tar sands

Tar sands fever

Via GCC, the Canadian Association of Petroleum Producers has announced that by 2020, Canada will be producing almost 5 million barrels of oil, almost all of that being from tar sands.

This explains, in large part, why Canada has opted for empty symbolism: We've hitched our wagon to the tar sands, come hell and high water. I'm actually pretty sympathetic to our new Conservative government, who at least made their disdain for Kyoto honestly known. The previous Liberals were happily pursuing the same policies while pretending to care about Kyoto.

Driving less is great, but producing more oil is a less-desirable reaction

In this post, David echoes what seems to be conventional eco-wisdom on high gas prices:

It's good that gas prices are rising. We want people to buy more fuel-efficient cars and drive less.

I'm not so certain.

New scheme for OPEC would make Venezuela’s oil reserves world’s largest

There's some big stuff happening in Venezuela these days. In an interview with the BBC, President Hugo Chavez announced a bid that could change the entire world oil situation. He wants OPEC to set its long-term oil target price at $50/barrel. Why? At $50, large portions of Venezuela's copious heavy crude in the Orinoco Tar Sands become economically viable, and Venezuela's official oil reserves automatically skyrocket to 312 billion barrels -- surpassing Saudi Arabia's 262 billion, currently the world's largest.

This would raise OPEC's production quotas, bring in a bucketload of new revenue to the Venezuelan government (which just renegotiated more favorable terms with several oil companies, and seized oil fields from two companies that refused to cooperate), and dramatically increase the country's influence and Chavez's stature.

The best summary I've seen is this one from Motley Fool:

The dirty truth about Canada’s famed oil sands.

[W]hen Canada announced in 2004 that it has more recoverable oil from tar sands than there is oil in Saudi Arabia, the world yawned. There is estimated to be about as much oil recoverable from the shale rocks in Colorado and other western states as in all the oil fields of OPEC nations. Yes, the cost of getting that oil is still prohibitively expensive, but the combination of today's high fuel prices and improved extraction techniques means that the break-even point for exploiting it is getting ever closer.
--From "The Oil Bubble," Wall Street Journal editorial, Oct. 8, 2005

Actually, with oil prices nestled comfortably above $60 per barrel, the oil giants are tapping Canada's famed tar sands, as this interesting NYT piece by Clifford Krauss shows.

"Deep craters wider than football fields are being dug out of the pine and spruce forests and muskeg swamps by many of the largest multinational oil companies," Krauss reports. "Huge refineries that burn natural gas to refine the excavated gooey sands into synthetic oil are spreading where wolves and coyotes once roamed."

Note well: They're burning natural gas to get at this stuff.

Krauss adds:

About 82,000 acres of forest and wetlands have been cleared or otherwise disturbed since development of oil sands began in earnest here in the late 1960's, and that is just the start. It is estimated that the current daily production of just over one million barrels of oil--the equivalent of Texas' daily production, and 5 percent of the United States' daily consumption - will triple by 2015 and sextuple by 2030. The pockets of oil sands in northern Alberta--which all together equal the size of Florida - are only beginning to be developed.

Be sure and click on the article's multi-media link comparing the environmental depredations of producing a barrel of artificial oil from sands with those of conventional crude production.

The only way this process can make economic sense for the oil giants is if they succeed in externalizing these costs -- i.e., shuffling them off of their balance sheets.