Let's recap: Alberta is running its power stations on coal so it can use its natural gas and water resources to produce oil from super-dirty oil sands. The CO2 from those power stations is to be separated through liquefaction at great expense, yielding a clean product that could be used for growing fuel algae.

This product is then polluted with petroleum coke from an oil refinery and transported in liquid form over large distances to increase oil sands production before being sequestered forever underground - fingers firmly crossed.

Why not use the natural gas, supplemented with biomethane from forestry wastes, to produce electricity and/or run cars and trucks? Throw in windmills, hydro and algal biomass grown with the CO2 from the power stations and, you're well on your way to a sustainable energy future. Leave the coal and oil sands where they are, sequestered by Mother Nature.

Rafael:

You have very good ideas but it will not happen for decades. We and specially our very good neighbour, need an extra 5 million barrel a day of that wonderful black stuff as quickly as it can be extracted from the tar sands.

Alberta already produces an unsustainable high level of GHG (1/3 of all of Canada's) and if nothing is done that proportion could go as high as 2/3 when tar sand operations are tripled or more.

To extract 5+ million extra barrels a day, huge amount of energy and water are required. As NG is running out, other energy sources will have to be used. There are only to other logical steady sources, i.e. nuclear or coal.

Six to eight new large Nuclear power plants could do it (and could even replace existing coal powered plants) but would cost much more and take longer to build. Secondly, the population is still divided with regards to nuclear.

Chances are that Alberta will go for the short term with local low grade coal regardless of the pollution created.

Co2 capture from existing + future coal fired power plants + storage in local old dry oil wells is a possiblity for Alberta to meet its NET CO2 emission goal while increasing tar sand operations.

Why not?

The availability of another 20 million barrels of fresh water a day is another challenge. Used water from Calgary and Edmonton cities may be mixed with local fresh water and reused for tar sands operations? Alternatively, tar sand operations used water may be cleaned and reused? However, non of that will be done unless the Alberta government forces it. Chances are that it will not.

Meaningful (high) carbon tax and used water tax may be useful to stop the ever increasing air and water pollution in the area. Chances are that it will not happen soon.

Meanwhile, more studies will be done to kill time and to show people that something is being done. Good old ad campaigns will be used to convince everybody that tar sand operations are good for us and will save Canada etc.

To produce one barrel of synthethic crude requires the equivalent of half a barrel of oil equivalent of natural gas (1.0-1.25 GJ/barrel) and 2-5 barrels of water. The use of pipelines requires the transportation of light oil to thin out the synthetic to be transportated by pipe. The peak of Albertan gas production was in 2002-2003. To try to get higher production numbers will require a lot of untested technology.

In 2006, the tar sand companies made over 65 billion dollars. They are rated at some of the cheapest companies for R&D. The province only gets 2.5 billion in revenue with that revenue about to drop with more tax breaks for the oil sand companies. This revenue will not go back up until 2010-2012.

With the rush to exploit this resource, there has been a lot of overlooking at the medium and long term consequences at what it's been doing. CCS & coal bed gas extraction has led to many contaiminated wells, destroying the lives of the people already living there. These cases should be more vocally exposed. There will surely be negative consequences from this expediante last minute so-called "safe" approach.

@Harvey,
From a 1999 study, a 450MW nuclear facility can produce enough heat and electricity to process 30000 barrels of syncrude a day. At the present production levels of the oil sands in Canada (1 million barrels/day), that would mean at least 33 reactors of this size. With the estimated amounts that the US wants to get from Canada (5 million barrels/day) that would be at least 167 reactors. Even worse.

Large reactor plants would not make for smaller total amounts because in this case, the reactors are ideally sized and placed to process as much tar sands in a given area. Although putting them tegether would lower overall costs it would mean placing them less ideally to process tar sands.

In the study, there is a comparison between a CANDU-3 and a CANDU-9. Even though the CANDU-9 has about 3 times the output capacity, it can only be used to process twice as much oil.

http://www.computare.org/Support%20documents/Publications/Nuclear%20oil%20sand.htm

aym:

I realy meant large (1600+ MW) nuke plants. I believe Finland and France are building one or two each like that. Each such plant could replace about 4 existing or planned local coal fired plants. If 8 large plants are eventually not enough, more could be added when and if required. China (admittedly much larger) is planning on 120 new one.

NG may still be required but at a reduced more sustainable rate.

However, this does not mean that Alberta should not insist much more on ways to improve oil extraction methods to reduce GHG and water usage.

Carbon and water taxes may be required to convince the operators.

Aym:

All of your numbers and facts are off.

Production of one barrel of synthethic crude requires the equivalent of one sixth of a barrel of oil equivalent of natural gas. Third of this energy is added to syncrude as hydrogen. Rate of process water recycling approaches 90%, and all new increase in crude production is planned without increase of water use permits. And actually, water is “used”, not destroyed (remember the law of conservation of mass from chemistry?). The right metrics of water usage would be amount of replenishing water (which is small) and how clean is discharged water.

Upgraded syncrude does not require dilution to be pumpable. Upgrade by itself is performed to make tar pumpable.

I do not know what you define by “province”, but GDP per person in Alberta is more than 70K US (=CAD), or about 40 % higher than in California (about 50K $ per person). Lower provincial taxes contribute much more to brisk Alberta economy than even tar sands. BTW, Alberta is the only province without provincial debt, and it does not have sales tax. Government prefer to get their revenue from income taxes of well-being population, not by imposing choking royalties and corporate taxes.

Profit margins for tar sand companies are between 10 and 20%, so 80-90% of what companies “made” remains in the province, as salaries, taxes, property, etc. Most of the dividend are also distributed among Canadian owners, mostly pension and investment mutual funds. If anyone want to enjoy their profits, shares of Suncor, Syncrude, or Canadian Oil Sand Trust are readily available on stock market in Canada, US, EU, and elsewhere. This is, actually, what “public traded company” is about.

Antiquated study you mentioned estimates energy usage from nuclear reactors to facilitate in-situ steam extraction of crude, not energy required to syncrude upgrade.

BTW, don’t you think that CONSUMER should pay for carbon sequestration of oil he burns, not producer of this oil?

Andrey:

Koweit's GDP (and other large oil producers with small population) is over $1 million per citizen. That's what Oil at $100+ a barrel has done.

Albertans are fortunate and could be so for many decades with the huge oil reserves.

That's why nuclear energy + maximum water recycling should be priviledged to reduce GHG, air, land, rivers, lakes and underground water pollution and contamination to the minimum possible over decades of tar sands operation, Many of the undesired side effects are cumulative.

Harvey:

I beg you pardon, but according to Wiki GDP per capita in Kuwait is 55K, in Saudi Arabia 25K, which is a lot, but not million per citizen. In Kuwait only 1/3 of population are citizens, so even if we count only citizens it is still far from million.

Pollution reduction and wise use of natural recourses in tar sand operations indeed should be #1 priority, no questions about that.

BTW, I was surprised to learn that Alberta produces half of whole Canadian beef (having 1/10 of Canada population).

@Andrey Leven,

According to industry's own numbers, SAGD requires as I have stated 1.0 to 1.25 GJ per barrel extracted. Equivalent to heating 1.5 homes for a single day. This is the method most in use. This means that that at best, it takes a fifth of a barrel to a sixth. The half barrel of oil equivalent came from the book Stupid to the last drop.

http://www.oilsandsconsultations.gov.ab.ca/docs/InterimReport_Appendix_FactSheet.pdf

The latest pipelines laid are bidirectional. They are used to carry lighter oil to be mixed so that the tar sand oil can be carried out by pipeline. Look it up instead of assuming what you know is true when it's not.

http://ostseis.anl.gov/guide/tarsands/index.cfm

Water recyling at 90%? You can get 90% of the bitumen out and that's it. You're mixing water with hydrocarbons with various vapourization rates and solubilities. What comes out from them is not very human usuable. It ends up in tailing ponds which leak. Syncrude has tailing ponds that store 300-600 million cubic metres of tailings. So big they can be seen from space. Now maybe you use some of these tailings again over and over but it still requires 2-5 barrels of water for every barrel of syncrude produced. And if it was possible then why even have such large ponds? Even then, the present projects take over 349 million cubic metres of fresh water. Twice the usage of the city of Calgary.

Dr. David Schindler, who is considered Canada's top water expert, says that between the climate change-induced reduction in Athabasca flows and the seven major tar sands plants either operating or planned, the river's water "is fully allocated, possibly over allocated, right now."

The drug use problem in Fort McMurrey is probably some of the worst in Canada. It's a boom town powered by oil sands exploration and exploitation. The heightened GDP is used to pay for rampent inflation, where couches are rented at $500 a month. Alberta gets more revenues from gambling then it does from royalties. The heritage fund it created to protect the future of Albertans with the money it has derived from oil revenues has remained around 19 billion for the last couple of years. The alaskan fund which started in 76, the same time, is around 36 billion. The Norwegian one, which started receiving money in 96, is over 300 billion. The money hasn't created easier access to schools or schooling. It is a one horse economy with no upgrading of people's skills. What Aberta is doing is gambling its future on it's present and as an old albertan tail sign said "pissing away it's future" after "god has brought back the oil boom".

The federal gov't cut off the oil trusts because of financial abuse. The oil sand companies were and are getting away with huge amounts of money and little of it gets to the government. The majority of the companies such as syncrude are cooperatives of large foreign companies. The majority owners of syncrude are companies like imperial oil. You think they're paying heavy taxes, you wish. Regular people pay taxes. The gov't wants to woo these oil guys and give them carte blanche. When fort mcmurrey wanted to raise taxes guess who got called... the entire city council who got reminded not to bit the hand that feeds you. Corporate stoogery at it's worst. It doesn't build housing, hospitals or schools.

The tar sands are held in trust to the governemnt. They don't have the right to exploit it to the detriment of all for a short term gain. They especially don't have the right to exploit it to the destruction of the long term systems that support any viable long term economy that Alberta may have after the tar sands.

There is opening debate whether this uncontrolled exploitation of the tar sands is in actuality making the lives of people in the province better. Notwithstanding your obvious conservative views on the matter or your obvious idealogy in terms of economics. Who owns Statoil, who just dropped a blllion in the tar sands?

"Antiquated study...estimates energy usage from nuclear reactors to facilitate in-situ steam extraction of crude, not energy required to syncrude upgrade."

Wrong. The study included all aspects including hydrogen production for syncrude upgrading. 1999 is not that antiquated. Have things progressed? Certainly, but it doesn't mean that it has no merit as a source. Various aspects of what a reactor can do for tar sands production are explored from SAGD extraction to hydrogen production to the electricity used for syncrude upgrading. It still implies a staggering amount of energy that is needed to offset the staggering amount of energy needed to extract oil from the sands in the first place. You obviously haven't even looked at it.

If it takes carbon production to produce the fuel then the producers should pay for it as well as the end user who will produce carbon as well. Why should one get a break when the other won't?

In addendem,

Your figures for the profitability of tar sands I think are off. I'm not going to go around and check everywhere but in light of the fact that normal saudi crude costs around $3 a barrel to pump out of the ground, Syncrude by their own estimates put it at $12-15 a barrel (I believe, they have had losses only in 1 year around 78-79), and provincial reps say it costs 25-30 a barrel for it. Shell is looking at oil shale in the northern US at costs of production of $30/barrel.

Given this and that the price of a barrel of oil has gone up from $50/barrel (2005) to it's present day $100/barrel price for selling it, your estimation of the profitability is on the low side.

Andrey:

You must be using older stats. Kuwait has about 880,000 citizens and produces about 3 million barrels of oil @ $100 each a day. If my maths are correct, this is equivalent to $1,036,931 per citizen per year. If you add the other goods and services produced you may get a few $$ more.

Kuwait's oil reserves are about 101.5 billion barrels. They can keep pumping for a while.

Harvey, Aym:

I do not do no calculations.

Number of GDP per person per year (as PPP) for Kuwait is from Wikipedia (box on the right):

http://en.wikipedia.org/wiki/Kuwait

Profit margins and alike on tar sand companies is from Yahoo Finance, for example for Suncor here:

http://finance.yahoo.com/q/ks?s=SU

BTW, water usage for tar sand operation is less than 0.5% of total discharge of Athabasca River.

Andrey,

that is for total operations of a company. The way it's put, they could write off drilling/prospecting for oil anywhere against any profits made. That obviously hides any true profits from existing operations like the tar sands.

And I reiterate from above ...Dr. David Schindler, who is considered Canada's top water expert, says that between the climate change-induced reduction in Athabasca flows and the seven major tar sands plants either operating or planned, the river's water "is fully allocated, possibly over allocated, right now."

It's about not only the amount but when it is taken and the impact of what is taken. If the water taken out negatively affects every other economic activity, it should be looked at objectively.

Aym:

This is how things work in this business. Tar sand operation is extremely capital-intensive, plus the whole oil business is cyclical. Companies invest heavily and expand when price of oil is high, and live on these investments when price for oil is low.

Currently, there are three big open pit mines (Suncor from 1967, Syncrude from 1978, and Shell Canada from 2003). Four new mines are in different stages of approval and construction. All new projects will use much higher rates of water recycling, oil extraction, and wastewater treatment. Numerous in-situ recovery projects use much less water intensive (recycling up to 90%) and produce much less pollution and wastes. Industry (and environmental practices) are evolving. Take a look, for example, here:

http://www.greencarcongress.com/2008/01/suncor-board-ap.html

It is truly sad when formerly respected scientist like Dr. Schindler become “climate scientist”.

I bumped couple of times in absolute numbers of water allocations from Athabasca river for tar sand operations (about 3.5 cubic meter per second, and estimations from total oil production multiplied by water usage per oil barrel confirmed the number), and did not believe my eyes. But simple estimations proved that such numbers are correct. Total discharge of Athabasca river, according to Wikipedia, is 21 millions dam3 per year (stupid unit of cubic decameter, or 1000 cubic meters), which translates into average flow of 700 m3 per second. Of course total discharge at the mouth is different than minimal flow somewhere in the middle. Another number I bumped into was that tar sand operations removed max 2% of local river flow during all history of operations.

@ Andrey

The condescension is very high is your posts. What makes you think I don't understand what is going on or how the process works or how even the business works or how business works in general? All busnisses are cyclical in nature. All the initial investments were made years ago when the price was low.

Your previous posts give the perception that they were barely profitable when they are not. You quote the total worldwide operations as a sort of proof of profitability when the figures obviously don't separate oilsands from the rest of the costs.

Why is it that Dr Levin is formerly respected? He actually lives in the area. He has first hand knowledge of the destructive practices going on. He knows the questions to be asked. He has seen the malfeasance going on. The idea that any science that disputes open ended industry is misguided or inferior is just wrong.

The arguement that the various projects is innoculous is easily refuted from Dr Schindler's own evaluation of the situation. It is admirable that they are improving the intensity of water use but in conjunction with increased production, it just means that it's the same same levels of stress on the watershed.

"BTW, don’t you think that CONSUMER should pay for carbon sequestration of oil he burns, not producer of this oil?"

Certainly. A tax of $50 per tonne of fossil carbon content, to pay for global warming amelioration efforts, would be a good start.

Richard:

Normally, all taxes, duties, levies etc applied at the producer level are passed on to the end users.

A new $50/Ton carbon tax would add about 5 x $50 = $250 extra a year ($5/week) for gas, for low consumption vehicles. Of course larger gas guzzlers would end up with and extra $500 tp $800 a year. That seems fair to me.

Alternatively, it could be added on the annual registration fees. The average CO2 produced per year for every vehicle is well known. The end results could be about the same but people driving much more than average would get off for less and under users would pay more than they should.

A levy at the pump would better distribute the carbon tax and would apply to everybody, including tourists.