Monday, February 13, 2006

The Side Effects Of Canadian Tar Sands

One of the more interesting things about the Canadian tar sands is that it's a petri dish for investigating techniques for dealing with heavy oil, something that came up in another Wall Street Journal article ($$$, sorry):
One of the heaviest types of oil is bitumen, a tar-like crude found mixed with grit in Alberta's oil sands. While oil sands are found in many countries, Canada's deposits stand out because they are the biggest, consisting of an estimated 1.7 trillion barrels of oil in place, though the amount recoverable depends on further technology improvements and whether oil prices justify the expense of a project. Alberta has become the world's proving ground for emerging technology for extracting and handling ultra-heavy crude at lower cost.

Canadian and international energy companies are prepared to pour as much as 100 billion Canadian dollars (US$86.7 billion) into oil-sands development over the next 10 years, if all the announced projects are built. Canada's top oil-industry research investors spent a total of C$272 million on research and development in 2004, according to Research Infosource Inc., of Toronto.

I wrote last month about the possibility of using some of these techniques in other circumstances, and the Journal surmises as much given the relatively small amounts of money the Chinese are committing to their tar sands projects, and the fact that the pipeline-to-the-Pacific that's been proposed as the primary transport mechanism is unlikely to be completed any time soon, if ever.
Peter Zeihan, chief analyst for global economic issues at private-intelligence firm Stratfor, Washington, D.C., believes China isn't likely to seek significant new oil supplies from Canada, partly because of logistics. "There's a reason why the pipelines run south and east from Alberta, not west," he said. More likely, he reckons, China will build pipelines to import more oil from its Asian neighbor Kazakhstan, and that it will invest heavily in new technology for producing and processing its own untapped oil resources.