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Black Gold in Alberta
June 26, 2006 8:17 AM   Subscribe

Black Gold in Alberta. The tar sands located in northern Alberta, containing 85% of the worlds bitumen could provide for america's oil needs for the next century. The trillion barrell oil pit will continue to grow in importance as the price of oil continues to climb, and investors from around the world pour billions of dollars into the rich dirt.
posted by blue_beetle (44 comments total)

 
I won't go into the political stuggle going on between the provincal and federal government over oil revenues, but rest assured, if the western provinces were to leave Canada, it would be because of this.
posted by blue_beetle at 8:20 AM on June 26, 2006


we should just invade. is there any way to link you guys with al qaeda?
posted by StrasbourgSecaucus at 8:21 AM on June 26, 2006


Al Qeada?

Yeah, he lives next door. Why?
posted by C.Batt at 8:25 AM on June 26, 2006


Invading ain't going to solve any problems.

The way things sit right now, there's no amount of supply-side changes that will lower oil prices. It's all demand-side.
If China is willing to pay more for oil that the US, then any and all oil will flow there.

You'd be better off invading some place that consumes a lot of oil and making them stop. That would push the price down.
posted by GuyZero at 8:26 AM on June 26, 2006


is there any way to link you guys with al qaeda?

Hm. How about Al Waxman?
posted by GuyZero at 8:27 AM on June 26, 2006


This has been discussed quite a bit, but I'm to lazy to check to see if it's an outright dupe.

Anyway. That's kind of nice. Did you guys know the US is still the world's number #3 oil producer? Behind only Saudi Arabia and Russia, and ahead of Iraq, Iran, Nigeria, Canada, the UAE and anyone else you can think of. It's just that we use so much oil it dosn't even matter.

Even if the tar-sands can provide 100 years of oil to the US, there's still the rest of the world, which consumes 3 times as much oil as we do. The oil price will continue to rise, and we'll be continued to be screwed.
posted by delmoi at 8:32 AM on June 26, 2006


The way things sit right now, there's no amount of supply-side changes that will lower oil prices. It's all demand-side.

While demand is certainly part of it, I don't think it's entirely true that there's no supply problems.
posted by jefgodesky at 8:39 AM on June 26, 2006


A couple of quick comments:

Price per barrel for production is now below $15 (some hint that it's nearer to $10). The Saudi's is still below $5, though they are famously closed-mouth about prices. The price heavily depends on that of natural gas, which is used as the heat source for steam-extraction. Alberta is essentially a big mid- to low-grade coal field, so one concern is that the oil companies could switch to coal, causing even more greenhouse gas emission per barrel extracted. Nuclear generation is also being discussed as an alternative. Production also depends on the use of very light crude oils called condensates. The Canadian fields off-shore of Nova Scotia and Newfoundland are good sources for these at the moment.

The upgraded bitumen, synthetic crude, is roughly equivalent to a medium to light crude, like some of the older Gulf of Mexico oils coming on shore in Louisiana. They're also sweet (low sulphur) which is the source of the price premium mentioned in the lead article. Syncrudes are better, lighter and sweeter, oils than the major crude coming from Mexico (Mayan).
posted by bonehead at 8:41 AM on June 26, 2006


The tar sands are a great resource that may not, under current circumstances, be very easily utilized for several reasons.

One of the major problem with tar sands currently is that to extract useful petroleum from them requires a massive influx of energy - something like .7 units in for every 1 unit out, if memory serves me correct.

The second major problem is being able to supply enough energy to the equipment needed to extract petroleum from the sands: build a nuclear power plant? Utilize already relatively scarce natural gas?

The third major problem is environmental destruction and degredation of resources such as water and land.

Don't take me wrong, I think that the *potential* from the oil sands is immense, but we still have a long ways to go before we're able to profitably, commercially and safely extract enough from these sands to make a dent.

Several studies suggest that we won't see any appreciable results until about 2015 - 2020. In the meantime we'll have to deal with increasing demand, decreasing supply and a host of geopolitical uncertainties that virtually guarantee prices will continue to rise.

If we're lucky (and I use the word 'lucky' as a quasi-joke), the price of oil will continue to rise to a pinch-point (as of yet unknown) where either consumption drops off significantly (called demand destruction by economists) or the viability of alternatives becomes economically viable to the point where supply comes back into balance.
posted by tgrundke at 8:45 AM on June 26, 2006


we should just invade. is there any way to link you guys with al qaeda?

Those touques are starting to look an awful like turbans, eh?
posted by Mr. Six at 8:47 AM on June 26, 2006


I think "invasion" is not the way we should be looking at this. Instead, we should be "liberating" the western provinces from eastern Canadian tyranny.
posted by Ber at 8:49 AM on June 26, 2006


Strip mining 141,000 km² of boreal forest is repugnant. But hey, we need our cheap oil.
posted by driveler at 8:53 AM on June 26, 2006


The way things sit right now, there's no amount of supply-side changes that will lower oil prices. It's all demand-side.

Oil price determination seems to be something of a dark art. By the time you get OPEC's cartel-like modulation of the market, mixed with "we'll pay what it takes to fuel our economy" thinking from China, plus arcane calculations of oil reserves, mixed in with market jitters whenever a bomb goes off in a country that has ANY sort of supply...

Suffice it to say the safest bet is that prices will continue to rise no matter who gets invaded, or who comes up with a good way to extract the stuff from Alberta. Until that magic day that we get the 'killer alternative' source of energy in place, at which point oil will be worth less than mud.
posted by Zinger at 9:11 AM on June 26, 2006


A bunch of Venuzalen oil comes from a similar source in the Orinoco. Can't we just get our shit together and stop grasping at straws? Here's ust one brief cri de couer among many common-sensical ones.
“Tar sands oil is to conventional oil what crack cocaine is to ordinary cocaine powder,” says Elizabeth May, executive director of the Sierra Club of Canada. “It’s more harm to global climate through increased greenhouse gas emissions, more destruction of boreal forests, more toxic tailings and more air and water pollution.” The club estimates that the expected doubling of tar sands production by 2010 will produce 70 megatons of global warming gasses annually—12 percent of Canada’s Kyoto target for that year.
posted by DenOfSizer at 9:12 AM on June 26, 2006


Even if the tar-sands can provide 100 years of oil to the US, there's still the rest of the world, which consumes 3 times as much oil as we do.

That is only one problem. A barrel is 42 gallons. A barrel of Brent oil, or light sweet blend produces about 15 gallons of gasoline or about 30% by volume. Venezuelan crude yields only about 5%, oil recovered from tar sands produces far less gasoline than this. Moreover, tar sands are nowhere near as easily mined, transported, or refined as crude oil.

In short, the economics of the oil based economy will collapse long before the supply of fossil fuels runs out.
posted by three blind mice at 9:19 AM on June 26, 2006


We have proof that Canada has Boreal Forests of Mass Destruction.

Now can we invade?
posted by zaelic at 9:19 AM on June 26, 2006


we should just invade. is there any way to link you guys with al qaeda?

With Iraq going the way it is, invading the north would be suicidal. Besides, it's the Rachel McAdams of nations. Would you really want to rape her in front of the rest of the world? I get the feeling Rove would.
posted by disgruntled at 9:20 AM on June 26, 2006


Strip mining 141,000 km² of boreal forest is repugnant.

"Twenty-four hours a day, 365 days a year, vehicles that look like prehistoric beasts move across an arctic wasteland, extracting the oil sands. There is so much to scoop, so much money to be made. "

Hey, its not boral forest, its just some damn arctic wasteland!

This makes me so sad..
posted by c13 at 9:21 AM on June 26, 2006


We don't need no stinking renewable resources...

We have a major problem up here when it comes to tar sands development. It is true that it gobbles up a tonne of energy to extract the oil from dem dar dirt, but the issue (from my standpoint anyhow) is how the government forsees reducing the burden on the local environment.

Carbon Taxes.

Now picture carbon taxes which the producer will pay as a portion of a fixed levy on the amount of carbon derivatives released into the atmosphere on a given day. Now picture the fluctuating price of oil and add in the labour driven economies in the area further growing. A carbon tax will end up being nothing more than a small stipend that will end up going back into a government coffer, the environment seeing perhaps a portion, because inevitably, it'll get soaked into general revenues and we all know what happens with the cash put into general revenue.

And of course, since this tax will be considered a production tax, the end consumer will not be hit with a direct pass-on, but rather with the indirect costs that the company then passes-on (increased labour cost, insurance, maintenance, etc..)

...sigh...
posted by pezdacanuck at 9:25 AM on June 26, 2006


After watching Al Gore's movie last week (and, yes, if he had exhibited that much personality during the election W wouldn't be where he is today!), this is no longer of interest.

I'm pretty well convinced that we're gonna be under water long before we'll be able to rape Canada for its oil. Once we're all about 20 feet below sea level, oil will be of maginal use..
posted by HuronBob at 9:26 AM on June 26, 2006


btw.. That was a 60 minutes softee piece.
posted by pezdacanuck at 9:26 AM on June 26, 2006


We don't need to invade Canada over oil sands; we have 1.8 trillion barrels worth of our own.
posted by TedW at 9:32 AM on June 26, 2006


My Dad bought a ton of stock in one of these companies about 10 years ago. Guess he was right after all.
posted by fshgrl at 10:29 AM on June 26, 2006


There was an excellent AskMe discussion about this a little while ago. Also, the "Black Gold" is "Black Death" to anyone living near the deposits.
posted by purephase at 10:43 AM on June 26, 2006


if the western provinces were to leave Canada

But they can't. So it's purely speculation.
posted by oaf at 10:59 AM on June 26, 2006


we have 1.8 trillion barrels worth of our own.

But can we get it out? Besides everything else, shale oil takes huge amounts of water for one thing to extract it. Not a lot of water in that part of the world, and there are a lot of claims on what there is already.
posted by IndigoJones at 11:37 AM on June 26, 2006


But they can't. So it's purely speculation.

That's never actually been tested. The various referenda in Quebec never garnered enough support to actually move forward. Secession from Confederation could happen.
posted by dirtynumbangelboy at 11:46 AM on June 26, 2006


It simply isn't going to scale up, period. Production is currently estimated to only reach 2-3 million barrels per day within a decade.

The world is currently burning between 84 and 85 million barrels per day - the US about a quarter of that, around 20 to 21 million barrels per day.

It's not going to be a major contribution, so don't hang your hat on it.

Much substantial and informative discussion from industry professionals here.
posted by zoogleplex at 11:50 AM on June 26, 2006


But can we get it out? Besides everything else, shale oil takes huge amounts of water for one thing to extract it. Not a lot of water in that part of the world, and there are a lot of claims on what there is already.

Tar sands have very similar problems. One couldn't ask for a better example of the diminishing marginal returns of Peak Oil: sure, there's still fossil fuels to be had, it's just going to cost you more to get them.
posted by jefgodesky at 11:56 AM on June 26, 2006


Western Canada has no reason to leave because the current Prime Minister is their boy.

Why is it always about supplying Americans with oil. You guys could stand to lose a few pounds anyways. Just saying.
posted by dobie at 12:23 PM on June 26, 2006


That's never actually been tested. The various referenda in Quebec never garnered enough support to actually move forward. Secession from Confederation could happen.

Well, it could happen in the sense that the southern states seceded from the Union in the 1860s, but any sane government in Ottawa would bring Quebec back (by force if necessary). And Quebec couldn't take the First Nations lands that make up most of the province, anyway—at least not without approval from the Crown or the governor general.
posted by oaf at 12:25 PM on June 26, 2006


any sane government in Ottawa would bring Quebec back (by force if necessary)

Oh, that's a great idea. Trudeau sending in the tanks is what got us in this mess to begin with.
posted by CynicalKnight at 2:19 PM on June 26, 2006


I think "invasion" is not the way we should be looking at this. Instead, we should be "liberating" the western provinces from eastern Canadian tyranny. - Ber

If that's your approach, you might get some support in Alberta. Alberta's Premier has been increasingly calling for more provincial autonomy, closer to the power the states are allowed. This is part of the promise that our current Prime Minister has campaigned on, and it's hoped that this will prove to be popular in Quebec as well. To what extent these promises will be deilvered on, particularly in a minority goverment, remains to be seen.
posted by raedyn at 2:49 PM on June 26, 2006


ny sane government in Ottawa would bring Quebec back (by force if necessary)

You sniffing glue? Seriously. Quebec wouldn't leave until everything was all signed and shook on... you really think they would destabilise themselves with a unilateral declaration of independence? That's not how we do stuff up here, man.
posted by Meatbomb at 3:06 PM on June 26, 2006


Western Canada has no reason to leave because the current Prime Minister is their boy.

Ugh. He's not this Western Canadian's boy.
posted by btwillig at 4:37 PM on June 26, 2006


Zinger writes "Until that magic day that we get the 'killer alternative' source of energy in place, at which point oil will be worth less than mud."

Oil will never be worth less than mud. Long after we stop burning it oil will still be a valuable resource used as a feedstock for fertilizer, lubricants and plastics.
posted by Mitheral at 6:49 PM on June 26, 2006


I met a bunch of Canadians at a bar in New Orleans; they were going down to work on the Rigs for awhile. They said that they were giving away jobs up there to anyone with even half a leg. They pay was about 40 canadian per hour and they said if Meth and Canadian whores were your thing, Alberta was the place to be.
posted by afu at 8:31 PM on June 26, 2006 [1 favorite]


The oil price will continue to rise, and we'll be continued to be screwed.
posted by delmoi at 8:32 AM PST



Errp, thanks for playing.

Oil price rising isn't the screwing. The US Dollar, the Carter doctrine, the US Tax Code, and having unreasonably cheap oil in hte past are the screwing. High oil pricing is just an additional problem, but hardly the biggest source of screwing.

American are spoiled with the past of cheap oil and all it bought. Thoses days are over.
posted by rough ashlar at 9:23 PM on June 26, 2006


Besides everything else, shale oil

The calories in shale oil per pound are about the same as a potato per lb.

Just a little something to ponder.
posted by rough ashlar at 9:30 PM on June 26, 2006


In short, the economics of the oil based economy will collapse long before the supply of fossil fuels runs out.
posted by three blind mice at 9:19 AM PST


What will collapse 1st?
The US Dollar as the way oil trades are settled?
The inability to keep the JIT economy going?
A lack of food?
Overspending on 'defense'(or offense)?
posted by rough ashlar at 9:36 PM on June 26, 2006


could provide for america's oil needs for the next century.

Who is this 'america' of whom you speak?

The pay was about 40 canadian per hour and they said if Meth and Canadian whores were your thing, Alberta was the place to be.

Holy shit, I'm'a headin' back home!
posted by stavrosthewonderchicken at 1:48 AM on June 27, 2006


Western Canada has no reason to leave because the current Prime Minister is their boy. - dobie

Ugh. He's not this Western Canadian's boy. - btwillig

Nor this one. I don't hate Stephen Harper, just 99% of his policies.
posted by raedyn at 7:20 AM on June 27, 2006


Whether or not you like Stephen Harper and his policies, the Conservative party finds the bulk of it's support in Western Canada, and represents their issues accordingly. They might not be your issues, but that doesn't mean that they don't represent the majority of (voting) Western Canadians' issues.
posted by dobie at 7:57 AM on June 27, 2006


They might not be your issues, but that doesn't mean that they don't represent the majority of (voting) Western Canadians' issues.

I think you have to be careful here, there are many reasons why people voted for the Cons this time around, both "out west" and in other parts of the country. The reason the Cons squeaked out a win was from picking up more seats in rural Ontario.

It's folly to lump the west, at least politically, as an single entity. It's more acurate to say that Harper and his policies represent the majority of Alberta voters, rather than western ones.

BC is the only province that saw a reduction in Conservative Mp's. A lot of voters here (BC) are taking a wait and see attitude towards Harper. Many voted conservative to punish the Liberals... this support is soft, at best, and should not be considered as solid support for the Con agenda.

The Cons captured just 37% of votes in BC compared to 65% in Alberta. It illustrates just how diverse the politics of the west are.

I think a more relevant distinction to make is the rural/urban split amoungst voters, rather than an east/west divide.
posted by btwillig at 4:39 PM on June 27, 2006


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