As of this year, Canada's oil reserves suddenly jumped by 3,600% (from 4.8 billion barrels last year to 180 bbl), thanks to reclassification of Alberta's oil sands into the economically feasible "proven reserves" category. To put that figure in perspective, it gives Canada 50% more proven oil reserves than Iraq.
The beginning of Canadian world domination? The solution to America's Mideast oil dependency issues? Gal Luft of IAGS.org exlains why things aren't as simple as they seem.
You better tell your prime minister to watch himself, Joe. We're always looking for pretexts...
It's interesting to see that alternative methods of oil extraction are increasingly available.
I read Luft's article, but it doesn't answer a crucial question: Is the 9$ per barrel figure then wrong? Does it take into account the energy use costs of extraction? (Presumably it would). How about the costs of reclamation? Other externalities?
Without some sort of guidelines he doesn't provide a very clear basis for judging the economic feasibility issue he is challenging.
Canadian tar sand oil doesn't have to compete with Saudi oil in cost. Only selling price.
Tar sand oil from Canada was $11 bbl a few years ago so cost is coming down.
I would expect that the price includes required Canadian reclamation. Unless it is a government run operation.
Did I mention that the US of A has 2/3s as much tar sand as Canada? And enough wind to supply all our electrical needs and enough coal for 500 years? And we currently produce around 40% of our own oil consumption.
With natural gas prices escalating, wind is now economically viable on it's own merits.
Especially if you put the wind turbines near Washington, D.C.
heh. all those windbags have a good use after all.
Wow. Something we can all agree on.
Did I mention that the US of A has 2/3s as much tar sand as Canada?
Where? In what states? Is it on the surface like in Canada or would we have to dig? This reminds me of the article I read recently about some company that turns trash into oil.
I don't remember where a western state Colorado I think. Mining was started in the Carter years with a government subsidy. When the subsidy stopped so did the mining. The oil produced at the time was $40 a bbl.
I don't believe Luft's claim about the amount of energy required to extract a barrel of oil from oil sands. If it was true then, as Gabriel Gonzalez suggested, it would cost more to produce than the current world price for oil since the energy would bave to be bought to extract it.
I don't think this guy has done his homework. I also doubt that extraction from oil sands will get as cheap as Saudi or Iraqi oil extraction (and Iraqi oil is easier and cheaper to extract than Saudi Arabian oil btw).
One big factor slowing the expansion of oil sands extraction is the large capital costs of building the extraction plants. The risk is that investors could spend to build a plant, oil production from the Middle East could rise to the point of driving prices below the costs of the oil sand processing costs, and all that capital would have to be idled until world market prices rose again. Also, I checked a number of other sources for the cost of producing Alberta oil sands oil and came up with $12 USD per barrel as the cheapest price using the latest facilities. Not sure where he is getting the $9 per barrel.
We absolutely do need to develop replacements for Middle Eastern oil. I see the development of technologies to obsolete fossil fuels as an essential element of American grand strategy.
Hold on everyone appears to be missing the point. Just because I can produce at $10 per barrel does not mean that I will sell at a lower price. The difference between $40 a barrel and $10 of cost = $30 which goes to the company's bottom line. If supply in increased it will drive prices down a bit, but not to $10 a barrell. And this is assuming that the new supply will not be absorbed into the market but will be excess production. Right now China is sucking up everything she can which is helping to keep prices high. As long as her economy continues to expand count on high oil prices for the forseeable future. Just a thought.
Lets develop alternative energy sources and put the Saudis in the poor house.