Wednesday, June 22, 2005

Guess Again

The moment you start talking about serious energy problems, some idiot is likely to pipe up with the supposed solution:

"What about the tar sands? There's a trillion barrels of oil there, smarty pants! We'll be running Chevy Suburbans FOR EVER!!!"

Or something.

Well, there are a number of problems with the tar sands. First and foremost, they take much more energy to make then you get in the final product. This isn't necessarily a deal breaker - every bite of meat you've ever eaten was not a terribly efficient energy source. But with tar sands, where the necessary energy is heat, and lots of it, the only options are a) using lots of increasingly scarce natural gas, or b) nuclear power. Using clean, efficient methane to make dirty, inefficient gasoline should probably be illegal, and I'd be surprised if Albertans wanted several new nuclear power plants so that Toronto can keep driving SUVs.

In any case, legendary oil prospector Boone Pickens agrees with the non-idiots on this one: Alberta is not going to save us. Basically, it costs too much for too little supply - Boone estimates over $300 billion dollars for 9 million barrels per day of production - quite a bit more than we get thus far out of Alberta. To deliver all of our current global demand (not a serious proposition by any means) we'd need trillions in investment dollars that simply aren't there.

And how bizarre is it that $300 billion is a reasonable amount for the private market to spend on oil, but a similar sum spent by the government to save oil would have newspaper editorial boards screaming about Communism and creeping fascism? Never mind the almost $200 billion spent to ruin the lives of brown people with funny names...


Anonymous said...

It cost $12 to get a barrel out of the oil sands. So now they are at $60 what do you think?

It cost $1per barrel for the oil to come out of the sand in the middle east.

I still think the margins in northern Alberta make a good business case.

Psychols said...

Good post on the oil sands. There are rumors floating around here (in Alberta) that we might be willing to locate those nuclear power plants in Saskatchewan. How ironic it would be if rechargeable fuel cells capable of powering vehicles become a reality. Saskatchewan might just become richer than Alberta selling electricity directly to the United States.

The oil sands are no long term solution. In the short term they will probably keep Alberta viable, but I think this can be measured in decades, not centuries. The reality of global warming is such that regardless of the availability of fossil fuels (or lack thereof), we all need to decrease our reliance on the internal combustion engine.

john said...

Anonymous: The question isn't whether it makes economic sense - you're right, on a simple dollar comparison, tar sands make sense. But the tar sands can never (ever) produce enough oil per day to meet a large percentage of global demand. Most people think 2 million barrels per day is the most we can do in Alberta - and the world currently uses 40 times that.