Posted on 09/30/2001 5:36:15 PM PDT by aculeus
Why does the United States have to tiptoe so carefully in the Middle East, trying to play one country off against another, careful not to upset certain countries? Why does it even have to get involved in Middle Eastern politics in the first place? One word: Oil. Without the supply of oil that countries such as Kuwait, Iraq, Saudi Arabia, Iran and others produce, the United States would be in deep trouble. And so, the U.S. government repeatedly finds itself drawn into a volatile morass of shifting allegiances.
Is there any long-term solution? Environmental activists have recommended for some time that the United States pour billions into alternative energy such as wind power, biomass and fuel cells - but there is no way these technologies could handle a fraction of the current demand for energy from fossil fuels, let alone the growth projected for the coming decades. But where else could the U.S. come up with the oil to satisfy its needs?
The U.S. government itself mentioned one possible solution in Vice-President Dick Cheney's recent energy report: Alberta's oil sands, a vast ocean of tar-like goo in the northern part of the province. By most estimates, there is more oil in the so-called "tar sands" than there is in all of Saudi Arabia, or about 300 billion barrels that is recoverable using existing technology. That's enough to supply the United States for more than 40 years — plus there's another 1.5 trillion to two trillion barrels on top of that, which would be harder to extract. That's 10 times what Saudi Arabia has.
Alberta's potential was obvious even before Sept. 11, and those attacks have now added even more fuel to the argument. What if Iraq turns out to be involved in planning the attacks? Even worse, what if Saudi-born terrorist Osama bin Laden decides to turn his wrath against the Saudi royal family, whom he despises for allowing U.S. troops to be stationed in the traditional birthplace of Islam? Saudi Arabia has about one quarter of the world's reserves of conventional oil, and last year it supplied the U.S. with 1.5 million barrels a day, or about 17 per cent of U.S. demand. Almost one-quarter of U.S. demand for oil is supplied by countries in the Persian Gulf.
One of the reasons why the oil sands haven't played a larger role on the public policy stage is that until fairly recently, getting oil out of the ground in northern Alberta was time-consuming and expensive. Until the mid-1990s, producing a barrel of oil cost upwards of $15 (U.S.). That didn't leave much room for things like profits when the price of oil was at $20 — and it seemed especially ridiculous given that some OPEC countries can produce a barrel of oil for about $5 or less.
Then Suncor Energy, thanks to prodding by vice-president Dee Parkinson, cut a huge chunk out of its costs starting in 1995 by moving from the balky and expensive bucketwheels it had been using to giant shovels and trucks. Suncor and Syncrude (which copied the move) have cut their costs to $9 a barrel — and that success, combined with the runup in oil prices over the past couple of years, has spurred dozens of imitators to look at oil-sands projects. Conoco, Exxon-Mobil, Shell and other companies both in the United States and elsewhere have done feasibility studies, and more than $20-billion worth of potential oil sands projects are in the planning stages.
There are also dozens of projects aimed at exploring ways of extracting some of the harder-to-reach oil. The current method is not very different from the Clark hot-water process, which was discovered in the 1920s — and that itself was a refinement of the way early explorers boiled the gooey substance in water over the campfire to produce a tar they could patch their canoes with. Newer methods for extracting the oil involve things such as "steam-assisted gravity drainage," which involves injecting steam into the sand and then forcing the oil to drain out for refining.
In the 1930s, the U.S. government and several business leaders (including Henry Ford) reportedly looked into extracting oil from Alberta to help meet the growing demand in the United States. But then oil was discovered in Saudi Arabia, and the seeds of OPEC and the energy dominance of the Middle East were sown — something the United States may want to reconsider in the light of current events. And then maybe Canada could take the place of Saudi Arabia in the American universe.
It's been done in Alberta for decades, granted it isn't as cost effective as pumping it out of a well.
In the early 80's, I was involved with several of them, in Wyoming, Colorado, California, though not the one in Buela Montana, which apparently was the only one to survive. The alberta tar sands have been working for 20+ years and they keep improving the processing processes.
One of the bad things Regan did was to stop this experimental program, as if he had left it going, we would now have an economically viable production process.
Remember that Hitler had a viable process, and as Germany had no oil fields, all their fuel came from coal.
Reagan knew that the Soviet Union was making big bucks from sale of oil, but its costs were fairly high compared to Arab oil. By promising military aid to Saudia Arabia, and quiet negotiations, the price of oil plummeted from $30/barrel to about $10/barrel. The Soviet oil cost about $18/barrel to produce . . . so suddenly what was helping to finance their expansionist policies became a drain.
So at $30/barrel, the Arabs AND the Soviet Union benefitted, but with the Saudi's pumping excess oil out, and pricing dropped to $10/barrel . . .. the profits of everyone dropped . . . and it helped the U.S. economy recover from the Carter years . . .. and it helped bankrupt the Soviet Union.
All in all ..... a great deal!!
For those thinking that we helped to finance the Pakistani bomb . .. remember that the PROFIT levels went DOWN with the drop in prices.
The info from above came from a book about how R.Reagan set out to help push the Soviet Union into collapse.
Mike
1. The quality of raw oil from these tar sands is very poor, so it is necessary to refine this oil extensively before it can be used. Middle East oil, on the other hand, is very "pure" in that it does not need to be refined very much to make it usable.
2. While it is true that Suncor has been able to prefect the tar sands extraction process over the last few years, it is only a matter of time before geological reality starts to have a negative impact on the cost of extracting the oil. These tar sands are located in a deep, diagonal seam in the earth's rock layers, and the oil that is currently being extracted is from the shallowest part of one end of this seam. As this oil is depleted, it will become necessary to either drill through progressively deep layers of rock to get to the oil or develop a method of drawing the oil out through some kind of directional digging process. The thing you have to remember is that this oil is not drilled (as it usually is), but mined, so the directional drilling that is used these days will not help.
On the other hand, I am quite confident that Alberta has tremendous potential to serve as a long-term energy source for the U.S. (not just oil but coal, which is abundant along the eastern slopes of the Canadian Rockies). For one thing, this province is very forward-thinking and pro-business, and I expect that innovative extraction and refining techniques will be developed here over the coming years. In addition to that, oil and natural gas extraction plays such a vital role in the economy here that many of the standard land use approvals are waived, by law, for projects in these areas.
To top it all off, and to answer some other questions here related to the environmentalists in Canada, there isn't a place in Canada, if not all of North America, that is more antagonistic to environmentalists when their objectives cause problems in the local economy. Even PETA pulled all of their billboard and radio ads up here this summer, in response to some veiled threats from the cattle industry. The Alberta Beef Industry had started their own anti-PETA campaign, with the following slogan:
"Save a cow ... Eat an environmentalist!"
Albertans do have a sense of humor.
how long do you think these opec billionaires will sit around not collecting money...not long.
Leni
Why not just let capitalisim discover the viable processes? Government is terrible at inventing economically viable anything. Reagan did the right thing.
Que bono??
Apparently some of these folks prefer that we shiver in the dark or send our kids to bleed and die in some God-forsaken desert BEFORE punching a few more holes in their beloved Gia!
Two million barrels a day from the Alberta sands is a drop in the bucket, espeically at that price.
That said, it could help......along with ANWR and more nat gas DRISTRIBUTION INFRASTRUCTURE.
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well, the government funds a lot of basic research into what are initially very expensive, uneconomical processes, eg NASA, which sometimes later turn out to be quite valuable and commercially feasible, eg satellite communications satelites and weather satellites, and spy satellites.
The projects in the early 80's were quite complex, very very expensive, and hard to do. However, if they had continued, we would have had plenty of oil by now, because we were experimenting (my company only) with 7 distinct possibilites.
One of the things the government is supposed to do is provide for our national security. In terms of energy, they certainly haven't, in fact it has been royally screwed up.
You are absolutely correct here. Reagan prevented us from developing our own synthetic oil supply, but he also used the same thing to defeat the Soviet Union, and cause it to fall apart. Russia, however, still provides about 75%, if I remember correctly, of the natural gas for Western Europe.
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We were working on several different solutions to this type of problem, and had several 'model' solutions we were working on in the early 80's. No more mining, but some drilling and other stuff.
Very good summary, and we have hundreds of years supply in the US and more hundreds in Canada..
You are right, we do buy a lot from canada, we buy oil from Canada that is economical to produce. All you guys act like there are a bunch of guys sitting around smoking cigars deciding where to buy our oil from. We buy it from where it is most economical.
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