FTD: Raymond James on Peak Oil and the Oil Sands of Canada

Very interesting catch tonight by Fatherof4 over at Flying Talking Donkey.  (For those of you new to our site, go check out FTD.  Fo4 is the father of the peak oil webring as well.)

Here's the link to a .pdf in his del.icio.us linkfest of an extensive Raymond James report (big .pdf warning, 138 pgs). It's very pro-oil sands of course...let's just call it "optimistic."

Lots of charts, graphs, and really interesting analyses.  Worth looking at, especially if you want to see why the US will either be motivated to own Canada or will be Canada's bitch in a generation.  Just look at the maps of Alberta's oil sands...and the geology of oil sands section is interesting as well.

Update [2005-8-25 23:43:44 by Prof. Goose]:Big Gav has a post tearing apart oil shale at PE-Oz. Good stuff as always from BG.

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a critical element of oil sands production is the signifigant use of natural gas in the in situ and to a lesser extent mining process. if on average approx 1 mcf of natural gas are required per barrel of oil, one wonders where are the gas will come from. The US depends on Canadian natural gas imports; as oil sands projects ramp up there will be less gas to export to the US which will put increasing pressures on natural gas prices. The ideal solution is to build a nuclear reactor in alberta but obviously there would a long time lag for one to be built. Opti Canada has a patent from an Israeli company to create synthetic gas from bitumen that thereby avoids the use of natural gas in the in situ process; so far  i believe this has only been applied in a pilot plant. So for the oil sands to succeed there will have to be aolution to the natural gas requirements.
Thanks for the plug PG. I started out the shale search with Blair's view foremost in my mind, but I just couldn't find any evidence to support it.

Combined with the environmental issues looking even worse than those for tar sands it all looks pretty hopeless - I do wonder why Shell is still trying after all these years though (and I've seen at least one person from there check out the post already - really wish those sorts of guys would leave a comment :-)...

As for the comment above about needing natural gas for tar sands and it being subject to depletion, this is true, but (as I noted earlier in the week) it would seem that you could largely convert the process to use the tar sands output in place of gas once its up and running. And they have been considering building a nuclear plant up there as another alternative to power the extraction process. I still expect tar sands extraction will run into some sort of limit, but I think it is possible Canada will be the new Saudi Arabia (both in terms of oil based wealth and being a hot desert in 50 years time)...

Now they use natural gs for both heating and as a hydrogen source.  You could use the oil output for energy but you'd still need a source of hydrogen, which probably means more water consumption.
"US will either be motivated to own Canada or will be Canada's bitch in a generation"

Also, as climate change continues, the Great White North will become more attractive for large-scale agriculture. The American midwest will likely dry out (see The Ogallala Aquifer Depletion for example) and become a dust bowl as in the 1930's. So, Oh, Canada, welcome aboard, the 51st State.

By the way, I looked at the Raymond James report over and it seems that tar sand oil production will be in the 4 to 4.5 mbd range in 2020. That's about equal to current yearly production declines from existing fields.
Hmmmm, so the US is going to be starving for our food and oil, but we're supposed to become the 51st state? How about instead we'll give you decent enough treatment as our bitch? ;)

The conservatives just recently lost the best chance they've had in a long time to remove the liberals (democrats), and they've been losing mind share. If the conservatives were in power, I'd say that there could be a chance for a 51st state kind of workout agreement. And coincidentally enough, Alberta has the most conservatives per capita.

But lately, Canada has been increasingly showing a backbone in their relations with the US (proposing new tariffs since the US won't remove their softwood tariffs despite having lost in a recent trade court). My hope is that as PO becomes something which is more apparent that the NDP (think of a cross between green, democrats, and the marijuana party with some sprinklings of libertarian individual rights) stands to become a contender. They're the third largest party in the Canadian political system, and while they usually get 18-21% of the vote, that's a heckuva lot more than all non-bipartisan parties in the US combined get. As people turn against the liberals, it will mainly be a choice between the conservatives and the NDP. And while a lot of people seem to think nicely of the US, they don't want to become the US, and certainly don't support a lot of the initiatives that the conservatives do (war in Iraq, increasing drug war, etc). But that could just be the segment of the population that I come across with, as well as my being well aligned with the NDP's principles.

This report has a lot of interesting info.  see e.g "We believe the world is close to a peak and, further, that conventional light on-shore oil production may have already peaked."  (p44) For a summary of the peak oil parts see http://enkidurant.blogspot.com/
RJ also has a weekly report which they call "Energy Stat of the Week"  This week is on inventories and near term projects.
http://www.raymondjamesecm.com/Docview.asp?file=http://beacon1.rjf.com/researchpdf/iEne082205b_0729. pdf
Good comment, Enkidu. As I read through parts of the document, their case for investing in tar sands rested on the notion that light crudes from conventional sources had peaked. Interesting way to sell your case. Remember that as the world economy comes to a grinding halt in the near future, still there will be somebody who will make a buck off it.