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To: ild who wrote (63121)	6/8/2006 1:54:55 PM
From: re3	Respond to of 110194

Canada wrests oil from sands, but at what cost? By Wojtek Dabrowski Thu Jun 8, 8:40 AM ET AURORA MINE, Alberta (Reuters) - Canada's vast oil sands, the biggest source of oil outside Saudi Arabia, don't give up their riches easily. ADVERTISEMENT Mining the earth for molasses-like bitumen that can be turned to oil involves clearing vast swaths of land, stripping off layers of soil and digging out lake-sized holes with giant shovels that scoop up to 56 cubic yards (meters) of material a swing. The world's largest haul trucks -- house-sized monsters with wheels the size of pick-up trucks -- ship the muck away for crushing and mixing with hot water before further extraction and upgrading. The start-up costs are huge, but with oil around $70 a barrel, the rewards are large as well. But while the black gold brings billions of dollars to the oil firms and the province of Alberta, critics say the operations are taking too big a toll on the environment. "I think that oil companies need to be held accountable financially and politically for the damage that they're causing to ecosystems," said Lindsay Telfer, the Prairie chapter director of the Sierra Club of Canada. She said oil sands production generates about three times as much greenhouse gas emissions as conventional oil production, and it takes three to six barrels of water to produce a barrel of oil -- much of it from the nearby Athabasca River. LAND RESTORED But the companies point proudly to areas where they have restored the land after they finished mining, and they say they are committed to bringing the wilderness back to its former splendor once the mining ends. Syncrude Canada Ltd., which operates the gaping hole in the ground known as the Aurora Mine some 45 miles north of Alberta's oil boomtown of Fort McMurray, is the world's largest producer of synthetic oil from the tar sands. It is a partnership of energy companies Canadian Oil Sands Trust, Imperial Oil Ltd., Petro-Canada, ConocoPhillips, Nexen Inc., Nippon Oil Corp. unit Mocal Energy Ltd. and Murphy Oil Corp.. Syncrude mines about 180 million tonnes of oil sands a year, turning it into some 250,000 barrels of oil a day. Like other companies developing the region, it is eyeing further expansion. Syncrude's utilities complex already cranks out enough electricity each day to power a city of 500,000 as it works nonstop to turn the tar-soaked earth into synthetic crude. The company boasts of its energy efficiency and its land reclamation program, where it restores the land it mines at a cost of about C$7 million ($6.5 million) a year. One such rolling green plot, which was an oil-sands mine about 20 years ago, looks idyllic, bordered by young trees and populated by bison. But every few seconds, a loud pop breaks the calm as propane-powered cannons scare waterfowl away from nearby ponds. The water in those pools is contaminated by leftovers from oil-sands mining and could harm the birds. "Basically, we don't want birds to land on process-affected water," Syncrude spokesman Alain Moore said. AIR QUALITY Environmentalists and local residents are also worried about air quality, fears that were highlighted last month when Alberta's environment regulators shut down a C$8.4 billion ($7.6 billion) Syncrude expansion just 10 days after it began operation. Syncrude thinks problems with a flue gas desulfurizer -- the very unit designed to cut sulfur dioxide emissions -- were behind residents' complaints regarding a smell described as a mixture of cat urine and bodily odor. It expects to fix the problem within a month or two. But Chief Executive Charles Ruigrok also said Syncrude and others are getting a bad rap on greenhouse gases. "I think we need to be transparent here. If you grow the production in oil sands, you're going to grow total greenhouse gas emissions from oil sands production," he said recently. But he said the oil and gas industry is not the main culprit in emissions of the gases, widely believed to cause global warming. "Consumers, whether it be through heating their homes, driving their vehicles, represent the lion's share of greenhouse gas emissions in this country," he said. Under the Kyoto treaty on global warming that it ratified in 2002, Canada has promised to cut greenhouse gas emissions by 6 percent from 1990 levels by 2012. However, the federal environment minister says that's an impossible goal as emissions are now 35 percent above the 1990 levels. The government says the treaty needs to be rethought. For its part, Syncrude expects to cut its per-barrel carbon dioxide emissions by 24 percent between 1990 and 2012, partly with the help of a lower-temperature extracting process and new technologies. It says it has cut its emissions of sulfur dioxide per barrel by 50 percent since 1983, and plans to reduce them further by adding flue-gas scrubbers to a pair of its cokers -- the units that crack bitumen into smaller molecules at the start of the upgrading process. But overall emissions from the region will still rise as companies crank up oil production, and environmentalists like Telfer say the pace of development overshadows the efficiency improvements attained by the oil companies. "It's still having a pretty major net negative impact on our ecosystems," she said. ($1=$1.10 Canadian)

To: ild who wrote (63121)	6/8/2006 2:08:32 PM
From: orkrious	Respond to of 110194

Date: Thu Jun 08 2006 13:45 trotsky (frustrated@bonds) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i continue to expect that domestic demand will eventually drive bond yields to new all time lows - the US banking system has 63% of its assets tied up in real estate lending and pension funds continue to have an extreme overweighting of stocks vs. bonds. the pendulum should swing the other way from here. Date: Thu Jun 08 2006 13:42 trotsky (@Fed officials) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved it is really a joke that the mouthpieces of the very engine of inflation are now all out yammering about it. in reality, US money supply growth has sharply decelerated over the past 2 years - if anything, they should begin to worry that the cumulative effect of their past rate hikes could produce outright DEflation soon. the rally in commodity prices owes very little to the Fed - it has been mostly the work of the Bank of China , which has recently expanded its balance sheet at a 28% annual clip. there's NOTHING the Fed can possibly do about that. this suggests btw. that the Chinese Yuan would likely defy expectations were it to float - instead of rising, it would probably fall. the major long term driver of relative currency valuations is the relative speed of the respective printing presses after all ( forget about trade deficits - anyone who looks at a long term overlay chart of the dollar vs. the US trade deficit should realize that there is no correlation whatsoever ) Date: Thu Jun 08 2006 13:28 trotsky (WilE) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved made the same mistake - thinking prematurely, that the 133 low would hold. there were sound reasons for this of course - the trendline, a positive money flow picture, and pm sentiment by some measures falling to its lowest point since the last major low ( now it's at its lowest in three years, as measured by the Rydex pm fund CF ratio ) . i've always qualified it by pointing to the broader market's panic potential, but didn't really believe it would come to this. well, now the trendline is toast, but so far horizontal support from the last correction low has held. this opens the possibility of today having produced a spike low, but next up is then a test of the broken trendline from below - and per experience that means it will take time to put in the actual bottom. that said, sentiment and money flow data continue to look good - with the caveat that negative sentiment that coincides with extremely negative price action is less valuable as an indicator than when it coincides with strong price action. Date: Thu Jun 08 2006 10:40 trotsky (JD) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "the rand normally waits for mr trotsky to make a prediction .. then promptly goes in the other direction " LOL! absolutely!