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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.

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