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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: StockDung who wrote (96366)	10/30/2006 7:52:16 PM
From: SEC-ond-chance	Read Replies (1) \| Respond to of 122087

................................................................Here is the counterpoint that you won't get in the Stock Spam Blast...................................................... One sometimes hears that the world doesn't have an oil problem because so-called "tar sands" will provide a vast new source of oil. It is unlikely, however, that oil production from tar sands can reach the scale required to make a dent in world oil production quickly enough to make a real difference. Even if it could, though, there are other enormous problems with tar sands: production of oil from tar sands is extremely energy-intensive (so the net energy gain is low and the amount of carbon that goes into the atmosphere correspondingly large per unit of energy) and enormously destructive to the environment. When all factors are taken into account, tar sands are far from the deus ex machina they are sometimes said to be. Here's a nice summary of the issues, taken from the recent book Crude: The Story of Oil, by Sonia Shah: Across the bleak landscape of northeastern Alberta, [Canada] over millions of years, a giant oilfield had risen from its grave. Freed from its rocky tomb, the oilfield's light molecules of oil and gas evaporated, leaving behind a thick, tarry sludge to bask in the thin northern sun. The sludge gummed up with the Alberta sand. If the oil lingering in these sands, called "tar sands" or "oil sands," could be recovered, Alberta could provide 300 billion barrels of oil, more than the proven reserves of Saudi Arabia, awed industry groups said. [...] [I]t isn't the only such deposit, either. Another giant deposit of tar sands sits in the Orinoco belt in Venezuela, buried deep underground. [...] The [Alberta] tar sands lay fallow for years until the Canadian government started to aggressively subsidize their development. In 1995, the Canadian federal government announced that...oil companies ...could write off 100 percent of their expenses. [...] The trouble is, Alberta's tar sands are nothing like conventional crude oil, which is why trade magazines and government agencies historically haven't taken tar sands into account when tallying up the world's reserves of crude. Thick and tarry, tar sands oil can't be conveniently bundled off down a pipeline to the refinery. It must be treated first, with natural gas and other petroleum products, in order to flow. Not just with a little bit either; the tar sands require over five times more of these precious petroleum products than regular heavy crude. Even when begrudgingly flowing, the oil is heavier than most refineries can handle. New refineries must be built or revamped in order to process it, and all they may be able to turn out is road asphalt or boiler fuel. Alternatively, yet more fuel can be burned to heat tar-sands oil into a synthetic crude oil. For each barrel of tar-sands oil, no less than two tons of sand and clay must be mined, using the widely reviled methods pioneered by the coal industry: forest-killing open-pit mining. With all the eviscerating procedures and additional treatment the tar sands required, extracting oil from the sands sucks up two-thirds of the energy they ultimately render, poisoning the atmosphere with carbon in the process. Producing a single barrel of oil from tar sands emits no less than six times more carbon dioxide than producing a barrel of conventional oil. By 2002, over $10 billion had been invested in Alberta's oil sands, and the industry planned to squeeze out more than 3 million barrels a day by 2012. By then, a handful of companies that had been mining the tar sands, using the world's biggest shovels and trucks, had depleted most of the shallow deposits. Companies turned to the deeper deposits, more than six hundred feet down. Open-pit mining wouldn't do, but they could drill holes and shoot steam down, to push the oily sands out. The new technique, "steam assisted gravity drainage," sent the price of producing a barrel of tar sands plummeting down to around $5 to $7 a barrel. It also required vast amounts of precious fresh water, which after being contaminated with chemicals is pumped into giant festering lakes of waste water. The oil-sands industry gorges on a quarter of Alberta's scarce fresh water — each barrel of oil needing six barrels of water to flush it out — and burns up to a fifth of the entire nation's natural gas supply. According to a leaked report from a Canadian environmental agency, the pollutants from the expanding tar-sands operations will result in enough acid rain to destroy much of the region's majestic forests as well.