February 24 - Tar Sands and Peak Oil

On this day in 1982, Dome Petroleum and Hudson's Bay Oil and Gas withdraw from $13.5 billion Alsands project, the Alberta Tar Sand project. (http://www1.sympatico.ca/cgi-bin/on_this_day?mth=Feb&day=24) For those that don't know, this is one of the largest petroleum deposits in the world, possibly equal to 1/2 of the total world reserves. The thing is, usable petroleum is difficult to recover. Until oil prices hit about $40 per barrel, it is not really economically feasible.

Wanna re-run that last sentence? How long has it been since oil prices hit $40 per barrel? And it's stayed above $40/bbl ever since, too. The upshot is that, today, 1/5 of all oil consumed in Canada is sourced from the oil sands and more production ability continues to come online.

It is doubtful, given the long time until fruition, that Dome and Hudson's Bay are regretting their bailing out, but for those who stayed in, the future looks pretty rosy.

Almost all predictions made prior to 2004 by Peak Oil Theory have the world peak occurring prior to 2004. As each peak passes, a new estimate of the peak needs to be made because the theory does not seem to take into account that vast unproven reserves might become proven such as the Tar Sands in Canada and Venezuela, Oil Shale in Canada and the U.S., and the previously unproven deep Gulf of Mexico fields like the Jack 2. Finally, there is a theory of abiogenic "deep oil" reserves that, here and there, now and again, proves to have merit such as in the White Tiger field in Vietnam. If the abiogenic theory proves itself, oil may be effectively limitless for at least the next few hundred years.

In any case, while oil may run out one day, there are so many unproven reserves, so many places left to look and, at current prices, so many economic things we can do to recover it, it is very difficult to predict when except to say that it is unlikely to happen within the lifetime of anyone alive today.