Oil from oil sand

Alberta, Canada is the site of massive oil sand deposits. Production of crude from this source promises to be an increasingly important source of energy in the future.

Just outside this boomtown, huge machines dig up the earth and remove the oil sands, whose deposits of a substance called bitumen smell something like roofing tar and are as thick and sticky as molasses. Companies are mining hundreds of feet deep and running the unearthed deposits through a complex process to convert them into oil. Companies move enough dirt and oil sands in two days to fill Yankee Stadium.

Factoring in the oil sands, Canada's proven oil reserves are reported to be nearly 180 billion barrels, second only to Saudi Arabia. U.S. energy officials say Canada's oil-sands deposits are among the largest in the world. The oil sands are buried under an area about the size of New York state. Fort McMurray, the hub of oil-sands activity, boasts on billboards: "We have the energy."
Oil sand

Production is at maximum capacity at this very moment, and can only grow in the future:

Some companies would like to invest more but are constrained by a tight labor market, logistical complications and sophisticated machinery that takes years to build. Companies are lobbying for improved roads, affordable housing and other government services they say are needed to support expansion.

"The industry is growing as fast as it can," said James E. Carter, president of Syncrude Canada Ltd., which started producing from the oil sands here in 1978.

Hey Canada, remember - we're your best friend!


[edit on 15-6-2005 by jsobecky]

The tarsands of Canada have a lot of potential, as do the oil shales of the United States. If petroleum stays as high as it is now or goes even higher, these alternative sources will be better developed.

[edit on 6/16/2005 by djohnsto77]

Originally posted by jsobecky
Hey Canada, remember - we're your best friend!

Since the US keeps invasion plans for Canada, I think Canada needs no enemies with the US as "friend". Extraction of oil from the tar is also pretty energy intensive (probably pretty polluting as well) and only economically viable on large scale if the oil price goes up. So although this is an alternative for when oil runs out, it will not provide cheap energy.

Originally posted by Simon666
only economically viable on large scale if the oil price goes up.

Actually, they are up there making money from oil sands right now.

Originally posted by cavscout

Originally posted by Simon666
only economically viable on large scale if the oil price goes up.

Actually, they are up there making money from oil sands right now.

Indeed they are. It costs about $25/barrel to produce, which is more expensive than the $5-10 of conventional oil, but still very profitable with oil at $60/barrel.

The US has its own resources of oil sands, with the reserves estimated between the equivalent of 30-50M barrels of oil, which isn't huge, but its a decent amount. This has yet to be tapped, though interest in developing this resource is increasing in light of high oil prices. The US also has enormous oil shale and coal deposits which can both be used to produce oil. So the US actually has a pretty good oil supply picture in the medium and long term and both are cost-effective at current prices. The shorter term (5-10 years) is where the problem lies, as it will take time to get new plants built and more importantly, cut through the regulatory red tape from the government.

If there is a bright side (and this is a double edged sword, believe me), if prices continue to rise, it will trigger a global economic recession or possibly even a depression. Once that happens, demand for oil will fall off a cliff and so will these prices. With Europe's economy in the tank and China and the US both expected to cool off economically later this year, a relatively mild recession could easily occur and put prices back into the much more affordable $35-45/barrel range for 2006.