THE Tar Sands Thread (merged)

[EnergyUnlimited]

Yeah that is when things will go from horrible to Apocalyptic. We are entering into a world wide economic depression as the global financial system fails. What do we find as we claw our way out of the pit? Peak Oil.

That is why I don't consider NWO to be a feasible outcome.
1. Economy fails.
2. Resource base fails.
3. Environmental disaster is developing.

That implies fragmentation of global system, not further integration, regardless of wishes of enlightened elites.
There will not be sufficient resources to run integrated global system. And there will be a quarrel over remaining ones...

[Gebari]

That's a theory I've been thinking about for some time. It won't just be tar sands either but many other expensive difficult reserves that have been opened in the last few years due to the oil price explosion - including biofuels. They may now be unprofitable, so they are abandoned. The mad rush to produce them when they were profitable may have damaged them also (and maybe the larger reservoir if they were an uneconomical part of a larger field) , and the economic problems ahead may mean that they are never reopened.

The collapse of credit may cut a lot of funding for other sorts of oil production aswell, including biofuels. There could also be further problems with maintenance and repairs of infastructure if/when the economy goes to hell. This is pretty much worst case scenario for the long term.

EnergyUnlimited, I agree with that too. I think we're going to see a breakdown of globalisaton and increasing nationalism. A general lurch to the right.

[TheDude]

Your Tar Sands projects for 2008-2011:

Code: Select all

Canada    North Amethyst    01/2010    Husky
Canada    AOSP Expansion 1 (Jackpine Ph 1A)    2010   Shell
Canada    Christina Lake (Phase 1C)    2010   EnCana
Canada    Primrose East    02/2009    CNRL
Canada    Firebag Ph 3    2009   Suncor
Canada    Jackfish Ph 2    2010   Devon Energy
Canada    Jackfish Ph 1    03/2008   Devon Energy
Canada    Christina Lake (Unnamed Expansion 1)    2011   EnCana
Canada    MacKay River Ph 2    2011   Petro-Canada
Canada    Millennium Coker Unit    2008   Suncor
Canada    Kearl Mine Ph 1    06/2010   ExxonMobil
Canada    Christina Lake (Phase 1D)    2011   
Canada    Kirby    2011   CNRL
Canada    Long Lake Upgrader Ph 1    09/2008   OPTI /Nexen
Canada    Horizon Oil Sands Project (Phase I)    09/2008   CNRL
Canada    Christina Lake Ph 2    08/2008   MEG
Canada    Christina Lake Ph 1B    09/2008   EnCana

Checking quotes they all look down across the board. Dunno how that affects their ultimate capitalization potential. Gail Tverberg wrote a TOD post on The Impact of the Credit Crunch on Energy Markets, if you want to dig deeper.

My own feeling is that we're screwed/trapped/stuck/painted into a corner.

Prices decline = gasoline is more affordable = drivers give up on that awful MT they had to resort to = back up with VMT = we hit supply snag due to dropping price making unconventional and high price floor conventional sources uneconomical - GOM rigs damaged by Ike for instance.

Also GM sees which way the wind is blowing and delays or abandons Volt. Toyota's stock is taking it on the chin already - will they proceed with $1.3 billion Prii plant in Mississippi? Etc. etc.

[DarkDawg]

Also, the multiple nuclear energy plants that McCain thinks will "bridge the gap" will have no capital from which to be built. When NG and UNG is gone and nuclear is unfeasible economically, how will the tar and shale be processed? The solar sector is also taking a dump.

The end of credit = TSHTF = PO.

[DaleFromCalgary]

Existing oilsands* plants will keep going down to $40 a barrel because the capital costs are taken care of. What is happening now is that new projects are being postponed, officially because of high construction costs.


*Don't confuse "tar sands" with "oil sands". There are three main oil sands deposits in northern Alberta: Cold Lake (below ground), Peace River (below ground), and Athabasca (exposed at the surface). Cold Lake and Peace River deposits are steamed out with horizontal drilling. Athabasca deposits are mined from open pits and steam-heated in giant trommels. Tar sands are simply oil sands exposed at the surface. All tar sands are oil sands but not all oil sands are tar sands.

[Aimrehtopyh]

I thought that the biggest factor for oil sands was the differential between the price of natural gas and the price of crude.

As long as natural gas falls along with crude they should remain profitable, right?

Spikes in the price of natural gas have resulted in shutdowns in the past, and this was when crude was well above $40.

[Starvid]

I think the most important factor is how old the facilities are: the older ones got financing when money was cheaper. And these are very capital intensive projects.

Those that have cheaper financing in place have a lower marginal cost.

</speculation>

[deMolay]

The only reason oil prices are falling is because of the depression setting in, in China. Many of these oil sands plant are not as dependant on Natural gas as they used to be, many now use snygas. Gas made from the crude extraction process itself. The Gahwar is dying rapidly, Mexico is dropping all conventional oil is dropping. The low prices you are seeing now will not last long, so enjoy the respite. Peak Oil is here to stay and it will continue to grind non stop. Many investors have pulled back and sold everything to settle margins and debt. Oil is energy nothing has replaced it. Or civilization's need for it yet.

[Starvid]

Also, the multiple nuclear energy plants that McCain thinks will "bridge the gap" will have no capital from which to be built.

Don't be silly. Google "EdF" or "TVA" or "Vattenfall".

[Starvid]

The Gahwar is dying rapidly, Mexico is dropping all conventional oil is dropping.

Prove it. Extraordinary claims require extraordinary proof.

[TheDude]

Piece in today's NYT: Unconventional Oil on the March, which links to a more detailed article at Greenwire.

As countries cast about for alternatives to Middle Eastern oil supplies, the debate over nonconventional sources of oil — principally that which is milked, in a variety of ways, from sand and rock — has become increasingly pitched.

Proponents see them as viable and cost-effective alternatives to conventional oil. Opponents argue that nearly all methods for separating usable oil from earthen deposits is energy-intensive and profoundly polluting.

Today, Ben Geman at Greenwire.com takes an exhaustive look at oil sands production in Alberta, Canada — one of the biggest sources of unconventional oil. Canada, Mr. Geman notes, is the biggest oil supplier to the United States, providing roughly 19 percent of Ameria’s imports, and most of this comes from Alberta:

[WildRose]

The Pembina Institute has recently published the report, below, in which they outline the need for the government of Alberta and the federal government of Canada to reform their approach to environmental management with respect to oil sands development. After years of trying to protect Alberta from unsustainable practices in the tar sands, they are fed up!

Report, Taking the Wheel

http://www.oilsandswatch.org/pub/1677

[skiptamali]

Fantastic.

Previously touted as a fantastic source of domestically-produced, reliable petroleum, oil sands have officially been dismissed as a feasible means of cutting carbon emissions by the Canadian government.

OK I know North American oil is supposedly better than buying from Venezuela or the Middle Eastern OPEC countries, but all I've been hearing is bad news about how its production process is arduous & severely pollutes surrounding ecosystems.

Thank goodness the Canadian govt has finally put an axe in this one! It may have taken the high cost and energy excuse, but I'm breathing easier now that one super destructo way of ripping apart land for resources is declared bunk for climate change.

Now if we can just get the US govt to stop buying it...

[some_math_guy]

You make it sound like a foregone conclusion!

I can assure you that the Canadian government is not, and will not, being doing anything to obstruct further tar sands development in Alberta. The Conservative government has made this clear through continuing preferential tax rates and huge subsidies to tar sands companies, as well as demonstrating a total disregard for environmental concerns like the 5-square kilometer lake of toxic sludge in Fort McMurray that is currently poisoning local residents over 250km away.

The current Prime Minister has a long personal and family history of employment with and connections to oil companies, and until he is forced out, the tar sands will continue on an ever-larger scale.

[Jester]

The process is turning the landscape into a wasteland. As long as it makes money, they don't care.








The only thing that will slow it is less demand, and only temporarily. A lot of projects are getting shelved because of the low oil prices right now. Once the price goes back up, it'll be back to expanding more even more projects...

[RdSnt]

There is a very narrow price range, for regular petroleum, where the tar sands will be viable. If the price of oil goes too high the companies can't afford the fuels and feed stocks needed to process the tar.

Once the natural gas feedstock in the area are used up tar sands development will come to a halt. Talk of using nuclear to extract the tar is simply not viable and still doesn't solve the problem of a lack of natural gas.

[highlander]

While I disagree they are a total waste, It is true that expansion is not in the cards for the near future. The machinery is being torn down and moved to Australia (for what?) It is unlikely it will be returned even when oil hits 200/bbl

[DaleFromCalgary]

"The machinery is being torn down and moved to Australia "

What machinery are you talking about? The Athabasca Tar Sands (open pit mining) and the Peace River and Cold Lake oilsands (belowground horizontal drilling) are and will still continue to operate. New projects are being postponed so perhaps the construction equipment is being moved elsewhere to other jobs.

The oilsands are not shutting down.

[POAlex]

At what oil price do the tar sands become unprofitable?

Alex

[ColossalContrarian]

At what oil price do the tar sands become unprofitable?

Alex

My WAG is $85 a barrel.

here's some more info:
The returns on extracting oil from tar sands is approximately 3 barrels of oil for every 2 consumed.

EROEI of 1.5

Tar Sands are about to get OWNED!!! as in going out of business for awhile....

Tar Sands info