287. ALBERTA OIL SANDS COMING ON STRONG
A new report by CIBC World Markets in Toronto has some interesting data on the Alberta Oil Sands. Some highlights:
- By the end of the decade, oil sands will be the leading factor in supply growth, surpassing both conventional oil and deepwater.
- Alberta will be the world leader in adding new oil production in the next decade, surpassing Saudi Arabia, Brazil, Kazakhstan, Azerbaijan, Angola, Nigeria, Mexico, UAE and the USA.
- Annual additions to oil sand capacity will increase sharply in the next 5 years: 150,000 bpd in 2006/2007, 300,000bpd in 2008, 400,000bpd in 2009, 500,000 in 2010.
- In the period 2006-2008, 58% of new capacity will come from non-conventional oil (47% deepwater, 5% Canadian oil sands, 3% gas liquids, 3% other heavy). By 2010, non-conventional (oil sands, deepwater, gas liquids) will account for about 25% of all oil production. (And that still doesn't take into account the other elements of the non-conventional spectrum: ethanol, biodiesel, CTL and GTL.)
- The report also has a detailed list of new Canadian oil sands projects which are scheduled to come on stream.
However, it's not clear why that should be true. The area of the tar sands is vast -- 54,000 square miles, roughly the size of Florida. So there's plenty of room for everybody. True, there may be limitations on natural gas, but we've already seen one compelling work around: nuking the tar sands. In fact this seems to be the idea that wouldn't die. From an April 13, 2006 article in the Calgary Sun:
The province's first nuclear power plant could open in the oilsands within a decade, says a Calgary-based company in talks with several oilpatch players and government officials to bring the project to reality.So why is it exactly that oil sands production will hit 4mbd in 2015 and then just stop dead in its tracks? I could see growth halting due to the Kyoto Protocol or some other hard limit imposed by the government, but that doesn't seem likely given the public's current level of political activism, and their profound addiction to the private automobile.
"It'll come -- it's just a matter of the date," said Wayne Henuset, director of Energy Alberta Corporation.
There's also an inconsistency between peak oil sources on this topic. ASPO gives a maximum figure of 4mbd for all heavy oil, but (as we saw in 187. FISHY HIRSCH WEDGES) the Hirsch report assumes that heavy oil production in Venezuela alone can be jacked up from 0.6mbd to 6mbd in 10 years as part of a U.S.-driven "crash program" of mitigation.