[Vision2020] Ga$oline Price$
cstorhok at co.fairbanks.ak.us
Thu May 3 10:55:03 PDT 2007
New extraction technology has really changed the economics of oil-sands
bitumen extraction. Until just last year the standard process for
recovery of the product was use of natural gas, for the most part the
newest extraction techniques no longer use natural gas but rely on a
combination of mechanical forces and solvents. Elimination of natural
gas from oil-sands production greatly slowed both the Alaska Natural Gas
Pipeline and the Mackenzie Delta Gas Pipeline projects. The Mackenzie
project is now dead and the Alaska project is on life support.
Also of note, Alaska has tremendous heavy oil reserves on the North
Slope, eventually these reserves will be tapped, treated, and shipped.
Light Crude production will drop in Alaska over the next two decades;
however once oil prices climb and consistently remain over the
$75/barrel the North Slope producers will begin heavy oil production.
North Slope reserves of heavy oil far exceed light oil and can again
fill the pipeline to 2.1 million barrels/day when production becomes
Significant untapped light oil resources within ANWR and Point Thompson
can again fill the pipeline; however, ANWR is politically unfeasible and
the Point Thompson Unit is tied up in court in a non-production dispute
between the State of Alaska and Exxon.
Hope all is well,
From: vision2020-bounces at moscow.com
[mailto:vision2020-bounces at moscow.com] On Behalf Of Mark Solomon
Sent: Thursday, May 03, 2007 9:33 AM
To: vision2020 at moscow.com
Subject: Re: [Vision2020] Ga$oline Price$
Geopolitically and environmentally I agree with you but the known extent
of the oil sands reserves in Alberta has grown dramatically since the
2001 data you've listed. The 2006 number for proven reserves is now 175
billion barrels with estimates of up to two trillion barrels buried
deeper than the easily removed proven reserves (for comparison, the
Saudi proven reserves are 260 billion barrels). Global warming-wise an
enormous disaster as recovery of oil from the sands is energy intensive.
Following is an excellent article on the oil sands. Subscriber access
only so am posting the text.
American demand on the rise
Alberta's crudest crude gets new respect as conventional oil wells start
Gordon Jaremko, The Edmonton Journal
Published: Thursday, April 26, 2007
EDMONTON - American industry is acquiring a taste for Alberta's crudest
oil product, oilsands bitumen.
"There's a lot of demand," Conoco-Phillips refinery chief Larry Ziemba
said in describing the outlook for oil markets in the United States.
Only five months after committing $5.3 billion to overhaul Texas and
Illinois refineries for bitumen, his firm is considering also switching
a Montana plant onto the new diet.
ConocoPhillips has plenty of company. BP has launched a $3-billion
bitumen conversion of an Indiana refinery. Marathon Oil Corp. is seeking
partnerships with Alberta oilsands developers to supply other American
UBS Commodities Canada Ltd., a subsidiary of a Wall Street financial
giant, recently launched a new international trading warehouse for
Alberta oil by leasing two million barrels of storage tank capacity at
Enbridge Inc.'s Hardisty pipeline hub 160 kilometres southeast of
Bitumen fuels a $2-billion plan by TransCanada PipeLines and
Conoco-Phillips, the Keystone Project, to build a new route for
shipments of up to 590,000 barrels per day from Hardisty to the central
Alberta's lowest-quality crude, diluted with higher grades to flow in
pipelines, will be a hot seller in the U.S. for decades to come, the
National Energy Board is told in a report supporting requests to approve
Keystone in time for deliveries to begin in 2009.
Exports of heavy-oil blends will increase seven-fold over the next three
years alone to about 350,000 barrels per day, says the survey of
Canadian and American industry intentions by Purvin & Gertz, an
international consulting firm.
Southbound bitumen flowing to the U.S. is forecast to top one-million
barrels daily by 2015, then keep on growing to nearly 1.5 million
barrels a day in 2020.
The accelerating traffic will overtake shipping space and cause capacity
rationing by 2010 on Canada's current seven oil export pipelines unless
Keystone builds its proposed new route, the study predicts.
Ziemba forecasts American thirst for oil products will grow at a rate of
10 to 15 per cent per decade. Washington's Energy Information
Administration echoes the ConocoPhillips executive's expectations in
long-range, national supply and demand projections.
The EIA predicts recent U.S. deep-water drilling breakthroughs will
raise production of premium, refinery-ready oil, but not by enough to
dull American appetite for Alberta bitumen. Flows from offshore
production platforms in the Gulf of Mexico are forecast to peak at two
million barrels per day in 2015 then slowly peter out as the new
conventional liquid oil pools deplete naturally.
U.S. needs for imports will rise 30 per cent to about 13 million barrels
a day by 2030 even though new American supplies of synthetic oil made
from coal and gas will also be developed, the Washington fact-finding
agency predicts. Production is steadily declining in the traditional
U.S. oil mainstays, Texas and Alaska.
Unless the energy industry breaks through environmental and political
walls preserving the Arctic National Wildlife Refuge, Alaskan output is
expected to shrink by 70 per cent over the next 25 years to 270,000
barrels daily. The entire state will pump out less than current and
still growing production by each of Alberta's two biggest oilsands
plants, Suncor and Syncrude.
OIL OCEAN DRIES UP
In Texas, where the century-old industry has no counterpart to the
oilsands or deep offshore drilling, output has dropped every year since
hitting a peak 3.4 million barrels a day in 1972.
The state slid below the one-million-barrels-daily production landmark
five years ago and is slipping steadily towards 900,000-barrels daily.
Replacement supplies from the oilsands flow as far south as refineries
in Beaumont near the Gulf of Mexico coast east of Houston, using
expanded and reversed pipelines that formerly made northbound deliveries
ConocoPhillips is pouring $1.4 billion into keeping alive a historic
81-year-old refinery in the legendary northwest Texas Panhandle oil
boomtown of Borger by converting the plant to process Alberta bitumen.
The molasses-like initial product of the oilsands is a bargain for
refineries equipped to dine out on it with added "upgrader" plants,
according to records of prices for Alberta crude varieties kept by GLJ
In 2006, the province's heaviest oil fetched an average $41.87 a barrel.
That was $31.29 or 43 per cent less than the average $73.16 for Edmonton
par, the Canadian counterpart to U.S. benchmark refinery-ready West
For Alberta bitumen producers, last year was an improvement.
In 2005, before pipeline changes reduced the quality discount by giving
exporters ability to shop around for the best available prices at new
export destinations, bitumen blends averaged $34.07 or 51 per cent less
than $69.11 for Edmonton par.
The traffic in low-grade crude is forecast to keep on growing even
though the wide value difference between bitumen and refinery-ready oil
spawned a $40-billion lineup of upgrader projects in industrial
districts northeast of Edmonton.
Projections of rising bitumen exports differ only in detail among
forecasters including the NEB, Canadian Association of Petroleum
Producers, Canadian Energy Research Institute and Strategy West Inc.
Oilsands production has potential to grow five-fold to 5.2 million
barrels per day by 2020 if all known development plans go ahead on their
announced schedules, show project inventories kept by Strategy West, a
specialist in the field founded by former CERI research chief Bob
Out-of-province sales of unprocessed bitumen would grow to 1.7 million
barrels daily because even the growing lineup of planned upgrader plants
is too short to process more than two-thirds of planned oilsands
THERE ARE LIMITS
Labour, materials and capital shortages are forecast to limit the
industry to three-fold growth.
Most-likely development projections predict total oilsands output of 3.3
million barrels daily by 2020, with the volume sold as raw bitumen
reaching at least 900,000 barrels daily.
Emerging environmental curbs on industrial carbon-dioxide emissions cast
a shadow on the outlook for bitumen upgraders.
NOT A GREEN ENDEAVOUR
The operations emit high volumes of the greenhouse gas. Canadian Natural
Resources deferred a 200,000-
barrels daily upgrader project planned for Edmonton or Cold Lake until
the federal and provincial emissions policies become clear.
But the industry shows no hesitation in advancing plans to increase raw
With support from oilsands developers, Enbridge this month made
construction applications for a $1.3-billion US pipeline to import light
byproducts of central U.S. refineries as "diluent" or thinner for
Output of Alberta's crudest petroleum product will hit 1.2 million
barrels per day by 2015, say new forecasts generated with an industry
survey done by Enbridge, which is Canada's biggest oil pipeline.
gjaremko at thejournal.canwest.com
HOW TO TURN CRUMBLY SAND INTO A MULTIBILLION-DOLLAR ENERGY INDUSTRY
- Oilsands ore: A crumbly, abrasive mixture of sharp-edged quartz grains
ringed by an inner layer of water and an outer layer of bitumen.
Two tonnes of ore make a 159-litre barrel of oil. To dig out ore
formations, oilsands mines also strip off an average two tonnes of rock
and soil "overburden" per barrel of production.
- Bitumen: One of the most complex naturally occurring substances,
composed of molecules containing more than 2,000 atoms each in the
heaviest oil produced commercially.
This initial product of oilsands operations resembles molasses at room
temperature, congeals to the consistency of hockey pucks if it cools to
11 C, and is thinned with lighter oil or natural gas byproducts to flow
Raw bitumen averages 83-per-cent carbon, 10-per-cent hydrogen and
five-per-cent sulphur, and contains traces of oxygen, nitrogen, methane,
hydrogen-sulphide, nickel, iron, vanadium, titanium and zircon.
- Upgrading: "Cracks" or breaks up bitumen molecules and reassembles
them as "synthetic" light oil cleansed of sulphur and other impurities.
Processes used include coking, hydro-treating, distillation and
Coking, the most common upgrading method, strips out the heaviest
bitumen ingredients with 500 C heat, leaving behind a charcoal-like
residue used as fuel, exported to steel mills and stockpiled.
Hydrotreating lightens bitumen by adding hydrogen. Distillation boils
off light liquids and gases. Catalytic conversion employs heat, beads or
pellets of other chemicals and hydrogen additions.
Upgraders are complexes of towers, vessels, pipelines, control networks
and safety systems requiring years to design and build by thousands of
engineers and skilled construction personnel.
Plants can be erected at any locations served by pipelines and employ
hundreds of highly trained, well-paid operators working in shifts around
the clock 365 days a year.
- Value added: Upgrading as much as doubles the value of oilsands
production by whipping it into light, clean shape for use by refineries
built to process conventional liquid crude. Raw bitumen sells at deep
discounts, 30 per cent to 50 per cent off prices for benchmark light oil
- End uses: Refined products including fuels, lubricants and
petrochemical building blocks of synthetic items from fabrics to food
(c) The Edmonton Journal 2007
Mark et. al.
Assuming those doing long term planning for securing world oil
resources have done their homework, which they have, and they are
arrogant enough to believe that the USA and it allies, especially Great
Britain, should control these resources, via military force if
necessary, it does not matter what are the current dominant sources of
oil. Saudi Arabia, Iraq, Kuwait, Iran, and other states in this region,
remain the most oil rich area of the world, given current cheaply
recoverable oil. For long term planning to control this oil rich
region, meaning fifty to one hundred years out, the fact that oil is now
coming from other oil rich states is not critical. The big oil prize
remains the Middle East. I will not list the billions of barrels of oil
resources that indicate the Middle East remains the long term dominant
source of easily recoverable oil, because everyone knows this. Canada
is a huge oil resource, now second to Saudi Arabia in listed recoverable
oil, but still does not equal the oil resources of the Middle East, even
when combined with Mexico and Venezuela, and Canada's oil sands are not
as cheap to develop as many Middle East oil sources. Iraq's reserves
are huge and of high quality. Cost is king. That is why coal sourced
electricity, to switch to the specter of another fossil fuel energy
source, of which the USA has the largest reserves of any nation, will
remain dominant over all other Green sources, till mitigating factors
stop coal's cheap energy expansion, whether it be via mandated CO2
sequestration, CO2 penalties or stringent controls over other
atmospheric or environmental damages from coal. Have you seen the
demolished mountains in the Appalachians do to coal mining? Looks like
they were nuked!
We can eventually look forward, however, to the raping of
Wyoming, Utah and Colorado, to develop the oil shale deposits in the
USA, though this currently is a more expensive and environmentally
controversial process, assuming we do not find other technologies or
sources of energy to fuel our economy and lifestyle, given the huge
amount of oil to be extracted, and the obvious blindness of the human
race to the foolishness of our out of control domination of the world of
nature. The chart below shows the USA has a huge oil shale potential
(can you say "Global Warming?" I knew you could!):
Read on, fearless reader, in our Brave New World, at United
States "Proved Recoverable Reserves" for oil shale. Do I read this
chart wrong when it seems to indicate 60,000 to 80,000 million tons of
recoverable oil from oil shale in the USA? I must be misinterpreting
this data! Or it must be wrong!
Table 3.1 Oil shale: resources, reserves and production at
Proved amount in place
Proved recoverable reserves
Average yield of oil
Estimated additional reserves
Production in 1999
million tonnes (shale)
million tonnes (oil)
kg oil/ tonne
million tonnes (oil)
thousand tonnes (oil)
50 - 64
United States of America
3 340 000
60 000 - 80 000
1. Generally the data shown above are those reported by WEC
Member Committees in 2000/2001
2. The data for Albania, Brazil, Israel, South Africa and
Ukraine are those reported by WEC Member Committees for SER 1998 3. The
data thus constitute a sample, reflecting the information available in
particular countries: they should not be considered as complete, or
necessarily representative of the situation in each region. For this
reason, regional and global aggregates have not been computed
Vision2020 Post: Ted Moffett
On 5/2/07, Mark Solomon <msolomon at moscow.com> wrote:
<mailto:msolomon at moscow.com>
It's easy to jump into the Middle-East oil nations are the cause
everything from empire building to gas prices debate, but it
couple of key factors regarding oil supply and price. First, of
following list of countries, pick the first, second and third
exporters of oil to the US:
No scrolling down. Make your picks, then read further.
If you picked, in order, Canada/Mexico/Saudi Arabia you are up
current oil markets. Canada has moved into number one exporter
the massive development of the Alberta oil sands. Almost all the
produced is sent to the U.S. Mexico is next with Saudi Arabia a
distinctly distant third place. (The environmental damage being
to mine the oil sands is enormous: huge open pit mines in the
arboreal forest. If you have google earth on your computer,
for Ft. McMurray, Alberta and you'll see the mines just north of
Another factor to keep in mind when discussing oil prices is the
effect of the oil futures market on real price. Futures markets
fine when there is relatively free competition in the market
but when you have de facto monopolies, such as in the oil world,
can be manipulated.
At 3:34 PM -0700 5/2/07, KRFP wrote:
>Oh, of course, we have to maintain the empire's presence in the
>vital region. Especially since Rumsfeld signed the closing
>for our permanent bases in Saudi Arabia (on Sept 12th or 13th,
>although it wasn't announced until 2003). Of course any
>this being exactly what Bin Laden was demanding is purely
>Sunil Ramalingam wrote:
>>There might be a reduction in numbers at that point, but I bet
>>permanent bases will stay. There is no exit strategy because
>>never was an exit strategy, nor was one desired by the
>>brought us this war.
>>>From: KRFP < krfp at radiofreemoscow.org>
>>>To: <mailto:krfp at radiofreemoscow.org>
vision2020 at moscow.com
>>>Subject: Re: [Vision2020] Ga$oline Price$
>>>Date: Wed, 02 May 2007 12:59:39 -0700
>>>A fitting testimony to the fourth anniversary of
>>>"Mission Accomplished" speech.
>>>Operation Iraqi Liberation (O.I.L .) has been and
will continue to be
>>>about the control of their oil. It will not end
until the Iraqi
>>>parliament sign away their oil rights to Exxon - BP-
et.al. Then we
>>>will see a cheery exit staged for us by whatever
administration is "in
>>>[Disclaimer: this is a personal post I am making
using the station's
>>>account, my views do not necessarily reflect those of
>>>though in this case they probably do.]
>>>Ellen Roskovich wrote:
>>>>*I just now walked in the door after visiting the
gas station. What a
>>>>shock! I was kicking myself for not topping off
last Friday when it
>>>>was still under $3.00. Isn't anyone mad as hell
yet? The price of
>>>>gas keeps climbing up and that's going to drive the
price of all
>>>>commodities through the ceiling. We rely on trucks
to get goods to
>>>>the marketplace. . . you're going to see prices on
>>>>climb even more than they have in the past couple
>>>>*Ellen Roskovich *
-------------- next part --------------
An HTML attachment was scrubbed...
More information about the Vision2020