Alberta warned not to change oil sands rules

[CHIMO]

CALGARY — Alberta can expect “a lot of backlash” if it attempts to impose new rules into future oil sands developments, warns one of the industry's biggest players.

Even changes that were designed not to affect existing oil sands producers would impact all companies since the multibillion-dollar investments require years of planning, Syncrude chairman Marcel Coutu said in an interview with The Canadian Press.

“People have geared up, have raised capital based on those rules for a very long time going forward,” said Mr. Coutu, who is also president and chief executive of Canada's largest income trust, the Canadian Oil Sands Trust.

Suggestions that Alberta should find ways to make big oil companies upgrade raw oil sands within the province — instead of exporting it — have recently come from retiring Premier Ralph Klein as well as numerous contenders who seek to replace him.

http://www.theglobeandmail.com/servlet/story/RTGAM.20061001.woilsands1001/BNStory/Business/home

Sakhalin Squabble Threatening Profits

KORSAKOV, Yuzhno-Sakhalinsk -- The concrete tanks and metal cranes of Sakhalin-2 rise incongruously from the forested shores of Sakhalin Island. Workers scurry around the sprawling plant putting the finishing touches to a project that will seek to harness the vast hydrocarbon riches that lie beneath the island's northern waters.

If the oil and gas starts flowing as planned in 2008, in a few years the state and the foreign oil majors running the $20 billion project stand to make billions of dollars annually. Yet a threatened halt to the project by environmental officials could send costs soaring even higher, and jeopardize both sides' profits.

Behind the dispute, many believe, is a disagreement over how large the state's share in the project should be.

Sakhalin-2, the only major energy project in the country without a Russian partner, is poised to become a key supplier to energy-hungry markets in Asia and the United States. With oil prices hovering around $60 per barrel, Russia stands to lose out on billions of dollars per year if it does not have a direct stake in the project.

http://www.themoscowtimes.com/stories/2006/10/02/002.html

Who would have guessed?

[hatrack]

1. Yeah, shocking, huh?

Amazing how concerned Russia's become about the environment lately. :eyes:

[CHIMO]

2. Yep

But Alberta is Texas North.

Harper tells U.S. audience 'Canada is back'

The prime minister did stress a few key business issues, telling the group they should have more appreciation for Canada's energy “superpower” status and persuade Congress to hold off on strict new identification requirements at the border.

http://www.theglobeandmail.com/servlet/story/RTGAM.20060920.wharper20_/BNStory/National

What the provience is saying is that it is not his oil to give away. Oil is a natural resource and is controlled and owned by the provience. So if he wants to dance he has to dance with the owner.

[Art_from_Ark]

3. Interestingly, the Japanese press has reported that development permits

for Sakhalin-2 have been cancelled and that for all practical purposes, this has shut down the project.

The Japanese article also mentions that the underlying reason may be that Russia wants to negotiate with Royal Dutch Shell to get a better deal for Russia.

http://72.14.207.104/search?q=cache:nAjcmZU-gVQJ:www.asahi.com/business/update/0918/034.html%3Fref%3Ddoraku+?????????&hl=ja&gl=jp&ct=clnk&cd=5

[daleo]

4. Would Bush invade Alberta?

Nothing would surprise me any longer.

[JanusAscending]

5. Don't know about that, but....

Cheney went up there for a visit not too long ago!!! Watch out Canada!!

[Javaman]

6. This is all very amusing...

The whole issue of the oil sands will be decided in a few years anyway.

In order to extract the oil from the sands, an enormous amount of water is needed to basically "blast" the oil out from the sand.

Several surveys have shown, that if that area ever had a major drought, the question of whether or not to extract the oil from the sands would be decided.

Given global warming water will become a major issue.

I don't foresee Canada sacrificing their water (which will suddenly be worth a lot more money in the very near future) for oil.

Over the past 2 years of development, the oil sands project has doubled in cost and have yet to produce a sizable amount of oil for use. And won't for quite sometime.

Currently the price to extract 15 barrels of oil from the ground in, oh say, Saudi Arabia costs 1 barrel of oil. That's down from an extractable amount of 30 barrels in the mid eighties.

And oil sands is nothing like pumping oil from the ground. It's a far more energy intensive process.

So do you honestly think that they will piss away all their water in that area to extract maybe 3-5 barrels for every one barrel spent at the cost of loosing a major water source? I don't think so.

We are heading for interesting times.

Oh and one more little interesting insight, if there is still sooooo much oil left in the world as the oil companies want us to believe, why are they going after something that is so incredibly costly to extract? Riddle me that one Batman.

[SenorSanchez]

7. You right its not cheap but

this country needs oil. This forum doesn't exist without oil. Our computers don't exist without oil. Our lifestyle doesn't exist without oil. I can deal with paying 2-3 dollars of gallons for gas. Canada does have a ton of water.

[Javaman]

8. Have you read up on the extent of what the environmental damage

will be?

I will gladly conserve.

The U.S. uses 25% of the worlds oil and we only have 5% of the pop.

Yes, the world as we currently know it, runs on oil, but you know what, it can also run on a lot less oil.

We are going to run out, fact of life. The better we prepare the better off we are going to be.

The oil from the oil sands right now will produce 3-5 barrels of oil for every barrel expended, but it won't always be that way.

And as far as the water, read up some time as to the location of the oil sands, and how much water is in that area.

There is a local river that will currently provide what is needed, but that same water is also needed to provide for the locals for drinking and washing.

Once that runs out, the rest will have to be piped in and this is were it will become diminishing returns to mine the oil sands.

A cost analysis of that regions states that once the river runs low or dry, the cost to get on barrel will first be 1 to 1 then will drop from there, because a water pipeline will need to be constructed to that area.

In the mean time the environment will be destroyed.

We are now entering into the "squeezing the last drops of easy oil from the stone" era.

If the oil companies are now going after the hard to get stuff, that is certainly not a good sign.

We are headin for some very VERY interesting times ahead of us.

[SenorSanchez]

9. Your right when oil sands are expensive but

oil sands become profitable when oil prices reach above 40 dollars per barrell. They are much higher than that right now and should stay that high. The market will determine if oil sands are profitable. When they are not profitable it is a win-win situation for the consumer because gas prices will be low. When they are profitable they provide more oil on the market that helps lower prices. This country and the rest of the world will continue to use oil until another more profitable enery source comes online, which could be sooner than later especially with all the alternative energy hype. Ethanol is definitely not the answer though. Even though the US has ample crop land to produce enough for moderate consumption, but it can not replace oil. Technology will solve the oil crisis. The environmentalists will not.

[Javaman]

10. The point is not profit...

You seem to miss the whole point about an environmental disaster waiting to happen.

At at what point to we say enough?

"this country and the rest of the world will continue to use oil until another more profitable energy source comes online, which could be sooner than later especially with all the alternative energy hype."

Oil gets the most bang for it's buck, there will never ever be a type of energy storage system that oil has provided. It has the capacity to refine into parts far exceeding it's initial size. It's basically concentrated energy.

Nothing in this earth or outside of this earth has proven to show that kind of use. And if anything is found outside the earth, the cost of extracting such a mysterious energy source will be astronomically high. Just a fact.

Hoping that some other alternative energy will fill oils shoes is like whistling past the grave yard.

The reality is this: unless we start conserving now, not later, we as a world are screwed.

Anything becomes profitable to produce when quantities of the item are low and people demand more of it, but the fact is, the easy oil is just about gone, getting the hard heavy stuff will become extraordinarily difficult and much more expensive to extract.

Have you actually read anything regarding the "newly discovered" jack fields in the gulf? They were discovered earlier this year and not just last month. The technology just isn't there to get to that oil. And projections have it, that by the time it does exist, the amount of oil that that field will produce will be on the measure of about 35 days.

Of the 23 major oil fields in the world 18 are in decline. Read up on Kuwait's and the Mexican oil fields.

Squeezing oil out of the oil sands and tar sands isn't going to amount to a whole lot.

People keep saying, "oh that will be the magic bullet", the answer to that is, hahahaha, the amount of oil that will be extracted from those fields with the best technology, will only be a drop in the bucket. Why? because it is so difficult to extract. It costs a fortune, not only in money, but in water, in the effect upon the environment and air pollution. And for what? A percentage of the U.S.'s total need of roughly 1.5%? We could conserve that much without blinking an eye.

The continual use of oil in our society is a freight train going down hill with no brakes.

Unless we make a conscious effort to conserve, build in wind, solar and tidal power before all the oil is gone, we are screwed.

"Ethanol is definitely not the answer though. Even though the US has ample crop land to produce enough for moderate consumption, but it can not replace oil.

Of course ethanol is not the answer but do you realize that ethanol even at maximum capacity, if we used every available acre of land that currently produces all of our food in this nation, ethanol would only cover 25% of our fuel needs. That's far from moderate. And that's at current numbers, it doesn't take into account growth. Currently, if we were to only ramp up to what is available and not use all the land, ethanol would only take care of maybe 10 - 12% our our needs. Still a very far cry from moderate. And considering that that type of energy is reliant upon good weather; as global warming increases, forest fires and drought will become more common.
Also, erosion. As with most crops, after the harvest, the stalks are plowed under to proved nutrients to the soil. With ethanol production, those same stalks would be used for fuel. The degradation of the soil over time would leave the fields fallow. Also, due the nature of growing corn, it will cause massive amounts of erosion. Also leaving fields fallow.
And what is the fertilizer made from that grows that corn? I'll give you three guesses.

"Technology will solve the oil crisis. The environmentalists will not."

Explain to me how Technology will solve the crisis? I would love to hear that one.

Or are you one of those people that honestly believe hydrogen will fill the gap??? Hydrogen production is at least 25 years away. If we are lucky. However, if you do believe that, how do you expect to get that hydrogen? Right now, for the volume we would require, it comes from coal.
And if you are also one of those people that believe in the concept of "clean coal", there is no such thing. If you can find a way to sequester sulfur and mercury (I'm not even going to go into C02), I would love to hear it.

Environmentalists are about the environment and keeping it clean. It just so happens that environmentalists care about sustainable resources that don't pollute our world. I bet you hands down, if there was a way to use oil that was clean and didn't pollute, I'm sure you would find that the environmentalists would be for it.

If you fear that helping the earth while having a cleaner form of energy is a bad thing. That is a very skewed perspective.

Conservation is our only hope. Whether you like that thought or not, that's reality.

If you look at the history of the world, the era we live in is due in no small part to oil. Population growth, industrial growth, advances in medicine, wars, the collectivization of money, etc are all because of oil. We are living at this moment because of it. If you look at a chart that displays the progress and population of the world up until the turn of the 19th century you will see a very shallow gradual climb, however, once you get to the point when oil refineries were put online, there is a dramatic up surge in everything. Oil is finite. And once past peak, that spike that was caused by oil will recede. And unless we start making some real changes it's that line on that graph will plummet.

Unless we start exploiting wind, solar, tidal, biomass and start some serious conservation, we as a world are in for a very rude awakening.

[SenorSanchez]

11. Technology has always solved our problems

Technology invented new and faster ways to extract oil. Our oil production would have peaked in the 1980s if steam injection would not been invented. Deep water drilling, horizontal drilling, and Sesmic graphing have vastly increased oil reserves. New technologies are allowing us to drill in extremely deep water to find new sources of oil. The prime example of that is the Gulf of Mexico. There have been over 10 oil crisis in the United States. All of them proved false. Now I agree eventually we will run out of oil, but its not going to happen for quite some time. High prices will be our savior. High prices will increase investment in exploration, which will increase reserves. There is still plenty of areas in the world that haven't been fully explored yet such as Iraq, Iran, Alaska, Canada, the continental shelfs off the coasts of the US, Siberia, the Artic Ocean, the Caspian Sea region, the Gulf of Mexico. Iraq could have enormous production potenial with the proper foreign investment, which will come in time. Iran with new foregin investment to return to its peak production. Alaska has enormous production as well, but environmental issues are slowing that production. Canada obvisiously with the tar sands. Siberia was enormous production potenial as well, but Putin likes to drag his feet and shut down private oil majors in Russia. OIl prices would be about 30 dollars per barrell if Yukos was still around. The Caspian Sea will have new oil production coming online over the next few years and more discoveries are being made every year. The Artic Ocean could hold billions of barrells of oil, but extraction could be difficult. I know that the Greater Cantrell field in Mexico has peaked, but Mexico just discovered a new major field. Kuawait trimed back production on there Greater Bergen field, but only by about 200,00 barrels. New oil production from Saudi Arabia and Iraq could easily replace that amount.My point is the time will come when peak oil arrives, but that day is not today.

When it comes to electricity production. Nuclear power is a great options for the United States. It is extremely clean, except for radioactive waste, which can be reprocessed. France is great example of nuclear power working. Uranium is safer than most power sources, but people are mainly scared of it because they can't see or feel when a plant melts down. We have come a long way from 3 mile island and I would feel perfectly safe living next to a nuclear power plant. The United States is the Saudi Arabia of coal. Now coal isn't the cleanest energy out there, but it is one of the cheapest. Conservation alone does not find new sources of energy. You basically think we are doomed when the last bit of oil comes out of the ground. I am much more optimistic. If we could ever harness nuclear fusion, our problems would be solved, but that could be ways away. Electricity production is not the problem, transportation enery is. Humans have always been a relisent race and we always find a way to beat our problems.

[Javaman]

12. And it has caused a great many of them we have today...

(Love your run on sentences. Do me a favor and please use spell check.)

Okay point by point.

"Technology invented new and faster ways to extract oil."

-Oil companies are using the same technology to find and extract oil as they did in the 1970's. It hasn't changed a whole hell of a lot since then.

"Our oil production would have peaked in the 1980s if steam injection would not been invented."

-Oil production in the U.S. peaked in 1973. it was at that point we had to start importing oil.

(Do you only spout off oil company talking points or do you ever do any research?)

"Deep water drilling, horizontal drilling, and Seismic graphing have vastly increased oil reserves."

-There has been no new large oil discovers on the same par as the last large oil field in Saudi Arabia in the last 35 years.

"New technologies are allowing us to drill in extremely deep water to find new sources of oil.
The prime example of that is the Gulf of Mexico."

-The oil that was found in the deep water in the gulf was a test drill. Do you have any idea of the temperatures and pressure oil is under at that depth? The average temp of oil at 1 ocean mile plus 5 sediment miles is roughly in the range of 285 degrees. The equipment and technology for drilling at that depth to extract that oil, has yet to invented.

"There have been over 10 oil crisis in the United States. All of them proved false."

-actually the "oil crisis" that the U.S. has experienced that you have mentioned happened, the majority of the them, prior to 1973. They were geopolitical crisis. Shall I list them? The only other crisis that has happened after 1973 was the 1981 oil embargo. Geopolitical. And Katrina. Natural disaster.

"Now I agree eventually we will run out of oil, but its not going to happen for quite some time."

-we aren't going to run out of oil, the concept of peak oil is based on easily extractable oil. After which, the oil that is left, is low grade thick heavy oil which is harder to extract because when sea water is injected to help it rise to the surface, there is a much greater chance of the oil being ruined. oil industry execs one month ago stated that we have roughly 140 years of oil left. Now think to yourself, how long has the world been using oil...give up? roughly 140 years since it was "discovered" in Titusville, PA in 1858, that my friend would put us at PEAK.

"High prices will be our savior. High prices will increase investment in exploration, which will increase reserves."

-High prices have lead to one thing, the improved development of alternative energy and hybrid cars. Pouring money into exploration hasn't found any more new fields. The gulf fields have long been known to exist. For as long as 40 years, but as like now, the technology then wasn't able to extract it.

"There is still plenty of areas in the world that haven't been fully explored yet such as Iraq, Iran, Alaska, Canada, the continental shelfs off the coasts of the US, Siberia, the Arctic Ocean, the Caspian Sea region, the Gulf of Mexico."

-Since your such a fan of technology, you would also realize that in the 30 years since U.S. peaked, the Dept of Agriculture and the Dept of Interior, in joint cooperation with OPEC have launched a series of geocentric satellites to search for oil. So far, other than the already know existing fields, only a handful have been found. All of which, with the rapid expanse of development in china and in india don't amount to more then a few months to as much as a single year at current rates to cover need. At the rate china is going, in the year 2020 the world will requires 5 fields the size of Al Ghawar to be put on line each year in order to cover the worlds needs.

"Iraq could have enormous production potential with the proper foreign investment, which will come in time."

-in late 2004, Iraq's field were down graded to poor. Why? because of the years of sanctions, lack of spare parts and very poor equipment, many of the huge fields have gone foul. Poor pumping practices have "muddied" the oil due to inefficient sea water injection methods. They best they can hope for is a 10-15% return on the fields.

"Iran with new foreign investment to return to its peak production."

-The U.S. gets no oil from Iran. So what's the point in the foreign investment? And with the worlds majority of oil fields in decline what good would Iran's fields do in the long run?

"Alaska has enormous production as well, but environmental issues are slowing that production."

-Have you actually read how much oil is in the new Alaskan oil fields? By the time it actually gets online, (remember, nothing has been drilled there yet), it will be at the earliest 2015. If the oil companies are lucky. It will yield less than what the new jack oil field will yield. Rates have been estimated upon growth and demand of the worlds economy at roughly 2 to 3 weeks of oil.

"Canada obviously with the tar sands."

-I addressed this in my previous email, which you obviously failed to read.

"Siberia was enormous production potential as well, but Putin likes to drag his feet and shut down private oil majors in Russia."

-Please provide me with evidence that Putin closed down the oil fields. I would love to see that. All indications is that Putin sells primarily to Europe and to Asian nations. Our amount of oil we get from them is very small and would have little effect upon the price here. Putin never shut them down, he made them state owned. Big big difference.

"OIl prices would be about 30 dollars per barrel if Yukos was still around."

-read my above reply.

"The Caspian Sea will have new oil production coming online over the next few years and more discoveries are being made every year."

-the Caspian has a large proven reserve however, due to geopolitical issues, it won't be online anytime soon. Read Iran. There are several routes by which a pipeline can be constructed to carry the oil. All of the primary routes by which a pipeline would originate aren't friendly to western powers. Also, we are not the only country that is interested in it. The most easy and viable route goes through China. Who do you think is working deal with the break away republics in the Caucus region? It ain't us.

"The Artic Ocean could hold billions of barrells of oil, but extraction could be difficult."

-it also could hold nothing. No one knows. And realistically if we ever got to the point where we actually have to drill in that region, we will have bigger issues to deal with. That would be the mark of desperation. You think drilling in the gulf would be difficult? I wouldn't hold a candle to the Arctic where temps average in the 50 below region for a good portion of the year.

"I know that the Greater Cantrell field in Mexico has peaked, but Mexico just discovered a new major field."

-did you read the follow up on that new field? Their first estimate as 15 billion, it has now gone down to around 3 billion. That's a gigantic difference and won't do a whole lot of good in the long run when it's finally on line.

"Kuawait trimed back production on there Greater Bergen field, but only by about 200,00 barrels."

-Kuwait released a report 3 weeks ago after doing an extensive audit on their fields and announced they have peaked and are now in decline.

"New oil production from Saudi Arabia and Iraq could easily replace that amount."

-I replied about Iraq above. Saudi Arabia was at pumping capacity as of 2 months ago. Nothing new from them.

"My point is the time will come when peak oil arrives, but that day is not today."

-nope not today, but in about 5 years. Or as many have said, we are currently at plateau and in 5 years will begin the slow dive.

"When it comes to electricity production. Nuclear power is a great options for the United States."

-recent inventory of the world uranium production will peak in roughly 75 years. It won't last forever, just like oil.

"It is extremely clean, except for radioactive waste, which can be reprocessed."

-yeah that pesky waste. As it stands now only a very small percentage of the worlds nuclear powered nations reprocesses waste. We don't. So perhaps conservation, which, deals with reprocessing waste could be a solution, who would have thunk it??? You seem to have an odd view of what environmentalists believe in.

"France is great example of nuclear power working. Uranium is safer than most power sources, but people are mainly scared of it because they can't see or feel when a plant melts down."

-Yeah, that Chernobyl was a bitch huh? whole abandoned cities not inhabitable for 50,000 years, but just think of what real estate will go for when that passes, huh?

"We have come a long way from 3 mile island and I would feel perfectly safe living next to a nuclear power plant."

-Actually we haven't, the reason why France is using Nuclear reactors is because they use breeder reactors which is very very safe. But anything is only as safe as it's safe guards. Here in the U.S. a new plant hasn't been built in 25 years, and they are of those problematic old versions. I wouldn't in my life live next to one if my life depended on it. The type that was profiled in the "china syndrome" and the real life almost melt down at 3-mile island are still in use. Both here and in Russia.

"The United States is the Saudi Arabia of coal. Now coal isn't the cleanest energy out there, but it is one of the cheapest."

-if you can find a way to eliminate the heavy metals being spewed out of the coal power plants by the millions of tons daily, more power to you. But until there is a way to limit it, we will continue to breath in a Host of heavy metals daily.

"Conservation alone does not find new sources of energy."

Well, are you mad at the conservationists or the environmentalists. Conservation is just that, call me kooky, but it has nothing to do with finding new energy sources, it has everything to do with the conservation of what we have. By making it last longer until a proper alternative is put in to place. At the rate we are going, there will be an energy gap in out life times.

"You basically think we are doomed when the last bit of oil comes out of the ground."

-I never once said we are doomed what I have said if we continue to live this fantasy that some miracle technology is going to save us we are going to be very disappointed. I stated this in my first email. We use 25% of the oil yet have only 5% of the population. Conservation will save use period. We are an alcoholic in a liquor store. But the liquor is running out and we have to cut back on our overly bloated indulgence. We have to change the way we live, if we don't we are in for a very rude awakening.

"I am much more optimistic. If we could ever harness nuclear fusion, our problems would be
solved, but that could be ways away."

-As mentioned in the Journal Science. Fusion is possible but not in our lifetimes. Thus that type of technology will not save us, thus conflicting with your statement that technology will save us.

"Electricity production is not the problem, transportation enery is."

-However if you don't have an energy carrier, production doesn't exist.

"Humans have always been a relisent race and we always find a way to beat our problems."

-I believe that as well, and the tools are right in front of us, the problem is not a matter of figuring it out, it's a matter of changing the way we live. Our oil soaked society can not be sustained at the level it's going at. It's impossible. We have solar, we have wind, we have biomass and we have tidal. Whole nations are switching over to these alternative energies, why can't we? Because we are Americans? That argument falls apart really fast.

And this gets back to what I said in my previous email, our issue of peak oil and it running short is less about where we are going to get new energy from, it's all about a social change. Until we understand that the golden age of oil is coming to a close things will indeed be very bleak.

If however you bend with the wind, many many opportunities open up for all sorts of new industries.

We will adapt and find a new path. Humans are remarkable that way, we just have to stop being such oil pigs.