101 comments on Canadian Oil Sands Production Update
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101 comments on Canadian Oil Sands Production Update
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I guess my basic question about bitumen production is economics. What does it cost per bbl to set up the production facilities? Is it still around $500k per barrel per day? How much does it cost per bbl for raw materials and energy to process the bitumen? Is this still around $30/bbl not counting amortisation of the capital costs? How does this stack up with coal to liquids? With redrilling and using tertiary development of depleted fields? With, perish the thought, conservation?
My best arguement for dealing with the cornucopians is agree with them that the oil is there, its just uneconomic compared with nuclear, wind and other renewables and conservation. This allows them the dignity of being right, just there are more practical solutions for our country and the planet.
I think its of the utmost urgency for all of us to begin dealing with the problems now so that our society can survive and prosper and we need to convince as many folks as possible that their own actions will make a difference.
Your cost numbers look high. At the ASPO conference David Hughes pegged the NG use as 3/4 mcf per barrel of oil produced from mining operations. His 2006 capital cost estimate was $131,000 per bbl/d up from $78,000 in 2004. His EROI estimate is 2. Others peg EROI at 4 or 5 which looks more accurate to me. Look at Canadian Oil Sands Trust latest financial results. For the third quarter operating costs were $19.68 per barrrel of syncrude produced. This is a very profitable enterprise. I think it is a mistake for people to say it is uneconomic or it is turning gold into lead from an energy balance standpoint. For natural gas use you are getting 8 x more energy back than you put in. The real problems with tar sands are they waste gas on heat instead of using it solely for hydrogen production, they produce large amounts of CO2 and the regional environmental degradation. The reason they aren't a long term energy solution to peak oil is the limits of production based on water and natural gas availability.