Tar sands

oil sands or bituminous sands

A mixture of bitumen, sand, water and clay. Technically, bitumen is neither oil nor tar, but a semisolid, form of oil which will not flow toward producing wells under normal conditions, making it difficult and expensive to produce. Tar sands are mined to extract oil-like bitumen which is turned to synthetic crude oil or refined directly to petroleum products by refineries. Conventional oil is extracted by drilling wells into the ground whereas tar sand deposits are mined using strip mining techniques, or persuaded to flow into producing wells by in situ techniques which reduce the bitumen's viscosity with steam (and / or solvents). On average bitumen contains 83% carbon, 10% hydrogen, 1% oxygen, 0.36% nitrogen and 4.8% sulphur.

In 2006 a decision by Shell to pay $2.2bn (£1.18bn) for a Canadian oil company with only 22 employees and no reserves recognised by the USA financial regulator surprised some in the business. BlackRock Ventures owns three properties containing estimated "reserves" of 209m barrels of tar-like bitumen that saturate the sands a relatively small way below the surface. SEC which regulates the New York stock listings of Shell and other major oil companies, does not recognise oil sands in its calculations of reserves. Neither do many industry experts when they are assessing the world oil order.

Altogether, oil from oil sand costs somewhere between $15 and $20 a barrel to produce on average, at least a few dollars more than pumping liquid oil. But with oil prices above $60 a barrel and technological breakthroughs making it easier to harvest oil from sand, business is booming. In the past it was seen as a prime opportunity con trick companies. Many a broker will warn that companies may buy a plot of tar territory then use this as a ruse to boast of vast profit potential to get money from eager investing. Many companies have tried to join the oil sand industry in the past and collapsed. Oil shale is more likely now to suffer from this.

Tar sands deposits are found in over 70 nations throughout the world, but 3 quarters of the world's reserves are in two regions, Venezuela and Alberta, Canada. While tar sands were used by the ancient Mesopotamians and Canadian Indians, they have only recently become considered to be a major part of the world's oil reserve, they have become economically extractible at current prices with current technology. To distinguish the bitumen and synthetic oil extracted from tar sands from the free-flowing hydrocarbon mixtures known as crude oil that oil companies have traditionally produced from oil wells, tar sands are often referred to as non conventional oil. Tar sands represent as much as 66% of the world's total reserves of oil,

Most of the oil sands of Canada are located in three deposits in north Alberta. The three deposits are the Athabasca - Wabiskaw oil sands of north northeastern Alberta, the Cold Lake deposits of east northeastern Alberta, and the Peace River deposits of northwestern Alberta. They cover over 140,000 square kilometers (54,000 square miles) an area larger than Florida and hold at least 175 billion barrels (175×109 bbl) or 28 billion cubic metres (28×109 m3) of recoverable crude bitumen, which amounts to 3 quarters of North American petroleum reserves. In addition to the Alberta deposits, there are major oil sands deposits on Melville Island in the Canadian Arctic islands but they are unlikely to see commercial production in the foreseable future.

Canada has become an energy powerhouse by separating petroleum from sand. Oil sands _ also called tar sands _ are found in an area almost half the size of Colorado spread across central Alberta, 240 miles northeast of Edmonton. The deposits account for roughly half of Canada's crude oil output, or about 1 million barrels of oil a day. Canada estimates the sands will yield as much as 175 billion barrels of oil, making it second only to Saudi Arabia in crude oil reserves and enough to satisfy U.S. demand for at least a generation. A group of congressional staffers recently toured Alberta, eager to learn whether the unusual oil industry here can somehow serve as a model for oil shale production in Utah, Colorado and Wyoming. "If they can do it, we in Utah can do it," said Sen. Orrin Hatch, R-Utah. "Unconventional fuels like tar sands and oil shale are the real thing." Unconventional oil petroleum in any form other than the familiar fluid has sat on the sidelines of the oil industry for decades. The major source of unconventional oil in the U.S. is shale, but all sources are getting a new look.

Another area of oil sand resources is Located in east Venezuela, north of the Orinoco River, the Orinoco oil belt vies with the Canadian oil sand for largest known accumulation of bitumen in the world. Venezuela prefers to call tar sands "extra heavy oil", although distinction is somewhat academic, the extra heavy crude oil deposit of the Orinoco Belt represent nearly 90 per cent of known global reserves of extra heavy oil.

Tar sands development has a direct impact on local and planetary ecosystems. In Alberta, this form of oil extraction completely destroys boreal forest, the bogs, the rivers as well as natural landscape. The mining industry believes boreal forest will eventually colonize the reclaimed lands, yet 30 years after the opening of the first open pit mine near Fort McMurray, Alberta, no land is considered by the Alberta Government as restored.

The major company in Canada is syncrude

The written history of the oil sands dates back over 200 years ago when the first Europeans spotted bitumen along the riverbanks of the Athabasca River. The local Aboriginal people had already long been tapping the resource to waterproof their canoes.

Another useful table, from Canadian analysts McDep Associates, shows total recoverable resources in millions of barrels:

Suncor Energy 12,500, Nexen 2,500, Imperial Oil 10,000, Western Oil Sands 2,200, Can. Natural Resources 9,500, EnCana 2,000, Petro-Canada 3,700, OPTI Canada 1,900, Shell Canada 3,600, Deer Creek (Total) 1,800, Can. Oil Sands Trust 3,200, UTS Energy 1,100, Husky Energy 2,900, BlackRock Ventures 300

geopolitics

On 20 January 2005, most of the world's journalists had their eyes firmly on the Washington inauguration of President Bush. But if they'd been looking a little further east, they might have noticed something just as important happening in Beijing. The leaders of China and Canada. When it comes to proven reserves, Canada does rather better: after Saudi Arabia, it has the most in the world. Canada's Rocky Mountain province of Alberta is overflowing with oil sands. Concentrated in north Alberta, in a region as big as Florida, the sands contain vast quantities of so called bitumen, or super-heavy oil. Dig up two tons of sand, heat it and process it and you'll have enough oil to fill a 42-gallon barrel of oil. Official estimates put Canada's extractable total at 180 billion barrels. The problem, up until recently, has been the cost: it costs about $20 a barrel to turn sand into liquid oil, so during the long bear market in oil no one was interested in Canada's assets. Enbridge, one of Canada's top energy firms. Enbridge is planning a $2bn, 750 mile pipeline stretching from Alberta, the province where Canada's oil sands are concentrated, to a Pacific seaport in British Columbia. And PetroChina now has tentative rights to use half the pipeline's capacity of 400,000 barrels of oil a day. And it may take an equity stake in a pipeline. The result? China has been buying up all the bits of Canadian oil sand land it can get its hands on, as well as investing in a variety of start up producers and signing a deal for a £1.95bn mega pipeline to the Pacific coast to supply oil from Canada to the Asia Pacific region. The pipeline will cross the Rocky Mountains before tankers ship the oil to China, South Korea, Japan and America. This is the kind of deal that should have the USA worried. At the moment, the USA buys more energy from its northern neighbour, mostly oil and natural gas from traditional sources in eastern Canada, than from any other single country. Several American companies, ChevronTexaco, Exxon Mobil ConocoPhilips and Suncor Energy have major interests in Canada's oil sands. But China has made it very clear, not least in the audacious $18.5bn bid by its number three company, known as CNOOC, for USA energy giant Unocal last week, it has no qualms at all about directly challenging the USA for the oil resources it needs to keep growing. And Canada has no problem with that. "What we're suggesting as China searches the world to find a secure and reliable supply of oil is they should be looking here," Alberta's premier Ralph Klein told The Wall Street Journal last year. Canada's leaders can see which way the wind blows.

Oil shale is a general term applied to a group of fine black to dark brown shales rich in organic material (called kerogen) to yield petroleum upon distillation. The kerogen in oil shale can be converted to oil through the chemical process of pyrolysis. Estonia, Russia, Brazil, and China currently mine oil shale, however production is down due to economic and environmental factors.

http://www.oilsandsdiscovery.com/ The Oil Sands Discovery Centre is located in Fort McMurray, Alberta, Canada

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