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Good News for Us and Oil coming up soon!
#1
I have had this little article for a few months, and have been thinking about the possibilities that are beginning to show up for us.

Julian Simon has been right all along, of course. this article by a former student of his, Michael Fumento, has this great little bit of news that may well begin to have itself felt, both here and in Canada soon. With the rising costs of oil, unlocking it from sands and shale in North America is a Real boon for the immediate future. Note the cost values in the article.

Enjoy the article.




Quote:Fill 'er Up with Oil Sands!
By Michael Fumento

Scripps Howard News Service, October 27, 2005
Copyright 2005 Scripps Howard News Service



Oil sand open pit mining. When it's finished, new vegetation will be planted on top.

It was a tenet of the late great economist Julian Simon that we'll never run out of any commodity. That's because before we do the increasing scarcity of that resource will drive up the price and force us to adopt alternatives. For example, as firewood grew scarce people turned to coal, and as the whale oil supply dwindled 'twas petroleum that saved the whales.

Now we're told we're running out of petroleum. The "proof" is the high prices at the pump. In fact, oil cost about 50% more per barrel in 1979-80 than now when adjusted for inflation. Yet it's also true that industrializing nations like China and India are making serious demands on the world's ability to provide oil and are driving prices up. So is this the beginning of the end?

Nope. The Julian Simon effect is already occurring.

The evidence is in something called oil sands (also called tar sands), a gooey substance that can be surface mined as coal often is. The oil is then separated from the dirt using energy from oil or natural gas extracted from the site itself to produce a thick liquid called bitumen. It’s then chemically split to produce crude as light as from a well head.

Oil sands in a single Venezuelan deposit contain an estimated 1.8 trillion barrels of petroleum, with 1.7 trillion in a single Canadian deposit. In all, about 70 countries (including the U.S.), have oil sand deposits although technology hasn't yet made them economical for exploitation. Of Canada's reserves alone, over 300 billion barrels (more than the entire proved oil reserves of Saudi Arabia) is currently considered recoverable. And recovering it they are.

It appears the mining of oily sand and its conversion to petroleum began in 1735 in France, but presumably the expense of the process and the discovery of easily-recoverable oil led to its abandonment.



Alberta's oil sands deposits alone are about the size of New York State.

The Canadians got in the game when Suncor Energy produced the first barrel of crude from oily sand back in 1967. The joint Canadian-U.S. venture Syncrude has been doing so since 1978 and now supplies over 13% of Canada's oil needs. Oil sands as a whole provide over a third of the nation's needs, with almost all of the rest going to the U.S. Between pumped oil and oil from sands, Canada is our largest supplier of crude and refined petroleum.

It almost makes up for their inflicting William Shatner on us, eh?

Suncor's success can be measured by stock prices that have increased an incredible 400% in the past five years compared to a flat-lined Dow and a dropping Nasdaq and S&P 500.

Yet business is booming now more than ever. Suncor has just finished expanding production capacity from 225,000 barrels per day to 260,000 and plans to reach 350,000 barrels daily by 2008. On the whole, the industry expects production to triple by 2020. Thus while mature oil wells produce less each year, oil sands companies can keep producing more – a rather happy trend.

Driving such expansion is the obvious – sustained high prices of petroleum – as well as continually improving technology that keeps making it cheaper to both mine and convert oil sands.

Syncrude spent only $15.27 (U.S.) last year in total production costs to produce a single barrel of its low-sulphur "Syncrude Sweet Blend." Suncor calculates that in 2004 it spent $9.81, although spokesmen for both companies confirmed they use different accounting methods to arrive at their figures. In any case, current petroleum prices of about $60 a barrel hardly need to be sustained for Canadian companies to continue to squeeze liquid gold out of their lands with plenty of money to expand operations.

We've only scratched the surface in terms of discovering and exploiting oil sand deposits, along with deposits of oil-containing rocks called oil shale. Still the amount, however huge, is necessarily finite. By one estimate, we may only have about more 500 years of energy from oils sands at current usage rates.

Just five centuries till the spigot runs dry! Where are the doomsayers when you need them?
___________________________________________________________________________________________________
"INSIDE EVERY PROGRESSIVE IS A TOTALITARIAN SCREAMING TO GET OUT" - David Horowitz

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#2
perhaps Iran is aware of this? it would explain their recent mind boggling reactions. the Middle East doesnt seem to have such the strangle hold after all.

p.s. could we also thank the people who prevent us from drilling in ANWR and building new refineries for the rise in effeciency of Sand Oil? :twisted:
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#3
Still, one have to expend substantially more energy to extract one unit of oil from sands than from the (even the most expensive) oil field. OTOH, if one adds all artificial external costs like military expenditures, instability, idiotic ideologies that needs to be checked...then sands look very attractive. However, for some reason the majors do not participate noticeably.
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#4
it says in the article that the energy to reclaim the oil comes from the oil sands itself, so outside energy is not used there. I would think that this would be significant.
___________________________________________________________________________________________________
"INSIDE EVERY PROGRESSIVE IS A TOTALITARIAN SCREAMING TO GET OUT" - David Horowitz

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#5
John L Wrote:it says in the article that the energy to reclaim the oil comes from the oil sands itself, so outside energy is not used there. I would think that this would be significant.
John, you have to pay for this "outside" energy anyway. And if you spend a $2 worth of outside energy to get a $1 worth of oil (be it from sand or from traditional oil field) you will go bankrupt pretty fast. The entire economics is based on getting some additional value from ones activities. I thought you should know that better than me.
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#6
i was talking to a customer of mine today who has been in the oil business for 28 years, and he was telling me that with all the environmental laws, if they were to build and operate a refinery in America, it would cost about $130 million, as opposed to a small price tag of only $50 million if some of these absurd laws were removed.

believe it or not, he agrees that we have a shitty energy policy. he would love to see the price of crude come down. he still has two wells he will not operate as they ar enot cost effecient...
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#7
In yesterday's local paper,there was an article about a Florida R&D firm that has developed technology to create ethanol out of coal and TRASH.

IF it works out,the company will locate here in Oak Ridge at the former K-25 site in a building I used to operate in,K-31. It is huge to say the least,biggest building in America almost.

Anyway,it said they would start with 500 employees and the government is doing loan subsidies. I know,that ain't free enterprise,but we're at war,oil cash flow funds our enemy,I am 100% for it.

High fuel prices change conduct and necessity is the mother of invention.
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