Matthew Simmons, in his interview with Jim Puplova, called the entire process "turning gold into lead." He said the synfuel crude was low quality. (www.netcastdaily.com)

The rather pathetic and alarming potential that oil companies may use nukes to extract oil indicates the lengths the powers that be will go to in order to continue the parasitedigm.

Also, good post, Bob Shaw in Phx,AZ.

The upcoming political contractions will accelerate the undoing of any polity we may see remaining in the world. As the oil producing countries realise that it is not in their interest to continue funding a parasite like the US through currency reserves and unfavorable trading terms. Eventually they will shift their focus inward and will no longer worry about the world's largest consumer market. The corporations who have been shifting their manufacturing facilities offshore for the past 25 years will complete the process and move even their corporate headquarters overseas to more amenable countries -- a process that has already started with much of corporate wealth being offshored for tax breaks. It is only a matter of time before the dollar collapses due to a shift to PetroEuros and PetroRoubles.

We will find ourselves friendless in this cold cruel world with either our hands out, begging for the oil and gas we took for granted, or we will have our weapons pointed, demanding that our "friends" provide us what we want.

My guess is we will use the latter technique. More lives squandered. More energy wasted. More time sifting through our fingers as we continue the parasitedigm.

I hope the Canadians wise up and stop the foolish destruction of their environment designed to fuel our silly lifestyle. But, greed is an international trait and the chances that humans will see the continued track as a dead-end are slim to none. Having just read a very good history of the Spanish Flu, I see that cronyism, greed, political machinations, ego, a tenacious clinging to the old ways even in the face of new understandings, all contributed to the horror of that epidemic, and so it will this crisis.

How can we hope to wise up when there are no stacks of bodies to the ceiling in every corridor of today's hospitals, no steam shovels digging mass graves in Philadelphia, no people collapsing in the streets, and even then the people in power in 1918 did not heed the experts of the time? How can we expect change when cheap oil still reigns?

The countdown is on. We are witnessing a grand and disturbing confluence of events, all destined to result in a reduction of the human population. Anyone with a basic understanding of our pyramidical economic and physical infrastructure realizes that if enough blocks at the base are pulled out, the entire edifice will collapse like so many cans of peas at the market.

God help us.

A nuclear plant lasts a long time and produces a LOT of steam (process lots of tar), steam can not travel far cost effectively (a few miles at most).  Tar sands need to be brought to the reactor.  A reactor will process major quantities of tar sands in 40 or so years.

IMHO, the nuke will consume the tar sands in the neighborhood in a decade or so and the cost of bringing the tar sands to the reactor will climb and eat into the economics.

The only economic reactor would be a electricity producer with "minimal" steam by-product.

It makes more sense to build reactors elsewhere, burn less NG to make electricity and use that NG in Alberta instead.

Any chance you'll discuss the water situation?

I'll second that request. I gather that the water situation is precarious, but don't know much about the details.

Great post Dave, as always.

I am assuming from your reply that you are a Canadian Citizen.  Can you inform us on how many Canadians are becoming Peakoil aware, and are any politicians starting to discuss NAFTA changes?  I forget the name of the Nova Scotian cable millionaire turned politician--is he gaining political strength to lead energy reform?  Canada needs to nationalize its energy industry, like Putin did GAZPROM, and Cardenas formed PEMEX, to help force energy conservation upon the unwashed American masses. Our US politicians are spineless bastards by allowing the Energy Fiesta to continue its wasteful ways instead of reinstalling Pres. Carter's ideas from long ago.

Bob Shaw in Phx,AZ  Are Humans Smarter than Yeast?

The article also has some info about Suncor's attempts on cutting down on natgas use.

Please take this the right way, but your EROEI comment misses my main point, which is -- where is the gas coming from in the future? I don't think the EROEI is the issue currently and I didn't discuss it for that reason, given that natural gas supplies remain sufficient and the costs are reasonable to keep the EROEI profitable in current circumstances. However, that begs the question. What will future natural gas demand be to produce the tar sands and what will be the cost of the required natural gas going forward? Much higher, I'll bet. In this case, EROEI goes down and down....

And of course I agree with your comments about the "hidden" costs to the environement.

best, Dave

1700 Cubic Feet to make 1 barrel of crude
1 Cubic foot = 1031 btu
1 barrel of crude = 5.8 mmbtu

5.8 mmbtu / 1.752 mmbtu = EROI 3.3

But this doesn't include energy expenditures in process operations. In the case of current tar sand production, heavy machinery is used to mine and transport the tar-sands to the processing plant, and the tailings also need to be transported to a dump site. If I recall correctly, a scientific report on EROI for the Canadian Tar sands was estimated to be about 2.

Re: "the cost of a small amount of surplus pipeline capacity is preferable to the lost revenue from shut-in production due to insufficient pipeline capacity".

Huh? Where is this surplus pipeline capacity coming from? The costs of insufficient pipeline capacity are potentially very large eg. the MacKenzie pipeline. There is apparently a trade-off here. The oil sands producers like Suncor must take into account how much it will cost them to get sufficient gas into the Athabasca region to make the oil sands production operations work ie. profitable.

I did not quote the "constrained case" but gave the reference so people like you could check it out.

Re: "... the IEA tactic of having an optimistic, supposedly main forecast and hidden in the back of the document a much lower (restricted investment) forecast that is clearly judged by them to be a more likely".

Yes, indeed. CAPP does not consider natural gas issues at all as far as I can see -- although the Canadian NEB does. Note that their forecasts are much more conservative than those of CAPP.

I was aware that the NEB conflates the Canadian/US natural gas situation since it makes no sense to do otherwise.

However -- and you and I can argue over this -- it makes little sense to me at this point (and to EXCEL Energy back in Colorado, where I used to live, who want to put a coal-fired plant in Pueblo) to plan for a natural gas future in North America based on LNG since gas production has evidently peaked on this continent and increased LNG imports are not available at this point. Who knows, perhaps you better than I, how that's going to work out when the going gets rough in the world market. I suppose the contracts have been worked out. Qatar, Our Saviour. But where are the additional LNG processing plants here in North America, today, as I type this? When and where are they coming?

Re: "The EMA points out that the oilsands folk are already initiating co-generation (to the tune of 1,568 MW) and other energy-saving steps in their move to conserve demand and keep operating. There is, after all, some gas generated during the refining process that can also be used to help with power generation".

Given that I said the following,

Tar sands natural gas usage will reach 1.01/bcfd by the 4th quarter of 2006 from 0.72/bcfd in 2005. According to the CAPP production data, there will be an increase of 0.225/mbd of oil production from 2005 to 2006 accompanied by an increase of 0.29/bcfd of natural gas required for that new production, an astonishing 29% increase in just one year. This is related to increased use of SAGD for in situ bitumen extraction.

best, Dave

Ottawa, for example, has decided to remove 7,500 MW of coal-fired plants.  The presumption is that this will be replaced by a gas-powered plant, in much the same way as almost all the new generating capacity in the US has been based on natural gas.

I think what you are referring to here is Premier Dalton McGuinty's promise to close Ontario's coal fired generation. This decision is provincial rather than federal and so came from Queen's Park (Toronto) rather than from the federal government in Ottawa (although McGuinty's own provincial constituency is in Ottawa just to confuse matters). The coal plants were originally slated for closure in 2007, then 2009 and now their closure date has become open-ended. The Lakeview plant in Toronto has closed already, but I understand that it's gas conversion has not yet been completed as planned.

It recently became clear to Energy Minister Dwight Duncan that closing the rest of the coal plants would result in insufficient generation capacity to meet demand (it had been clear to everyone else from the beginning). What's more, closing coal plants in southern Ontario would result in higher power imports from the US, where it would be generated near the border using dirtier coal plants than ours and the smog produced would promptly pollute southern Ontario anyway. As the justification for the closure was meant to be air quality, it is obvious that it would an own-goal on at least two fronts (supply and pollution).

The blanket closure promise would also have been a huge blow for Atikokan in north western Ontario, where they have a clean and modern coal plant which also provides much-needed employment in this remote area. Closing it would have been completely pointless. The plant isn't entirely off the hook, but it has been promised that it will be able to continue operating for at least the next three years.

As for conversion to gas-fired generation, I don't think McGuinty is really aware of the potential for problems with gas supply and price volatility. His last energy minister (Donna Cansfield) was recently suggesting providing public subsidies for people to convert their electric appliances to natural gas. Either she was unaware of the potential for  price/supply issues with gas or she was cynically trying to shift demand from a subsidized energy source (electricity) to an unsubsidized one (gas) in order to dump the problem into the laps of unsuspecting consumers. If the Ontario government would just stop subsidizing power consumption they would buy themselves some time to mitigate the looming supply shortfall - far better than convincing consumers to jump from the frying pan into the fire for no good reason.

What I would like to see McGuinty doing is offering a pre-payment metering programme like the one in Woodstock. It's voluntary, popular with consumers, lowers utility costs by doing away with billing, eliminates bad debt, empowers consumers to manage their own consumption through feedback, and lowers consumption by 15-20% even in the absence of special education or incentive programmes. McGuinty is planning to introduce smart meters with time of day pricing, but should go one step further and bring in pre-payment with feedback.

What pipelines run from non-existing but planned LNG processing facilities on Canada's west coast to Alberta where the tar sands are?

I'd be interested to know. A map would be helpful.

http://www.aapg.org/explorer/2005/05may/dinning.cfm

Kicking the (Natural Gas) Habit

According to Dinning, "injecting natural gas into the oil sands to produce oil is like turning gold into lead."

In a 2004 report on Canada's oil sands, the National Energy Board stated that natural gas costs can comprise up to 50 percent or more of total operating costs in a thermal -- or steam assisted -- in situ project.

Dinning described gasification technology that offers an elegant solution to the natural gas crunch that Alberta's heavy oil producers will face during the next decade. According to a 2004 Canadian Energy Research Institute (CERI) report, natural gas consumption for oil sands extraction and refining -- currently sitting just below a billion cubic feet per day -- could skyrocket to between 2.2 and 3.7 billion cubic feet per day by 2017, leaving many wondering where the gas will come from to fuel future expansions.
Even the proposed Mackenzie Valley pipeline -- scheduled to ship 1.8 billion cubic feet per day from the Canadian Arctic to Alberta -- would not feed the oil sands producers' growing appetite for natural gas.

 In 2004, Alberta's oil sands industry produced about a million barrels per day, or close to 50 percent of Canada's total daily oil production. Based on CERI's most likely growth scenario, daily production from Alberta's oil sands could hit 2.2 million barrels of synthetic crude and unprocessed crude bitumen by 2017.
The OPTI solution....
OPTI's unique combination of extraction and upgrading technology makes it the poster child for the new wave of energy efficient oil sands mega-projects.

At Long Lake, the liquid asphaltenes are sent to the gasification unit where they are converted into synthetic gas (or refinery off-gas), steam and hydrogen. The synthetic gas, or "syngas," has a heating capacity of about 300 British thermal units per standard cubic feet, as compared to 1,000 British thermal units/standard cubic feet for natural gas.

The syngas will be used to generate steam for the SAGD process. Instead of flaring excess syngas, this "free" energy source will be harnessed to generate power onsite in the cogeneration facility.

Excess power will be sold to Alberta's deregulated power grid.

Of course, all this relies on what no one wants to talk about....substitution of natural gas with bitumen, or essentially, coal.

But what about the Greenhouse Gas problem?  To continue quote:

"Using coke as an alternative energy source -- while seemingly attractive -- presents some challenges for Alberta's oil sands industry:
    *      On the one hand, a coke pile represents a waste by-product from the upgrading process that can be gasified to produce energy.
    *     On the flip side, a coke pile is a valuable carbon sink, and a commodity that can be used in the future to offset greenhouse gas emissions under the Kyoto Protocol.

Suncor has been burning sulfur rich coke in its boilers for decades at its mine near Fort McMurray. However, the gasification of the coke -- which will liberate carbon dioxide gases -- must be offset by carbon dioxide capture and sequestration. And, that might require the construction of a pipeline to transport carbon dioxide south where it could be used in Enhanced Oil Recovery (EOR) projects or sequestered in depleted oil and gas reservoirs.

The challenge, according to Lewis, "is how do we build this gasifier and fulfill our commitments to Kyoto?"

"Suncor is weighing the balance between a good business decision and long-term environmental responsibility," she added."
---------------------------------------
So we are somewhat back to where we started.  The use of the bitumen gas as driving fuel cuts the amount of BTU's available by two thirds compared to natural gas, and we will have to try to find some way to sequester the carbon, in other words, the same problem we would have if we did CTG (Coal to Gas) or CTL (Coal To Liquid).  But, as mentioned at the opening of the piece, despite early assurances that "there is plenty of gas", there now seems to be considerable concern that there is not.

So far, we have come up with the most complex Rube Goldberg contraptions possible to get to use the tar sands.  But who needs them?  If you are going to burn first, natural gas, then switch to bitumen, essentially coal, then convert the coal to gas, and then have to sequester the carbon from the coal....(!!!!!), the whole thing gets more farcical as more and more parts are bootstrapped to it!

Again, it would be much less damaging to just burn the nat gas directly, or, as much as I hate to have to say this, you would almost come out ahead by going CTL and burning the coal  (described in the article, forebodingly as "almost infinite"), and trying to sequester the carbon without the added annoyance of the tar sand...

How much more complicated does this mess have to get before even the investors start asking quesions?  And how long before everyone admits that if global warming is a real threat, we are up that old proverbial creek, because almost nothing will stop us from releasing that carbon....?

Roger Conner  known to you as ThatsItImout

Number 1, that's a pretty wide net you are casting. And number 2, insulting "this group" is not an effective way to communicate your message.

Having said that, look above at the post in which I calculated a rough EROEI. I said that in that case, they would probably start cannibalizing part of their production in order to drive the process. That appears to be exactly what the OPTI process does. I didn't know they were doing it yet, but it is the logical way to go if the EROEI is in the 6-8 range, since natural gas supplies are scarce.

RR

Re: How confident can we be that this [irreversible decline] will be the case?

Even NEB admits a peak. Your question depends on successful E&P of "undiscovered" natural gas resources, including Coal Bed Methane. There are the usual questions about investment, logistics (equipment or location--the Arctic) and timeframe, ie. resources put online versus almost certain declines in the WCSB, where 80% of Canadian production comes from.

There is a experimental drilling project called Mallik 2002 in Canada. It apparently produced gas for a few days before they capped it. Whenever I try to look for followup plans there seems to be nothing there. There is a site about that project but that is not updated since 2003.

Anyone here has some knowledge about this? I vaguely recall reading that this was hydrate that was formed when content of a NG field got in contact with permafrost, allthough that might have been with regard to another project..