[deMolay]

I think your statement is a total crock as well...I doubt very much if you even know where Alberta is, or the size of the oil play going on here?

[Zardoz]

Leanan posted this on the front page:

Canada gas exports to U.S. could plunge

But the problem is not just about supply. Canada's oil sands producers are voracious consumers of natural gas, using it to heat steam to liquefy the tarry bitumen reserves trapped in sand and as part of the process to produce refinery-ready crude from the bitumen.

Oil sands demand for gas has climbed from under 400 million cubic feet a day a decade ago to about a billion cubic feet daily in 2006. And with more than C$100 billion ($86 billion) in projects either planned or being built to tap the massive oil sands resource, demand will rise further.

King estimates that demand from oil sand operators has climbed as much as 300 million cubic feet a day since the summer and will rise again next year, cutting into supplies that would otherwise be available for export.

We're really screwed.

[mekrob]

I think your statement is a total crock as well...I doubt very much if you even know where Alberta is, or the size of the oil play going on here?

You're going to have to do better than simply saying there's 1.7 trillion barrels of proven oil, and by proven oil we mean recoverable proven oil, if you wish to convince anyone that you aren't a complete idiot for making such a claim. I've never met a single person that could prove with facts that the current proven reserves are vastly understated.

There's plenty of proof of 1-2 trillion barrels of oil (equivalent) exists in the region, but not in any recoverable forms, not at such high figures. Extracting that oil and gas requires vast sums of energy and only a fraction of that oil is actually recoverable. From where you are getting your figures of 1.7 trillion barrels of proven reserves?

[ReserveGrowthRulz]

I've never met a single person that could prove with facts that the current proven reserves are vastly understated.

Of course RESERVES are understated, it happens so often that its size can be considered predictable on a macro scale.

Current Canadian RESERVES strike me as completely reasonable, and I'll bet Chavez, when he pulls the trigger on his heavy oil reserves, will be quite reasonable as well.

And 20 years from now, the RESERVES will be higher than they are today, in both places.

PS: Important words capitalized so people don't accuse me of playing around with their generally shoddy definition understandings.

[FishAreBest]

<<Canada can erect no barriers to export of energy to the States. Whatever taxes or royalites levied on energy apply equally to production sold in Canada or the U.S. Its a common energy market now.>>

Can canadians insist on payment in canadian dollars?

What's the balance of trade like between CA and US?

[mekrob]

Of course RESERVES are understated, it happens so often that its size can be considered predictable on a macro scale.

Even when dealing with unconventional reserves?

Current Canadian RESERVES strike me as completely reasonable, and I'll bet Chavez, when he pulls the trigger on his heavy oil reserves, will be quite reasonable as well.

So as a professional, are you willing to back up deMolay and say there is essentially a URR of 1.7 trillion barrels of oil in Alberta as he claims or would you assume that the figure is probably much lower?

While the current figure (170 billion I believe) is probably too low for an unconventional resource, how much of a change is likely? Is it a nominal figure (ex. 50 billion) or would it be a percentage increase?

[ReserveGrowthRulz]

Of course RESERVES are understated, it happens so often that its size can be considered predictable on a macro scale.

Even when dealing with unconventional reserves?

Alot worse with unconventional. With conventional resources, you can apply all the normal engineering/costing techniques to known reservoirs and relatively easy to produce reservoirs, and presto! Your number is still wrong and low, but its usually a good guess, the more investigation you do beforehand the better the guess.

But unconventionals tend to be wrapped up in technology and economics in a much worse way. For example, everyone has known about heavy oils, tar sands, oil shales, for a long time. But no reserves.

Recently, moving them from a resource calculation to a reserve number has taken new technologies, increased oil prices over a longer period of time to insure that capital investment doesn't get hammered by a slack off in demand, experimentation in an open regulatory environment like North America.

So, they venture a number ( in a tentative, gee its all new and exciting fashion ), and 10 years from now, after lots of practice with the heavy oils, tar sands and shales, they'll go "hey! Gee, if we just do this thingie, over here, using this idea" and bingo, another 100 Billion barrels hits the proven reserves column.

I'll leave out for now "regular" unconventionals, low perm natural gas which is more areal dependant, low perm gas/oil like the Sprayberry, low perm oil like the Bakken, or nearly anything in the Appalachian Basin.

So as a professional, are you willing to back up deMolay and say there is essentially a URR of 1.7 trillion barrels of oil in Alberta as he claims or would you assume that the figure is probably much lower?

While the current figure (170 billion I believe) is probably too low for an unconventional resource, how much of a change is likely? Is it a nominal figure (ex. 50 billion) or would it be a percentage increase?

URR, technically recoverable and reserves are all different animals. From what I've heard, the URR number you mention sure seems like an "in-place" number more than anything else, which tends to be high related to anything relevant. The current reserve number probably relates to your 170 Billion number.

The amount of growth available over the next few decades is most likely between those two numbers. Generic answer I know, but the problem goes like this, without a decent production rate, the 170 Billion number is a HUGE inventory for a low production rate, so why dig into the remaining resource for more reserves ( 1.7 trillion - 170 Billion )? My guess is the entire mess stays static, numberwise, for quite some time. And all this goes double for the Orinoco, except it has a political aspect to it which has the potential to make the numbers less reliable.

After 20 years, everything has changed, the infrastructure for producing these unconventionals is alot more established and paid for, which makes the next round cheaper, so even with reduced commodity prices, its possible to keep the entire scheme going.

[mekrob]

So then you are saying that he is probably wrong about the 1.7 trillion barrel proven reserves? That's what this is all about. Everyone knows that *current* proven reserve figures are off the mark, but to claim that the real figures are 10 times higher than that is completely ridiculous(which is exactly what deMolay claims and what I set out to refute) when that would mean that there'd be a recovery rate very close to 100%, when that is extremely difficult with conventional oil.

[ReserveGrowthRulz]

So then you are saying that he is probably wrong about the 1.7 trillion barrel proven reserves?

From what I'm familiar with in the Athabasca, that number sure looks like some pie in the sky URR. Not impossible I suppose ( if highly unlikely ), but so high as to be irrelevant in the discussion.

That's what this is all about. Everyone knows that *current* proven reserve figures are off the mark, but to claim that the real figures are 10 times higher than that is completely ridiculous(which is exactly what deMolay claims and what I set out to refute) when that would mean that there'd be a recovery rate very close to 100%, when that is extremely difficult with conventional oil.

From an engineering standpoint, I don't consider ANYTHING difficult, with the right budget. And completely ignoring every environmental law invented by rabid tree huggers.

I don't recommend considering a given number "ridiculous" however, most of these estimates MEAN something within the usual industry definitions.

For example, if someone INSISTS to me, "There is 1.7 Trillion barrels of PROVEN RESERVES in the Athabasca", I figure they are confused, or some silly amateur, or incompetent.

But if you just change "proven reserves" to "estimated ultimate" or "total calculated in place" I figure its reasonable, in one scheme or another.

This might seem like hair splitting to some, but I've been in court enough to be very, very particular about certain terminology, particularly as it relates to reserves and the $$ evaluation of oil and gas properties.