Canadian tar sand miners scaling back

[Pekelo]

http://www.nytimes.com/2009/01/07/business/07oilsands.html?_r=2&ref=business

"Operators of oil sands projects and Canadian governments are eager to point to its potential to reduce America’s dependence on oil from politically unstable regions. Canadian oil sands produce about 1.2 million barrels a day, or about 9 percent of the imported oil consumed in the United States.

Production was headed toward 3.5 million barrels a day by 2015 before the economic slowdown; with the vast reserves available, Canadian oil sands have the potential to produce the equivalent of 1.7 trillion barrels of oil.

The oil sands companies, however, have been scaling back as falling oil prices and the general market turmoil create a significant economic challenge for the projects. The entire process adds up to the world’s most capital-intensive method for extracting oil. A tiny example: each of the tires on the cartoonishly oversized dump trucks used in oil sands mining costs about $60,000."

Tire change for 60K? No problemo!

 

[nazzdack]

Are retreads available instead?

 

[Daal]

If the proven to work and scalable tar sands are struggling, forget the fantasy of oil shale. supply should come under pressure over the next years

 

[Pekelo]

Not to mention the mining of oilshale from the Bakken formation is incredibly water extensive and there is absolutely no extra water aviable in the American (dry) West....

http://ngm.nationalgeographic.com/2008/02/drying-west/kunzig-text

http://www.ci.slc.ut.us/utilities/NewsEvents/news2003/news6192003.htm

Water is so important, that the water commissioner of the West has the right to overrule the President of the US!

 

[Random.Capital]

Quote from Daal:

If the proven to work and scalable tar sands are struggling, forget the fantasy of oil shale. supply should come under pressure over the next years

They are struggling at $40/bbl crude prices. At $140/bbl it's like printing money and the supply is (for practical purposes) infinite.

Which is why "peak oil" can never be captured by a 2D line graph - it's a surface, where each slice of the stack represents production at a specific price point.

 

[Pekelo]

Quote from Random.Capital:

... and the supply is (for practical purposes) infinite.

It isn't the size, it is the scalability of production what the problem is. The max. what they could reach is about 4 mbpd, and to the overall picture, that isn't much...

 

[Daal]

Quote from Random.Capital:

They are struggling at $40/bbl crude prices. At $140/bbl it's like printing money and the supply is (for practical purposes) infinite.

I had no idea is peak oil is about to happen or not but I do know that to argue alternative energy will save that day is to say oil is going to $200. Some oil bears are actually bulls they just dont know it
And since this is a trading forum I think long-term fat tail oil calls are looking pretty attractive

 

[crgarcia]

Tar and shales technologies, even if unprofitable, must be kept idling with gov't funds.

Oil rich countries are each time more unstable, so you never know about the future.

 

[saxon22]

Quote from crgarcia:

Tar and shales technologies, even if unprofitable, must be kept idling with gov't funds.

Oil rich countries are each time more unstable, so you never know about the future.

So you want the gov. to help the companies keep the project on line. I hope you will be as willing for the same companies to share their profits when oil goes to $200.

As for the unstable countries, the only one unstable is Iraq and the reason it is unstable is the US, where you see others is beyond me.

 

[Random.Capital]

Quote from Pekelo:

max. what they could reach is about 4 mbpd, and to the overall picture, that isn't much...

Nobody knows what the max production is, as the prices weren't high enough for long enough to find out.

More to the point, oil sands, shale oil, etc, are littered all over this planet. When the source is that distributed, max production at any given point becomes less relevant.