Tar Sands Update
You might not know this, but Canada has oil reserves of 170 billion barrels, more than Iran and Nigeria combined. This fact is not widely known since much of that oil has been considered "not economically recoverable," lying deep underground in a mixture of bitumen, a thick, tarry substance, sand and water known as oil sands or tar sands. Development of these tar sands, located near the Athabasca River, by Suncor Energy, began in the 1960s but has been conducted at a relatively small scale because of the costs involved. Only recently, with declining supplies and increasing prices have attempts begun to try and ramp up production, especially after PetroChina acquired a 60 percent interest in two major wells in Alberta in 2009. This was followed in 2010 by Sinopec paying $4.65 billion for a 9 percent stake in Syncrude Canada Ltd.
Chinese investors find this resource to be attractive, since Canada is considered to be a low political risk when compared with, say, the Middle East. As of 2010, the three biggest of many players were Syncrude Canada, Suncor, and Albian Sands, a joint venture of Chevron, Shell Canada and Marathon Oil. BP also has a substantial stake, with a 75 percent interest in Terre de Grace, which it also operates.
Projections made after slowdowns in offshore production show that as much as 36 percent of American oil could be coming from Canadian oil sands by 2030. According to oil expert Daniel Yergin, "Canadian oil sands”¦have gone from being a fringe energy source to being one of strategic importance."
Sounds good so far, but not so fast; there are numerous major environmental problems and risks associated with this technology.
Image of Oilsands development in Northern Alberta via Shutterstock.
Article continues at ENN Affiliate TriplePundit.