The Oil Rush

U.S. News & World Reports ^ | April 24, 2006 | Marianne Lavelle

[Daralundy]

How high-tech prospectors are trying to squeeze fuel--and fat profits--out of the earth while transforming the petroleum market

Much as the storied forty-niners trekked west in their covered wagons to seek a golden future, today a small army of workers boards a fleet of jets each week in Edmonton, Canada, and ventures north into a frozen frontier rich with promise. These latter-day pioneers don't have campfires, but they do have camps--comfortable dormitories with Internet kiosks, catered steak dinners, fitness centers, and satellite TV in every room. The creature comforts come courtesy of Canadian Natural Resources Ltd., one of a dozen companies that have descended upon the wilds of Alberta. The company is spending a fortune to build an enormous workforce in the far north, but it's a pittance compared with the profit it expects to pull out of the frozen ground. As long as the high price of oil continues to fatten corporate coffers, the rush will be on for a black gold called oil sands.

The Canadian sands yield fossil fuels nearly identical to those hidden below the drifting sands of the Middle East. But this mother lode lies in a unique geological formation just 500 miles north of the U.S. border, and it won't surrender its treasure without a lot of labor, vast amounts of energy, and oceans of water. It costs more to wrest a barrel of oil from the ground here than virtually anywhere else in the world.

What's happening in Canada today may be just the start of a new chapter in the world's long love affair with oil. Global demand, particularly in China and India, is outstripping supply--an imbalance that has been painfully evident as pump prices climb toward $3 a gallon. Even the optimists agree that the era of "easy oil" is over.

[Daralundy]

oil sands ping!

[1Old Pro]

I heard that there are thousands of domestic wells that were shut down because they could only make money if oil were at some outrageously high price like $50 a barrel.

(Isn't oil almost 80/bbl)

[Old Professer]

Sounds like a glazier spending the night before opening day going around town breaking out windows.

[fanfan]

[Dead Dog]

is outstripping supply--

Funny, but there isn't a problem with quantity of supply, it is the political uncertainties that are driving costs.

[Paladin2]

Apparently no one signs fixed price long term contracts anymore.

[OB1kNOb]

is outstripping supply-------- Funny, but there isn't a problem with quantity of supply, it is the political uncertainties that are driving costs.

Agreed with the political uncertainties issue, but after I read the following article a couple of weeks ago, I think the demand outstripping supply may be next on the horizon.

Oil Demand Could Outpace Saudi Production Capacity

As much as I've read about oil supply over the past few years, I don't recall the Saudi's ever being quoted on record as being worried about keeping up with demand. When they start voicing concerns, I take that as a big red flag. JMO - OB1

[mattdono]

That is the "throw in" explanation.

The costs are high because:

1. Most of the OPEC countries do NOT have our national interests in mind
2. The people of the United States keep buying the enviromental lies that are repeated day after day.
3. We have a President who doesn't have the b*lls to tell all his political foes, who would rather see him run over by a gas truck, to go F' themselves and start drilling in Alaska and open up the Gulf of Mexico
4. I have a governor who is more worried about environmental protections then he is in the gas prices his citizens are paying. (Mind you, I live in Gainesville Florida and gas is 2.89 for regular and 3.09 for premium). Thanks, Jeb.

Saudia Arabia, the country that spawned 15 of the 19 terrorists won't do sh*t and Qatar has just told us today, "Sorry, there's nothing we can do".

So, while "political uncertainty" might have something to do with it, it is hardly THE cause of outrageous gas prices.

[GMMAC]

I read somewhere that once oil passed & stayed above $30 USD per barrel many old wells would once become cost-effectiive to operate.

Not that the msm will likely want to point this out if such is proves to be the case but, most times - particularly in the energy sector - when anything seems not to make logical sense, one needn't look any further than government and/or the enviro-whackos to confirm the reason why.

[patriot_wes]

Oil from Coal --- Free! The Karrick LTC Process

http://www.rexresearch.com/karrick/karric~1.htm

http://www.tomvalentine.com/html/karrick2.html

The process was perfected by Lewis C. Karrick, an oil shale technologist at the U.S. Bureau of Mines in the 1920s. LTC is a pyrolysis process that involves heating coal, shale, lignite, or any other carbonaceous material, including garbage) to about 800o F. in the absence of oxygen. Oil is thus distilled from the material, rather than burning as it would if oxygen were present. After treatment by the Karrick process, a ton of coal will yield up to a barrel of oil, 3000 cu. ft. of rich fuel gas, and 1500 lb. of solid smokeless char (semi-coke). The economics of the process are such that the oil is obtained for free! The smokeless char is an excellent substitute for coal in utility boilers, and for coking coal in steel smelters. It yields more heat than raw coal, and it can be converted to water gas. That gas can be converted to oil by the Fischer-Tropsch synthesis-process. The coal gas produced by Karrick-LTC yields more BTUs than natural gas because it contains a greater amount of combined carbon, and there is less dilution of the combustion gases with water vapor. The phenolic wastes are used by the chemical industry as feedstock for working up into plastics, etc.. The process produces no pollutants other than carbon dioxide.See links above for rest of the story!

[FreeRep]

I could see nuclear power plants used to help the oil sands and coal gasification process. Look at the Northern Rocky Mountains States, and High Great Plains region USA/Canada, they have abundant uranium, oil sands, natural gas, coal bed natural gas, and coal and oil-shale and nuclear resources, so vast as to supply America/Canada energy needs for at least 300-500 year to around $100 trillion.

[USFRIENDINVICTORIA]

During the "oil crisis" of the '70s, higher prices actually reduced supply, in some cases. Some oil companies tried to game the crisis -- betting that prices would keep going up. They reasoned that they were better off keeping the oil in the ground, waiting for higher prices; rather than pumping it up as quickly as possible.

[Fair Go]

The sooner the West stops relying on oil from the Middle East the better. However, oil supplies are finite and the need to develop alternatives is upon us.

[OregonRancher]

Kuwait: Burgar field, 2nd largest/world: Last year
2.1 mb/day. Now, 1.7 mb/day.Max pumping now.

Mexico: Cantarell field, 4th largest: Now 2.1 mb/d;
projected yield '08 is 1.0 mb/d.

Saudi: Ghawar field, world's largest: Just announced by
Oil Minister that production will decline by 8%.

No body caps a producing well that is profitable. Never, you could be dead next week.

[OregonRancher]

Better learn to do basic research. The tar sands will be using their own oil for heat when their natural gas gets to expensive for them. At that point, it will take two out of every three barrels of oil recovered. Plus, water is already becoming a big problem up there.

I leave on June 1st for High Plains, Alberta and will again see first hand what's going on.