[Vision2020] Ga$oline Price$

[Ted Moffett]

Mark et. al.

The chart I offered was on global oil shale resources, not oil sands.  There
is a significant difference.  The oil sands in Canada are not listed in that
chart I offered.  I understand the current recoverable resources as accepted
by the oil industry now place Canada as having the second largest oil
reserves behind Saudi Arabia, and that much more potentially can be
recovered.  Phil Nesbit and I discussed this in detail on Vision2020 years
ago...Extracting Canada's oil sands resources is a disaster for global
warming even if the process was energy efficient, because use of the oil
will increase CO2 emissions.

But if the USA's oil shale resources were accepted as recoverable in
practical financial and technological terms by the oil industry, and please
correct me if I am wrong, the USA would have the largest oil resources of
any nation.  The chart I gave showed the fantastic oil potential of the
USA's oil shale resources.  The problem is that this oil shale may never be
practical to develop, though that's what once was said about Canada's oil
sands, or "tar sands" as it is sometimes called.

Ted Moffett


On 5/3/07, Mark Solomon <msolomon at moscow.com> wrote:
>
>  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.
>
>
> http://www.cbsnews.com/stories/2006/01/20/60minutes/main1225184.shtml
>
>
> Following is an excellent article on the oil sands. Subscriber access only
> so am posting the text.
>
>
> m.
>
>
> ****
>
>
> American demand on the rise
> Alberta's crudest crude gets new respect as conventional oil wells start
> running dry
> 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
> plants.
>
> 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 Edmonton.
>
> 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 U.S.
>
> 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 from Texas.
>
> 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.
>
> BARGAIN BIN
>
> 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
> Petroleum Consultants.
>
> 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 Texas
> Intermediate.
>
> 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 Dunbar.
>
> 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 production.
>
> 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 3.3million 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
> bitumen output.
>
> 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 bitumen
> exports.
>
> 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 in
> pipelines.
>
> 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 catalytic
> conversion.
>
> 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
> grades.
>
> - End uses: Refined products including fuels, lubricants and petrochemical
> building blocks of synthetic items from fabrics to food additives.
> � 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!
>
>
>
> http://www.worldenergy.org/wec-geis/publications/reports/ser/shale/s
> hale.asp<http://www.worldenergy.org/wec-geis/publications/reports/ser/shale/shale.asp>
>
>
>
>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://mailman.fsr.com/pipermail/vision2020/attachments/20070503/2463eb5b/attachment-0001.html