As I investigate this question, the complexity of the issue becomes more apparent. According to
wikipedia, the actual Athabasca production in 2012 was 1.8 MBPD or 657 MB for the year. However,
Oil_sands Wikipedia article says that "In 2011 alone they produced over 52 million cubic metres of bitumen"
Tailings Report referring to "nine oil sands mining projects in the Athabasca oil sands deposit." (deficient in tailings management, btw) I calculate that 52 million cubic metres of bitumen is approx 3.12 billion barrels. The 1.8 MBPD figure for tar sands production is confirmed at
QuickFacts.
This Wikipedia article says that when we "include the cost of upgrading the crude bitumen to synthetic crude oil" the final production costs are C$36 to C$40 per barrel "for a new mining operation." But, in the Oil_sands wikipedia article, the costs are given as "The Canadian Energy Research Institute (CERI) further refined the numbers and estimated that in 2012 the average plant gate costs (including 10% profit margin) of primary recovery was $30.32/bbl, of SAGD was $47.57/bbl, of mining and upgrading was $99.02/bbl, and of mining without upgrading was $68.30/bbl." According to Andrew Leach, "production cost for synthetic crude from the major open pit mine projects is $31 to $39 a barrel, at current exchange rates."
Lower Oil Prices Strike at Heart of Canada’s Oil Sands Production However, the
Keystone XL Project study seems to assume that a $75/barrel price for WTI equivalent is needed to keep revenues above costs.
The actual selling price is a little hard for me to find, but at $50/barrel simple math gives $32,850 million or $32.85 billion yearly for 1.8 MBPD production. This
WSJ article has a graph showing tar sands oil sells for as much as $40/bbl less than WTI (recently approx. $13 less).
According to the
Lower Oil Prices Strike NYT article:
Canada’s oil sands — and the 167 billion barrels of reserves — prompted an unprecedented expansion over the last decade. But the roughly $155 billion spending spree left the industry with unusually high production costs. . . .
The (spending) cuts, though, won’t necessarily translate into lower production. Oil sands production is expected to increase by 25 percent, to 4.8 million barrels a day, according to January estimates by the Canadian Association of Petroleum Producers, partly because of new projects moving into production. The enormous projects are just too difficult to switch off, and the companies must keep pumping crude to cover the sizable debt on their multibillion-dollar investments. They also don’t want to cede market share to producers in other countries. . . .“It really makes no economic sense to bring down production at this point because most of the costs are sunk,” said Stewart Glickman
To further emphasize the sunk cost aspect of production,
Can Canadian Oil Sands Survive Falling Prices? makes the point:
That cost structure may give oil sands producers an advantage over frackers in the U.S., who operate on a much shorter time horizon. Fracked wells in the U.S. tend to produce most of their oil within about 18 months or so. That means that to maintain production and rates of return, frackers need to keep reinvesting in projects with fairly short lifespans, whereas an oil sands project, once up and running, can continue to chug along, even in the face of lower prices, since its costs are spread out over a decade or more rather than over a couple years. That should keep overall oil sands production from falling and help insulate oil sands producers from lower prices, at least for now.
OK. I invite any knowledgeable person to give better figures. It seems that we have subsidies of about $3 to 4 billion versus revenues ($50/bbl) of approx $33 billion, for a net of approx. 10% subsidy.
Plus, the cost structure of tar sands means that debt restructurings, tax writeoffs, a little QE, undone cleanup, etc. may provide enough undocumented savings for the operations to continue at a "profit" indefinitely.