Friday, June 30, 2006

Canada's Oil Sands are not "Endless Oil".

Even the most optimistic scenario does not figure Canada's Oil Sand industry as a source of salvation from Peak Oil. If a crash extraction programme were implemented instantly - hey presto; poof! - it would most likely just about offset the fall in conventional "crude" production from Canada and the North Sea. This is the conclusion of a report by Robert L. Hirsch and his co-authors, "Peaking of World Oil Production: Impacts, Mitigation and Risk Management," which makes clear that Peak Oil is an unavoidable reality and if drastic and global action is not taken rapidly, the world economy is headed for dire straits. An analysis of this report has been made by The Uppsala Hydrocarbon Depletion Group based at Uppsala University ("A Crash Program Scenario for the Canadian Oil Sands Industry"), with the aim to determine what production levels might sensibly be expected from this resource, focusing on the periods 2006-2018 and 2006-2050.
It must be borne in mind that the Oil Sands do not contain "oil", as such, and are best described by the synonym, "Tar Sands", since they contain bitumen ("Tar") which has to "cracked" in order to decompose it into oil. This requires heating the material to several hundreds of degrees centigrade, and is therefore an energy intensive process in its own right. A rule of thumb is that it "takes one barrel of oil to produce one barrel of oil", which errs on the side of pessimism since the figure is nearer "two barrels to produce three more". Nonetheless, in terms of EROEI (Energy Returned on Energy Invested), this is not great, at 1.5 (3:2), and it is thought that 3 is the limit below which extraction of an energy resource is not worth the effort or expenditure of existing resources (See previous posting "You Need Energy to get Energy - Time is Running Out.").
Therefore, there lies a fundamental issue of what fuel might be used to empower any putative oil-sands programme. There is insufficient natural gas in Canada to support such an enterprise on top of the nation's other dependences on it. Bitumen itself can be used as a fuel (rather like coal), but that doesn't really square with acknowledgement of the Kyoto treaty. Nor, necessarily does burning any of the oil that is extracted, but this is a separate issue, and working within any set limits on CO2 emissions will rely upon the sum of natural and imported crude oil and its products, along with what may be garnered from the oil sands themselves. It seems that for any practical, long-term production of "tar-oil", investment in new nuclear facilities will be necessary to generate energy at-source for the projects. However, there is no chance that "Peak Oil" will be thus averted.
Analysis of a short-term crash programme indicates that a production level of 3.6 million barrels/day might be attained by 2018, and a long-term such programme could yield about 5 million barrels/day by 2030 (in 2005, 1.1 million barrels per day were produced). These figures may be compared with the monolithic world daily oil consumption of almost 90 million barrels, and rising - a staggering deficit, even at best. It is likely that the quantities of oil produced from Canada's sands will do no more than compensate for the declining output of oil in Canada and the North Sea, during these projected periods. Today, with the exception of ultra-deep off-shore fields, 54 of the world's 65 oil producing countries are already over the peak in their production and are in a state of irrevocable decline.
Whatever course we decide upon it must involve breaking our dependence on oil - otherwise it will break us!

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