TAR SANDS HIGHWAY TO HELL
COAL-BED METHANE
PEAK OIL
PEAK ENERGY
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http://www.aspo-usa.com/index.php?option=com_content&task=view&id=291&Itemid=91
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HIGHWAY TO HELL
http://www.onearth.org/article/canadas-highway-to-hell
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LIQUID ASSET
http://www.reportonbusiness.com/servlet/story/RTGAM.20080327.wrob-0408-liquidasset/BNStory/specialROBmagazine/home
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| What's New at the Tar Sands? |
| Written by Dave Cohen | |
| Wednesday, 02 January 2008 | |
| My neighbor has a circular driveway ... he can't get out. When the New York Times recently reported on falling exports due to rising consumption in the oil producing nations, the paper of record decreed that it is now time for Americans to pin their hopes on Alberta's tar sands. "More likely, experts say, [falling exports] will mean big market shifts, with the number of exporting countries shrinking and unconventional sources like Canadian tar sands becoming more important, especially for the United States." It behooves us to keep track of what's going on at the tar sands in so far as the "official" story now states that well-being of the world's most voracious oil consumer depends on steadily rising synthetic crude output. A close look reveals that all is not well along the Athabasca River. Statistics Canada released its latest numbers for energy supply and demand on December 20, 2007.
As a writer about energy issues, the author is usually very careful about the language he uses, reserving the word "jumped" for sudden, often unexpected, large increases. Statistics Canada tells us that tar sands production "jumped" four thousand cubic metres per day in 2007 over 2006. A cubic metre = 6.28994 barrels, so the increase was from 1.132 to 1.157 million barrels per day, a growth rate of only 2.2%. Perhaps the phrases "modest rise" or "lackluster increase" would have been more appropriate. It is probably unfair to say that that the "jump" works out to $80,000 per barrel, given the capital expenditure increase of $2 billion in 2007, because current production is a result of past investment. Nonetheless, the per-barrel capital expenditure number is striking. It also doesn't matter much these days whether the 2007 expenditures are measured in Canadian dollars or American dollars. The Ontario-based newspaper The Record reports another disappointing development in Oil Sands prosper at record prices while natural gas takes a back seat (December 27, 2007). The news account also tells us why tar sands production growth is slowing.
Note: In fact, the NEB assessed three scenarios under which oil sands production will increase anywhere from 2.6 to 4.9 million barrels a day by 2020. The steep drop-off in drilling for natural gas is due to low prices in North America, which are quoted at $6.50 per thousand cubic feet for 2007 in The Record story, accompanied by inflation in the value of the "loonie" (slang for Canadian dollar), which lowered profit margins on U.S. exports. Herring called 2007 an "unpleasant and difficult'' year. 2008 promises more of the same.
It gets worse—the drilling slowdown is a disaster for Canadian natural gas production. The NEB's Short term decrease seen for Canadian natural gas deliverability (October 10, 2007) tells the story.
Lower natural gas production over time in the WCSB will constrain production at the oil sands unless Canada decreases exports to the United States, thus freeing up more gas for mining and SAGD extraction. The NEB's announcement reveals just how absurd the situation has become. "Another contributing factor [to lowered drilling rates] is investment in oil and oil sands development, which competes for investment capital with natural gas drilling." Increased investment in the tar sands is hampering investment in the natural gas upon which production at the tar sands depends! To make matters worse, decreased exports to the United States would result in less revenue available for natural gas drilling, which would lead to lower production rates ... and so on. Additional natural gas for powering tar sands production in the future could arrive via the proposed MacKenzie pipeline, which would carry the gas to Alberta from the Northwest Territories.
The contentious environmental assessment for the pipeline has been ongoing for over four years now. Combined with the soaring cost estimates, the environmental concerns make the MacKenzie more like a pipe dream as things stand now. Production growth at the tar sands slowed considerably in 2007. It is hard to avoid the conclusion that natural gas availability at the tar sands is a disaster waiting to happen. Investment continues to pour in, but it seems that few analysts or reporters have taken a hard look at future tar sands production in light of declining natural gas production in the WCBS. Alternative energy sources such as nuclear or bitumen gasification are a long way off. Look for this emerging story to appear in press accounts within the next few years. Production of synthetic crude at the tar sands is not likely to provide the much longed for salvation that will keep American drivers on the road. Contact the author at dave.aspo@gmail.com
Comments (2)   written by a guest, January 02, 2008 Will the THAI (Toe-to-Heel Air Injection) process make any difference?  written by Eric Skelton, April 09, 2008 Writing as a Canadian, I see a looming dispute with the U.S. over the terms of NAFTA, which require my country to keep sending the same proportion of its energy production to US markets even when Canadian consumers have not enough. It is doubtful Canadians will tolerate freezing in the dark just so we can honour a trade agreement that many of us didn't agree with in the first place. And I agree that natural gas depletion is the Achilles Heel of tar sands, a massive open-pit mine that only makes sense when there are abundant LOCAL supplies of natural gas. Again, would it make sense for Canada to use its last gas to cook tar sands for export to the U.S.? When gas shortages hit Canada, politicians here will deliver gas to the Canadian homeowner, or they'll pay with their jobs. The other unknown is coal-bed methane, which currently is extracted using the dirtiest, aquifer-polluting means imaginable (injection of dry-cleaning fluid and requires innumerable small wells. Although abundant,it could be called a sunset resource in that it cannot be scaled up quickly. You cannot develop a resource scattered over an area the size of Florida very rapidly. As you point out in your article, cash infusions in the tens ofbillions of dollars are barely able to increase tar-sands production. Write comment |
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ISSUE: Fall 2007, feature stories | September 1, 2007
Click for full-size image Before and After: The first step in preparing the ground for open-pit mining is to raze the virgin forest. Jiri Rezac/Eyevine Every day approximately 50 new fortune seekers travel north on Canada's Highway 63 to the tar sands of Alberta, to join what may be the world's last great oil rush. The two-lane all-weather highway starts about 100 miles north of the provincial capital, Edmonton, and ends at Fort McMurray, a sprawling city hastily carved out of swampy groves of spruce. The road was originally built in the 1970s to connect a marginal and experimental source of heavy oil with the rest of the country. It has since become a continental artery to a modern-day Klondike that has made Canada the number-one supplier of oil to the United States. That's right -- Canada.
I don't think I've ever driven a more hectic piece of blacktop. Most locals call it Hell's Highway or the Highway of Death. On any given day thousands of logging trucks, SUVs, semitrailers, buses, and tanker trucks form a frantic parade to and from North America's largest engineering project. Convoys of extrawide loads often block an entire lane of the highway with turbines, tires, or house-size coker ovens used in oil processing. In fact, Highway 63 ferries one of the highest tonnages per mile of any road in Canada.
This congestion encourages a certain do-or-die recklessness. Impatient drivers not only pass on solid lines on hills but do so at speeds of 140 miles an hour. As a consequence, road accidents tend to be fatal or bloodily spectacular: Every month as many as four tar-sands workers get decapitated, skewered, or incinerated. It's not unusual to pass an overturned semitrailer smoldering like a burned-out Humvee on a Baghdad street.
On Thursday and Sunday nights, the open-pit mines change shifts, and thousands of itinerant tar-sands workers head south looking for R&R in Edmonton. Young men, of course, don't worry about mortality, and many of them take to the road in Dodge Ram 3500s or GMC 4x4s, blind drunk or high on crystal meth. Sensible drivers avoid the road on those nights; they don't want to add to the rows of little white crosses decorated with blue hard hats, bottles of Russian Prince Vodka, and stuffed teddy bears.
Hell's Highway leads directly to the hydrocarbon center of North America: the old fur-trading rendezvous of Fort McMurray. Thanks to a recent explosion in investments by the major multinational oil companies (more than $125 billion in U.S. dollars is committed over the next decade), Fort McMurray and environs may soon become the planet's largest source of new oil. By some estimates the surrounding waterlogged forest holds almost 60 percent of the black gold available to global investors. With nearly 175 billion barrels in proven reserves, the tar sands represent the biggest pile of hydrocarbons outside Saudi Arabia. Many experts suspect they hold eight times that much. Stephen Harper, the prime minister of Canada, rightly calls the project "an enterprise of epic proportions, akin to the building of the pyramids or China's Great Wall. Only bigger." Al Gore calls the whole enterprise "truly nuts."
Most Americans don't know it, but approximately 16 percent of their oil imports already come from northern Alberta. Plans drafted last year by the North American Energy Working Group, which is made up of high-ranking Canadian and U.S. officials, recommend boosting production from one million barrels a day to five million barrels in a "relatively short time span." So the tar sands could soon be topping up a quarter of the U.S. gas tank. "Anyone watching what is happening up north will recognize that, before long, Canada will inevitably overtake Saudi Arabia as the world's oil giant," Senator Orrin Hatch, the Utah Republican, declared in 2005. "It means that the United States can enjoy a new gigantic source of oil from a friendly neighbor."
But for friendly Canada the tar sands are rapidly becoming an environmental liability as well as an economic hurricane. Described by the United Nations Environment Program as one of the world's top "environmental hot spots," the project will eventually transform a boreal forest the size of Florida into an industrial sacrifice zone complete with lakes full of toxic waste and man-made volcanoes spewing out clouds of greenhouse gases. Are Canadians willing to create an environmental disaster in Alberta in order to provide the U.S. market with some of the most expensive oil in the world? The answer seems to be an emphatic yes.
The tar sands do not in fact contain oil but bitumen, probably the product of a freak geologic event. Formed more than 100 million years ago by marine organisms trapped in an ancient seabed, the tar sands are composed of a heavy chain of carbon-rich atoms high in sulfur. Bitumen, a thick, sloppy mess of oil, water, clay, and sand, feels and smells like cheap asphalt. The Cree used to heat up the stuff to repair leaky canoes. But most petroleum engineers acknowledge that it is one of the world's dirtiest fuels.
It's not hard to understand why. To capture just one barrel of oil from this geologic pudding requires brute force. Great machines mow down trees (and all their supporting creatures such as boreal songbirds and woodland caribou), roll up acres of muskeg, drain entire wetlands, and reroute rivers. Next, for each barrel, workers must scoop up two tons of sand and wash the stuff in hot water. Even then the bitumen requires substantial upgrading to remove engine-clogging impurities. It costs more than 10 times as much to produce a flowing barrel of oil in this way than it does to produce a barrel of Saudi light oil. The entire process is fueled by natural gas, and the energy consumed is awesome: Every 24 hours the industry burns enough natural gas to heat four million American homes in order to produce one million barrels of oil.
The shallowest of the tar sands -- about 20 percent of the total -- can be mined using giant, 400-ton 797B Caterpillar trucks made in Illinois, which stand one and a half stories tall. Women make the best drivers, an earnest Shell engineer explained to me as we stood at the bottom of a three-mile-wide open-pit mine as black as a starless night: "They are just easier on the machine." Fifteen-million-dollar 495HF Bucyrus electric shovels, made in Wisconsin, can top up one of these Caterpillar trucks in four passes. Just about everything in the tar sands, added the Quebec-born engineer, "is an order of magnitude larger than the imagination."
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Comments
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Rick wrote on May 01, 2008, 05:37AM :
Well he understated the cost of a 3 bedroom house. You pay that much for a friggen single wide trailer. The place is a black hole!
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BC in FtMac$$ wrote on March 24, 2008, 07:39PM :
Regarding Hwy63: Yes... 140MPH (not KMH).
The author is high-lighting a single headline for an individual who was charged by police in 2005? 2006? The driver in question was not only charged with speeding but also a range of other more serious charges (public endangerment?... dangerous driving!...) and lost his license for several years (10?15? I believe it was 10). The author's 140MPH statement is just as true as it is to say that a lottery ticket is a good retirement investment!
Additionally, the authorities have dealt so seriously with all 'extreme drivers' that this 'exceptional minority' risk not only life & limb when they offend, but also some very extreme charges ranging well beyond a speeding ticket. Regardless, if you have a choice, don't travel Hwy63 on Thursday & Sunday nights.
In my experience of 7 years with Hwy63 I believe it is safe to say that Hwy63 is mainly a shame to the credit of the Alberta government. However, in their defense, I have also heard the stories of the original oilfields development plans which resulted in significant preparational expense for the Wood Buffalo Region in anticipation... and then much of the development was scaled back/shelved. I do not know the details so I can only guess whether the Alberta government now was worried that the US might get back into bed with the Middle East and then 'shelve' FtMac for another 25-30 years. They would look pretty stupid spending the money for the road, etc. if the development had exploded for a few years and then stopped.
My personal opinion... the government waited too long and killed several people in the process.
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BC in FortMac$$ wrote on March 24, 2008, 07:03PM :
Most comments have 'conveniently' avoided the 'environmental issues'.
Ever heard the old saying... reserve judgement until you hear all sides to an issue? I don't say there is no damage to the environment, just do a little more research before forming a final opinion.
I originate from NW BC (environmentalists & land claims). For many years I agreed with both of these issues, however, when the majority of the 'squawkers' are comfortable with their good industrial job, professional incomes and/or government handouts, then I begin to question the validity of their arguements. All my life I have seen a small group of mutually patronizing workers horde the best jobs and the best wages in the industrial sector. If you don't kiss the right ass or adopt the right set of values, regardless if they are true or not, then you don't 'fit in'. Society has always accepted a degree of polution, etc so that these few 'advantaged' worker could have a good life. I say horrah for Alberta and the oilsands for creating an environment where virtually any physically capable person (not Indian/Native, not female, not married w/children, not boss-ass-kisser, not... etc) can have a job and a future in this modern (money driven) society. If you don't like it, and you want my support, then create a 'perfect world' where none of these unjust advantages exist. Until then... SHUT UP!
short takes
The Wild North: Much of the boreal is a mosaic of wetlands. Jiri Rezac/Eyevine 
Tar-sands workers await buses to take them to the Millenium Camp, where they live. Alex Webb/Magnum Photos 
Brute Force: Enormous dump trucks (each tire is 14 feet tall and weighs 40,000 pounds) carry off the earth that once sustained a primeval forest. Jiri Rezac/Eyevine 
Mike Reagan 
Keep Off: In an effort to deter migratory birds from landing on the huge, toxic tailings ponds, mine owners use scarecrows (known as bitu-men). Alex Webb/Magnum Photos .