tax like that in Europe would do way more to reduce the huge US trade deficit than any other single thing (and help take care of the budget deficit too). Most of the deficit is due to energy imports. It has little to do with other imports.
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Re: Canadian Oil Sands
Old 02-11-2006, 08:57 PM   #5
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Re: Canadian Oil Sands

I dislike taxes as much as the next guy but I did suggest that a gas tax would be beneficial to:

- reduce oil imports and the trade deficit
- reduce pollution
- encourage energy efficient vehicles
- reduce CO2 emissions and global warming
- encourage development of other energy sources
- reduce urban sprawl and encourage livable cities

These are very old statistics (to lazy to look up current values) but the numbers that I have show that Canada and the US are the two largest energy consumers per capita by a very large margin (values are in million Btus per capita):*

US:* 340
Canada:* 370

Values from Scandinavia show that you can have a high standard of living on much less energy even in cold climates:

Norway:* 179
Sweden:* 157
Finland:* 145

Other industrialized countries:

Germany:* 193
Japan:* 111
Britain:* 141
The Netherlands:* 171
France:* 118

Also note that Norway and Britain are oil exporters and they still impose a hefty gas tax on consumers.

We seem to think that cheap gasoline is as basic as life, liberty and the pursuit of happiness.* I suspect that we will learn otherwise in the future.

MB



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Re: Canadian Oil Sands
Old 02-11-2006, 09:24 PM   #6
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Re: Canadian Oil Sands

Yes, unfortunately, I think America will learn the hard way. People think cheap energy prices are a right rather than a priviledge.
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Re: Canadian Oil Sands
Old 02-11-2006, 10:07 PM   #7
 
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Re: Canadian Oil Sands

The consumprion in NA is a factor of the much larger distances we drive plus the weather extremes we live with.

Saying that, Europe does much more to improve conservation, however I think Americans would have trouble dealing with their methods.
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Re: Canadian Oil Sands
Old 02-19-2006, 04:06 AM   #8
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Re: Canadian Oil Sands

I work in the oil sands industry up here in northern AB. There is an enormous amount of heavy hydrocarbon up here. As usual, some of it is easy and cheap to get out but it gets more expensive the more is developed. Canada is a relatively reliable supplier, too. 2-3 million barrels in less than 5 years, my estimate--quite possibly in about two years. The big problem is going to be no where to sell it. Refining capacity in North America has been getting tighter over the years. We have been shutting down refineries here. It has to go through an extra step ('upgrading') before it can even be handled by a normal refinery (which is why it sells at a discount to benchmark crudes). Upgraders are being built now, but I think that there will be a bottleneck in the refineries downstream that will have to be removed, too.

Cost of production varies by producer and is rumored to be between $10 (too low I think) and $20/barrel. Understand that such numbers are hard to verify as they are confidential. After processing, it can be sold at about a 30% discount to the familiar benchmark crudes. We still make money.

High gasoline taxes would discourage US consumption. Ain't gonna happen. Increasing cost of production will eventually bring up the price of gasoline, I think. Higher prices will discourage consumption and change consumptipon patterns.

There is a lot of interest in nuclear power again, but it takes a lot longer to get a nuke built and the uranium mines have been shut down for years. Figure ten years or more away.

There is a lot of natural gas that used to be considered 'stranded', or could not be brought to market. All over the world there are projects to liquify this natural gas (LNG) and ship it. Yes, there is an unbelievable amount of natural gas under the ocean in hydrates, but we are far away from being able to bring that to market. LNG from the middle east will soon keep us warm until hydrates become practical to recover.

It is an interesting time to be in the business and there is lots of work for guys like me. Another couple of years like this and I wll be OK.

Cheer,

Gypsy

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Re: Canadian Oil Sands
Old 02-19-2006, 08:31 AM   #9
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Re: Canadian Oil Sands

The cost of support mechanisms to fully develop and refine the oil sands is estimated to be in the gabillions.* *
That will not happen overnight.
Hope you are keeping warm Ed
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Re: Canadian Oil Sands
Old 02-19-2006, 11:57 AM   #10
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Re: Canadian Oil Sands

JPatrick,

Yes, it is a big business. There are three big players right now pouring at least a billion dollars a year (maybe 2) EACH into expansions as fast as they can. There are two new players developing their sites as fast as they can at a higher burn rate. There are about four more in design, also as fast as they can do it. The railroad does not come as far north as Ft Mac (but it does come somewhat close). All this equipment has to come up little ol' highway 63, which is not in good shape. Roads in Canada are not a priority. By the way, you ought to see the trucks in the mines. They are called 777's. Carry 400 tons in one load. They can cross the road, but they can't drive down it.

Yeah, when it is -40 and the wind is blowing (not often!) you better be dressed for it. Mercury freezes at about -38 by the way.

There is a lot going on up here. Engineers are in high demand and it is safer than working in Iraq. Life is good.

Cheers from Calgary this morning.

Ed The Gypsy

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Re: Canadian Oil Sands
Old 02-19-2006, 09:23 PM   #11
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Re: Canadian Oil Sands

Gonna be back in Calgary in a few months as an ER person. Keep the oil sands booming Ed. That is good (for the most part) for the Calgary economy and perhaps for a potential part time consulting job for me should I get bored in ER.
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Re: Canadian Oil Sands
Old 02-20-2006, 07:15 AM   #12
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Re: Canadian Oil Sands

AltaRed,

I have many friends who talk about consulting part-time. The trouble is, you have to work massive overtime right up to the day you get laid off. Oh well.

Cheers from downtown Cowtown,

Ed
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