Tar Sands
The bitumen-impregnated sands of Alberta, Canada are said to rival the oil reserves of Saudi Arabia, but extracting and refining it from these sandy clumps requires a great deal more energy than the light to medium crude of the Middle East. Sunco currently produces 1 million barrels of synthetic petroleum a day from its oil sand operations in Alberta, Canada. It plans to increase production to 2 mbd by 2010. Photo courtesy of Suncor.

Tar Sands: Blunting Oil’s Peak

2005 ASPO oil conference presentation by Suncor executive vice president Michael Ashar on the potential of Alberta’s ‘oil sands’.

By EV World

It can't be said that the organizers of the November 2005 ASPO USA "peak oil" conference held in Denver weren't willing to consider the role to be played by unconventional hydrocarbon reserves in replacing declining conventional oil production worldwide, including oil shale and tar sands, both of which are in abundant supply in North America. They asked Michael Ashar, an executive vice president with Suncor, one of the early Canadian tar sand pioneers, to talk about these rich, bitumen-laced deposits, which rival, by some estimates, the oil reserves of Saudi Arabia.

I have a very different perspective to share this afternoon," he began. "Think abundance, not depletion when it comes to oil. Think mining, not drilling. And think possibilities as opposed to paucity".

Ashar has 30 years of oil refining experience and from 1996 until 2004 ran Suncor's oil sands operation in Canada, which when it commenced in the early 1960's was, in his words, one of the biggest energy gambles in history.

"First the project is located in a very remote region with huge logistics challenges. Everything from roads, power and social infrastructure needed to be built. And you needed to recruit, house and feed a workforce in the thousands to do that".

Equally as daunting at the time was the gamble of taking a technology that had only been proven on the experimental level and scaling it up one thousand-fold. And all this has to take place in temperatures ranging from +100 degrees F to minus 80 degrees F.

"Extremes to which equipment has never been tested", Ashar stated. "Finally, if the operation is to be successful, the product must still be shipped thousands of miles to the market.

"Any takers?" he asked.

He took several minutes to talk about Suncor and its operations, which include not only tar sand recovery and refining in Canada, but also pipelines, filling stations, and even a budding wind farm business.

But the jewel in the crown is the company's leases on what they calculate is the equivalent of 11 billion barrels of refined synthetic petroleum.

"That is equal to half the proved reserves of the United States. But that is just one piece of the oil sands pie. In its entirety, Canada's oil sands contain an estimated 175 billion barrels that are economically recoverable with current technology."

He estimated that this number could go as high as 300 billion barrels with improved technology, making it the "world's largest reserve, bar none".

But, Ashar noted, there are significant differences between Saudi crude and Alberta's bitumen, the development of which he characterizes as more a manufacturing operation than conventional exploration and drilling.

But that turns out to be an advantage, because of its very nature, tar sand exploitation requires very little investment in exploration, unlike oil.

"In some places on Suncor's leases you can literally discover oil on the toe of your boot."

In addition, whereas some 50 percent of an oil field can be recovered, 90 percent of a tar sand deposit can be mined and processed. This, as well as Canada's progressive attitude toward investments in this capital-intensive industry and it's relatively close access to the U.S. market are important economic advantages that the tar sand industry enjoys compared to overseas oil projects.

"What does this mean to peak oil?" he asked. "It almost certainly doesn't mean complete replacement of decline in conventional production, but oil sands production should help blunt the peak."

To find out how much of a contribution he envisions tar sands making in the future, be sure to listen to the complete 24-minute audio using either the Flash-based MP3 Player above or by downloading it to your computer hard drive for playback on your favorite MP3 device.

EV World expresses its thanks to ASPO USA, Steve Andrews and Randy Udall for granting us permission to attend and record this historic event. The next conference will be held in Boston, Massachusetts in 2006.

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Published: 03-Jan-2006


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