This blog aims to inform and educate people on the major challenges facing the future of the Alberta oil sands as a major domestic petroleum source in the 21st century.
For over 200 years Canada has known about the existence of the oil sands. Canadians, throughout the nations short history, had forecasted its great potential for the future of the global energy supply. However, it took until the beginning of the 21st century for the global factors to align just properly for the oil sands to move from a dream worth dreaming to a dream worth chasing.
So what events occured that kicked off the oil sands rush. Oil exploration, production and services companies needed to have two things happen: The technology had to improve and the price of oil had to go up. In the early 1990s, a simple switch helped to solve the first problem. Companies went back to using enormous dump trucks – as big as a two-storey house – to haul out the sand, rather than conveyer belts, which were difficult to move when needed and often froze in the northern cold. At Suncor, this yielded immediate results: Energy requirements were reduced by 40 per cent and the overall cost per barrel was slashed by several dollars.
Syncrude also fared better after it figured out how to transport the bitumen more cheaply by sending it through pipes as a watery slurry. Even with the price of oil bouncing around $20 a barrel, the improvements were enough for both companies to turn a profit. But to the rest of the world, the oil sands might as well have been on another planet. The year Mr. George arrived at Suncor, they were producing about 350,000 barrels a day, a tiny fraction of what geologists believe the sands hold.
And how much oil is there? Estimates bounced around for years until 1999, when Alberta got serious about determining its potential. Based on data from 56,000 wells and 6,000 core samples, the Energy and Utilities Board (EUB) came up with an astonishing figure: The amount of oil that could be recovered with existing technology totalled 175 billion barrels, enough to cover U.S. consumption for more than 50 years. With the new math, Canada slipped quietly into second place behind Saudi Arabia's 265 billion barrels in oil reserves, followed by Iran and Iraq.
To the frustration of Albertans, nobody paid much attention. There was no war on terror and the world was awash in oil. The news “went virtually unnoticed,” recalls Rick Marsh, a geologist who leads the EUB's oil-sands section.
Then, in the spring of 2002, Murray Smith, recently installed as Alberta's energy minister, was called to a Saturday-morning meeting to review the EUB's annual report. He spotted the big figure and “his eyes lit up,' says Neil McCrank, then the board's chairman. “Murray is a salesman and he could see the impact this would have on Alberta. This obviously put Alberta in a different position on the world energy scene.”
The scale of bringing the oil sands into the pantheon of conventional oil is monumental. The construction of the Hoover dam is nothing compared to the scale of contructing the infrastructure that will enable the economical producing, upgrading, transporting and refining of the Albertan oil sands.
For over 200 years Canada has known about the existence of the oil sands. Canadians, throughout the nations short history, had forecasted its great potential for the future of the global energy supply. However, it took until the beginning of the 21st century for the global factors to align just properly for the oil sands to move from a dream worth dreaming to a dream worth chasing.
So what events occured that kicked off the oil sands rush. Oil exploration, production and services companies needed to have two things happen: The technology had to improve and the price of oil had to go up. In the early 1990s, a simple switch helped to solve the first problem. Companies went back to using enormous dump trucks – as big as a two-storey house – to haul out the sand, rather than conveyer belts, which were difficult to move when needed and often froze in the northern cold. At Suncor, this yielded immediate results: Energy requirements were reduced by 40 per cent and the overall cost per barrel was slashed by several dollars.
Syncrude also fared better after it figured out how to transport the bitumen more cheaply by sending it through pipes as a watery slurry. Even with the price of oil bouncing around $20 a barrel, the improvements were enough for both companies to turn a profit. But to the rest of the world, the oil sands might as well have been on another planet. The year Mr. George arrived at Suncor, they were producing about 350,000 barrels a day, a tiny fraction of what geologists believe the sands hold.
And how much oil is there? Estimates bounced around for years until 1999, when Alberta got serious about determining its potential. Based on data from 56,000 wells and 6,000 core samples, the Energy and Utilities Board (EUB) came up with an astonishing figure: The amount of oil that could be recovered with existing technology totalled 175 billion barrels, enough to cover U.S. consumption for more than 50 years. With the new math, Canada slipped quietly into second place behind Saudi Arabia's 265 billion barrels in oil reserves, followed by Iran and Iraq.
To the frustration of Albertans, nobody paid much attention. There was no war on terror and the world was awash in oil. The news “went virtually unnoticed,” recalls Rick Marsh, a geologist who leads the EUB's oil-sands section.
Then, in the spring of 2002, Murray Smith, recently installed as Alberta's energy minister, was called to a Saturday-morning meeting to review the EUB's annual report. He spotted the big figure and “his eyes lit up,' says Neil McCrank, then the board's chairman. “Murray is a salesman and he could see the impact this would have on Alberta. This obviously put Alberta in a different position on the world energy scene.”
The scale of bringing the oil sands into the pantheon of conventional oil is monumental. The construction of the Hoover dam is nothing compared to the scale of contructing the infrastructure that will enable the economical producing, upgrading, transporting and refining of the Albertan oil sands.
- Supply Costs
- Project Costs
- Natural Gas Supplies
- Electricity Requirements
- Fort McMurray Infrastructure
- Fort McMurray Population
- Markets expansion
- Light/Heavy Differentials
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