14:12 Oil sands: Taking a look
We wanted to highlight what oil sands are following feedback. By definition, oil sands (a.k.a. tar sands) are a combination of clay, sand, water, and bitumen. Tar sands are mined for the oil rich bitumen which is refined into oil. Conventional oil is extracted by drilling traditional wells into the ground whereas tar sand deposits are mined using strip mining techniques. Canada's Alberta region is believed to have an abundance of oil sands, which can be strip-mined, cleaned, and transformed into a stiff tar called bitumen. Oil & Gas Journal estimates that Alberta has 174.5 bln barrels of recoverable reserves in its oil sands, enough to meet Canada's needs for 250 years (40 for the U.S.). That figure is second only to Saudi Arabia's estimated reserves of 264 bln barrels and far more than the Arctic National Wildlife Refuge's estimated 10 bln. All told, including deposits beyond the reach of today's technology, there could be 1.6 trillion barrels of oil embedded in Alberta. As international prices have rocketed above $50 a barrel and technology advances have pushed production costs down to about $18 a barrel, the sands have become stunningly attractive. These oil sands are the world's most expensive, most polluting source of oil under large-scale production. Wringing four barrels of crude oil from the sands requires burning the equivalent of a fifth barrel. The mines and refineries also release huge amounts of greenhouse gases. Yet there is so much interest here that the risks are being overlooked. An Oct Fortune Magazine article said China's investments in the sector, about $255 mln, are little more than a dabble so far, but a proposed venture with Canadian pipeline builder Enbridge (ENB) to pipe 400,000 barrels a day from Fort McMurray to a Pacific port is widely believed to have caught Washington's attention. Suncor (SU) is one of Canada's biggest developers of oil sands. Other ways to play the rise in oil sands is Canadian Oil Sands Trust (COSWF), an open-ended investment trust that generates income from its 35.5% working interest in the Syncrude Joint Venture. Birch Mountain Resources (BMD) is another way to play the potential oil sands boom, as the co has leaseholdings and permits rich with limestone -- a product in high demand by the oil sands industry and local community for products such as aggregate and quicklime. |
