Alberta oil sands on 60 Minutes

Did anyone else happen to catch the 60 Minutes piece on the Alberta oil sands? What most struck me about it is that the situation in Alberta seems to be a microcosm of many problems we've discussed with respect to peak oil. Namely:
  1. The technology required to mine the sands and convert it into refined oil is expensive and the whole operation has a fairly low EROEI.
  2. Lack of appropriately trained labor force, coupled with the fact that Fort McMurray, Alberta is not a particularly desirable place to live
  3. Environmental disaster (although at least Canadian law says requires that old mines are refilled and trees are replanted)
  4. Geopolitical factors: Namely, China is in a desperate competition with the US for these resources, and politicians are suggesting that Canada should use the oil sands to gain leverage in their trade disputes with the US
Another interesting aspect of the story was the appearance of T. Boone Pickens. At the beginning of the segment, the interview has Pickens looking like he's betting the farm on the oil sands:
"We're managing $5 billion here. And, about 10 percent of it is in the oil sands. So, it's the largest single investment we have," Pickens says.

And if oil sands are the answer for investors, does Pickens think the oil sands are the answer for the United States?

"Oh, I think so," he says.

I was surprised to hear this, since as we know, Pickens has gone on record predicting that gas prices are going to remain at all time highs, and the reason for that is because of a shortage of world supply. Only at the end of the CBS piece does Pickens mention the end of cheap oil:
Does Pickens think the days of cheap oil are gone?

"They're gone," he says. "From what we knew as cheap oil, when I pumped gasoline in Ray Smith's Sinclair station on Hinkley Street in Holdenvale, Oklahoma, 11 cents a gallon, that's gone."

Will we ever again see $1.50 a gallon? "We won't ever see $1.50 a gallon. No, that's gone," says Pickens.

Unfortunately, the implications of this statement were far overshadowed by CBS's portrayal of the oil sands as the greatest energy source ever known to man. Indeed, they even ask, "Will the availability of an enormous supply of secure oil right next door mean America will have little incentive to reduce its dependence on oil?"

The answer, of course, is yes. According to CBS, it is inevitable:

But unless the Chinese go back to bicycles and Americans trash their SUVs, there will be buyers — for oil anywhere, no matter how it’s found or mined. Right now, Canada has become the land of opportunity for oilmen. They will tell you there is little else on the horizon.
Business as usual it appears. Id like to see in addition to the annual expected barrels of oil equivalent from tar sands, the energy required, employees required, environmental damage estimates at that scale, how much natural gas is diverted from US that US will have to buy elsewhere, how much indigenous land is nationalized,etc?

I assume Suncor and others have done this - would just like to see the numbers....

Matt Savinar over at is a specialist in predicting an eventual military invasion of Canada by the United States, and in collecting data to substantiate the plausibility of this prediction.  The tone and content of the "60 Minutes" piece would seem to be an item that Matt could add to his collection on this score.  Does anyone out there care to comment on how realistic Matt's prediction is?
When I signed up for my Phd, I tried to get into the Dept for Study of US Invasion Tactics for Canadian Provinces, but the program was full, so I dont know.

But if you look at the bigger picture, Canada has trees, and natural gas, and water and tar sands. The US has people and art, and bombs. I guess one could plausibly make that conclusion.


I have been wondering if Canada breaks up that we might not acquire some extra states. If Quebec goes out, the possibility of the provinces going their own way, possibly in blocs like the Atlatnic Maritimes is possible. We might get Alberta as the 51st or 52nd state.

That is more likely (and not very likely I think) than our invading Canada. The American people would not go for it. We will go through a great deal of economic adjustment instead of doing something incredibly mean spirited and greedy.

We ARE mean spirited and greedy. So are Canadians and so are Chinese and ...Some societies are LESS mean and LESS greedy than others but evolution has made us resource acquisition machines. I do not dispute reciprocal altruism and genuine sacrifice for ones tribe, but lets face it - increased energy per capita has made everyone pretty much June and Ward Cleavers. Decreased energy per capita... how does George Monbiot quote it "we'll be fighting like cats in a sack'.

It may not even be viewed as a bad thing when/if the time comes - US protects canada militarily in exchange for resource flow. I think there was a conservative think tank put out a piece in 2005 implying that NAFTA was the groundwork for an economic/military/resource conglomerate (I'll try and find the link)

I dont think there will ever be a 'battle', but in truth Ive never really researched it. I did try to look at [LATOC] but couldnt find any details.

p.s. Canadians (probably due to more degree cooling days) actually consume more oil per capita than americans...

oops - meant 'degree heating days'. Though the way things are going one never knows...;)

Canadians do use more energy per capita than Americans. That is the last table I saw just before Christmas.

But we agree that it will not be a military action.

NAFTA does work, mostly, for our benefit. It does help integration of the economies and we can get a great deal from Canada. But with rising transportation costs in the future, that makes good sense for them too.

Yes we do use more energy.  My guess is that we have similar building standards and colder weather.  I have to ride my winter bicycle to work 4 to 5 months each year and this is in the warm south and I use my summer bike whenever possible.
On this university campus nearly every building has NO insulation!  The new buildings have about 2".  The home standards changed in 1991 and were upped from 4 to 6" in the walls.  My father was doing that for custom homes in the late 1960's.  We have an industry that only adopts whatever standards we can get the government to pass.

Energy is so cheap that nobody cares yet.
Come on - taxes on my house are over 2x what it costs for natural gas, hydro and phone.  The car is similar - purchase, maintaince and insurance dwarfing fuel costs.
In the case of my 1991 Chevy Sprint (around 60 mpg US) it cost more for brake and exhaust repair than gas!

"Green" friends live in nice neighbourhoods with good "community" but pay for it with old houses that have no insulation to speak of.
We sure see a lot more trucks / SUV'ish things on the roads in Michigan than here although I see enough mini-vans and that ilk to make me puke.  Cars choking the streets and surburbia out the wazoo is the way we've gone too.  Howver, unlike friends in the USA, up here you don't pick neighbourhoods because they are safe or because the schools  are not going to have the roof collapse in winter.

Going into a different threat.

I want to believe in the book Fire and Ice and that we are diverging from the USA.  Frankly the USA scares the @#$#@$ out of me.  The government is disconnected from the people and US moderates / progressives I know are getting pretty scared of the way their country is going - but it doesn't seem to stop.  There should have been riots over Robberts nomination to the court and I see that Alito will likely walk right in without a sacrifical Dem in the way.

My only consolidation is that you're destroying your own country now with the mountain top removal for coal; having the polluters in charge of the EPA etc etc - except that we're also getting the mercury in the air ...

There are very progressive factions within the USA - but I've pretty well given up on them.  With thousands of white collar jobs now going overseas where PHDs are a dime-a-dozen you're not going to have a middle class much longer.  It's a great place if you're rich or have a marketable skill.

The USA dream that I grew up in during the 60's is dead, gone and burried.  The fangs are bare now, the blood is dripping - nobody harbours illusions about what the country is about except perhaps our Regressive Conservative party up here.

If there were riots over a very intelligent jurist who happens to be conservative, than it would have only happened in a blue state.

I work in construction and we are introducing styrofoam block construction that was developed in Canada with an R rating of 40 - well above the required 18 and very good.

I do find it funny that in colleges the ratio of liberals to conservatives for professors is about 9 to 1, while in the military for officers it is flipped and is 7 to 1 or 6 to 1.

America is not dead yet.

As the college professors (and journalists) make more money, they tend to go red. As the military officers get screwed on pension and medical benefits (and get sent to Iraq) they tend to go blue. Things are reequilibriating.
Imagine the Canadians sitting quietly by. Of course they'll never have heard of this event- or as written about here-,1-0@2-3214,36-733421@51-733423,0.html  translated here-
Everyone from the Cheney-ites on down consider it all to be a Mad Max future. What an intense failure of the imagination.
Thanks for the responses - and by all means, keep them coming.  One of the reasons why this site is so useful to me is because the responses I get to questions I pose tend to act as a healthy check on my own sometimes extravagant opinions about things.

Let me extend the line of my original question a bit:  There have been a lot of steps taken in recent years towards establishing systemic and operational integration between the US and Canada with regard to military matters.  However, though I don't recall details offhand, I remember that some months back there were many voices in Canada (including across most of the Establishment political spectrum) who issued strong protests about certain aggressive steps the US was pressing for with regard to this integration.

I guess my question is this:  What role, if any, are ruling elements in the US envisioning for this military integration as a possible means for facilitating an eventual takeover of Canada?

I called Cheney but he was taking a nap. Rumsfeld is out of town but will get back to me then I'll post here what I learn...

((seriously, no one can answer your question and the few that would have true insight into it, wouldnt be posting here...(or anywhere))

Oh come on now - there must be some disaffected former intelligence analysts, diplomats, or high-ranking military officers out there who can advance some plausible speculation - well-rooted in personal experience - in response to my question!
Wasn't there controversy a while back about a US proposal to base Star Wars installations in Canada?
In my studies of bioregions and the break up of monolithic nation states, the theory is that places like Alberta and Saskatchewan will
be more than happy to join Montana.

The talk gets louder when Quebec starts making independence noises.

BTW-on that 60 Minutes segment, I heard hot water mentioned twice, but never heard how they planned to heat the water (say with NG).

Also,  I know that Canada just ended a fight to limit the amount of gas used to create the synfuels.

And this on who will be "paying a premium" for the chance to refine this stuff:

EnCana drops plan to process oilsands at Valero refinery
Last Updated Thu, 15 Dec 2005 16:57:08 EST
CBC News

EnCana Corp. and Valero Energy Corporation announced Thursday they have dropped a plan to process heavy crude oil from Western Canada oilsands at Valero's refinery in Lima, Ohio.

You have researched the potential break up of states? How about the USA? Depending on how things develop I feel that is a probability worth considering over the next 5 or 10 years. What do your studies suggest?
Yes Agric, my "studies" basically started with the straight line boundaries-ex Colorado- of US West.

Abritrary lines that must be temporary.

BioRegions of Energy and Arable land/potable water will  form first.

Or lack of energy delivered from above-say the New Orleans Gulf Coast.  

I mentioned Canada because Canada actually has a spelled out way for the Provinces to secede.

You might enjoy reading The Nine Nations of North America by Joel Garreau. It's twenty years old and out of print, but still available from Amazon as of the last time I looked. It looks at where the geographic and cultural fault lines (which are independent of political boundaries) may lie.
Exactly, Stoneleigh

A favorite book of mine and combined with Jane Jacobs'
Cities and the Wealth of Nations (that our cities are in transactions of decline)

and James Kunstler's-
"In The Geography of Nowhere I argued that the post-war enterprise of building suburbia as a replacement for towns and cities in the United States was a self destructive act. I argued that the living arrangement Americans now think of as normal suburban sprawl - is bankrupting us economically, socially, ecologically, and spiritually. I identified the physical setting itself - the cartoon landscape of car-clogged highways, strip malls, tract houses, franchise fry pits, parking lots, junked cities, and ravaged countryside - as not merely the symptom of a troubled culture but in many ways the primary cause of our troubles."

These three books form a foundation of sorts for my studies.

I'm now looking to the "Nine Nations" and their Capitol's and Second Cities for verification of trend.

Of course, the great irony is that Garreau also wrote Edge City which is a fairly positive account of everything Jacobs and Kunstler despise.
Why did I think you were going to bring up Edge Cities.

Tyson's Corner becomes a new node, farther out, linking the outstretched veins with rings or beltways.

This can only work with cheap energy.  And the center must remain vital.  If only for geographic shortest route from Point A to Point B.

I'd be very interested in what you conclude about the possible break up of the USA, where the boundaries are most likely to be, what the most likely triggers for the break up are, and how the constitutional disentanglement (if still relevant) would occur.
The parties are polarized but the people are not. America is not blue or red, or even purple, it's pink.
where the boundaries are most likely to be-

Here's a nice place to start

 the most likely triggers for the break up are-

Energy, either lack of or hoarding.

Food, same as above.

Natural Disaster, one too many to handle.

Or a combo of the above.

I believe that collapse is already upon us.  And has been for at least
5 years.  With Kuwait's announcement, we're depleting at over 10% per year.

And of course there's Gaia and the fact that 7 Giga Tonnes CO2 must be removed from human annual output by 2020 or sooner as
Antarctica (rising seas) and the Amazon (biomass dieoff, end of CO2 sink) continue to deteriorate.

Peace, James

The introduction to the piece said that tar sands, excuse me, OIL sands would provide plenty of oil for us for the next hundred years.  What rubbish!  The truth was hidden later in the piece - it's all in the numbers:
Current oil use worldwide: 84mbl/day.  Projected for 2015: 105mbl/day.
Current oil sands production: 1mbl/day.  Projected for 2015: 3mbl/day.
This is going to "solve our problem"???
And I don't recall that they even mentioned that, most of the year, they have to use massive quantities of natural gas to melt the crap enough to be able to scoop it out of the ground.  And natural gas is running down quickly in North America.
By the way, those giant trucks ("toys") use over 100 gallons of diesel fuel per hour.  Not good for yer EROEI...
This 60 Minutes piece qualifies as just more "don't worry" propaganda.  Occasionally they do somewhat better, but they still serve the "powers that be" as much as the rest of them.
Furthermore, there was something about having to fly the workers "daily from civilization" because Fort McMurray is so undesirable. Talk about the irony...
Yankee, are you aware of any latest and greatest publication on EROI of tar sands? - This one on Econobrowser is latest I found.  It would be appropriate if there was an analysis with as extensive boundaries as Patzek and Pimental used on Ethanol from corn. I would wager dollars to donuts that Suncors internal 'cost' projections include flying employees back and forth in dollar terms but not energy terms. The two would be pretty similar if oil stayed around $60 and the world did not enter net depletion...
A quick google search doesn't turn up any better reports on EROEI of the tar sands, but maybe another editor or reader knows of one. I wouldn't be surprised if the technology is evolving too quickly to be able to accurately pin down the number.
any of you 'oil ceo's out there know if the oil companies do analysis in EROI or just dollars on projects such as these? Again, if your internal cost of oil is $10/bbl you still get alot of $ profit at an EROI of 2 to 1 (use 1/2 barrel costing $5 from inventory to make 1 barrel and sell for $60.

EROI only makes sense at a societal level, not an individual company. Which explains why no one is pounding on Charlie Hall and Cutler Clevelands door to fund EROI research....

I think it is important that as we look at global energy production / consumption figures in the future, we understand how much energy is actually being used by the energy sector to produce their surplus energy.

Net energy is all that matters. So if they can ramp up to 3mbd and the EROEI is 3:1, then really they are only producing a net of 2mbd...

Actually we dont know this. In the past 10 years, the government has thrown the towel in on biophysical accounting and almost all the public figures have been released in dollars in various US Census reports (some in kilowatt hours of electricity). It is VERY difficult to get hard data on how much energy an oil company uses all-in. The 1997 and 2002 Census gave you a clue as to the energy it takes to refine oil. JD had a piece #49 on this topic a while back.  (I like to read his stuff because it polarizes my opinion on some things and modifies it on others)
Yes, I try to work on this subject too.

Why ?

Case 1 : EROEI of oil is around 20-30, and stays so (I doubt it). Then our problem will be to replace it with an equivalent or better energy source : coal, nuclear, solar or wind and to replace it in every sector of activity (ie switching to electricity for most energy consumer).

Case 2 : EROEI of oil is now 20 but decreases. Even with a flat extraction curve for the next 10 years as the Hubbert curve predicts, the decreasing EROEI will make less and less oil available for consumption (even if this would be only 1mbd/year) which will increase competition drastically.

So EROEI is an issue.

This is NOT aimed at you, peakguy, but your comment brought to mind something that bothers me: The way EROEI is often used too casually.

If I build a plant that's powered 100% by solar and wind, and it cooks tar sands into usable oil, or produces some other useful energy product via a completely different process, does it matter if the EROEI is lousy, or even if it's less than one?  The energy input is not constrained in the long run by the finite nature of fossil or nuclear fuels, so if it takes 100 BTU's to produce only 10 BTU's of an energy product that's in a form the market values much more than the electricity I consumed to produce it, it still makes economic sense.  (And since we're not up against a severe energy crunch yet, this is why batteries, which surely have a truly horrendous EROEI, sell in the bazillions.)

My point is that we have to look at ERO(non-renewable)EI to reach any meaningful conclusions.  In many cases this is what people are talking about, as in burning vast amounts of NG to cook the oil out of the tar sands, even if they're not  saying so explicitly.  They're clearly making the assumption that we'll only ever run that process via burning NG, and such assumptions ("we'll always perform task X via method Y") are where a lot of predictions go off the tracks.

great point lou. with the caveat that even solar and wind require periodic inputs of fossil fuels for repair/maintenance (factories to build rotors, fuel to transport the parts to where they are wanted, etc. -these % would have to be included in the life-cycle of your analysis. But you are basically saying there needs to be a recognition of energy quality in addition to the energy profit ratio...
The other thing is that mining processes can get more efficent.  Just because it is mined this way today does not mean that better and more efficient means cannot be developed in the future.  But that, of course, would require the students and faculty to  . . . oops! Sorry!
But, louGrinzo, there is always an energy cost to anything.  Solar panels and windmills don't build themselves.  Solar panels die in 10-20 years and have to be replaced, which means re-manufactured.  Windmills break down and need replacement parts.  And this all requires a fully-functioning industrial society to accomplish.  Which is exactly what we're in danger of losing.
Solar panels don't die in 10-20 years. For example, mine have a 25 year warranty, and I expect them to last well beyond that. My understanding is they can go 30 - 40 years.
We have some here (on the installation I work at) that have been working since the late 1970's, and still are.
Absolutely right analysis on a societal basis, Lou. And yet, if Suncor has locally available gas in its own reserves to burn, in-situ, in order to melt the bitumen enough to get it onto trucks -- Suncor's tar sands might well generate net accounting profit for Suncor -- and net additions to supply available to consumers -- even if  EROEI were less than one. (Which most people think, is not the case here.)
Nice point, but if you'd have an energy source with an EROEI with 0,1 and have the energy to produce it (for large scale consumption) than your primary source would be the most valued. I mean solar energy if it could be implemented at such a large scale would overtake a large number of applications, even the car industry. But the problem today is to find the right technology to do so.
Well, I know the subject is tar sands. but isn't it always really just energy?  People here know full well that the real question is- where do you get the best result for the effort.  Seems obvious to me (always a dangerous remark!)  that solar is the answer.  There is PLENTY of it, we already know several fairly good ways  to get it to energy we can use, and as with everything in the  engineering world, if I can do it you can do it better.

So the tar sands have x years worth of energy, plus all that we are gonna get from  that nice global warming they  will produce, while the  deserts of NAmerica have y billion years of nicely contained fusion energy that could do the opposite re CO2.  Storage? Think of zinc and carbon, not just hydrogen (with a nod to Engineer-Poet at Ergosphere)

Besides, who wants to dig frozen mucky sand in Canada if they can bask in the SW sunshine?

Although, if you're talking about this w.r.t. transportation, then solar has 2 technological problems: we neither have a nation-sized fleet of solar cars/trucks/trains, etc, nor is there a scaled-up collection and delivery system of solar energy for transportation. Whereas with the tar sands, one end product is just regular old gasoline, so you only have to work on the technology on the oil side.
So do we just ignore global warming?  We have to think of the WHOLE thing, all things included, that means. You give me a lot of pure available energy (solar electricity), and a lot of smart chem. engrs with their passions in the right place, and I think we can come up with something like water plus CO2 plus electricity gives stuff you can drive a car with.  Not been done?  Not here right now?  Neither is Global Catastrophe  here right now.  Will be if we don't do something new.

Meanwhile, I look out my window and see a mile long train of coal going down the throat of a monster stinker of a power plant  grinding out juice to run teenagers hair blowers.  THAT'S here right now, are we happy?

Question is, where do we put our marbles.  We have to look over the whole playing field, not just a little bit of  it.

Hey, I wasn't saying that I thought it was a good idea to focus on the tar sands instead of solar. I was just saying that some people (=corporations who aren't as concerned with global warming as you are) might not agree with you that you get the best result for your effort with solar.

I don't think that many people on TOD are very happy about full-out development of the tar sands, for lots of reasons.

You're all missing my main point:  Even at best, we'll only be getting 3 million barrels a day from tar sands in ten years.  That's probably optimistic.  But in ten years, to account for growth, the world will need an additional 20 million barrels a day of production.  Where is that additional 18 million barrels a day going to come from??  Not tar sands, obviously.  So, in the big picture, tar sands border on irrelevance.  Regardless of the EROEI!
Sorry, Yankee, I know you were thinking right, and you were polite enough to not have said it would take a zillion bucks worth of solar gadgets to make up the fuel for our cars and stuff, no matter how smart we were with the chemistry.

On my long boring car trip today I thought up the way to do it.  Put all the money that now goes into soft drinks into solar, and in an eyeblink we get lots fewer too fat people, lots less diabetes and rotten teeth, and lots more solar derived fuel, however they figure the best way to get it.

Then all we have to do is put back the nice light rail that used to go from my little hamlet to the great metropolis, and  I will be able to quit risking everybody else's life by driving, sit back and read my laptop like god intended me to do.

As for growth,  no way  we gonna be able to do it.  Shrink is the word! Shrink back to the days I remember when the population of US was 140E6 skinny hard working farm folks.

Ah, nostalgia. Some of us know what must be done but most won't listen.

"Back when there were about half as many humans, before Intel made the first integrated chip (1974), when mainframe computers about as powerful as modern wristwatches... [eight years later]... the american people turned their back on truth, embraced illusion, and postponed the (then small) sacrifice. Thus was humanity and this planet betrayed."

Shrink we will, by hook or by crook :-((

Regarding the example in your post immediately above, I'm afraid I would have to disagree and say that the EROEI DOES matter even if you are using a purely renewable such as wind or solar to convert tar sands into usable liquid fuel.

My reason? All forms of renewable energy have a certain energy input associated with their manufacture, installation, and maintenance.  While much of these energy inputs are one-time initial inputs, they can be annualized over the anticipated service life of the operation. currently, the energy inputs for renewable energy systems are in the form of fossil fuel.  Now, if you use renewables to product liquid fuel from tar sands but have a very low overall EROEI, then there could be some point at which the fossil fuel energy inputs to the renewable part of the system itself begins to exceed the liquid fuel energy output of the tar sand production. When that happens, the whole renewable + tar sand production operation, taken as a whole, will result in LESS fossil fuel being available than if the operation had never been built in the first place.

To my mind, this brings up an interesting related point.  And that is: is the EROEI for renewables such as solar, wind, and wave power, sufficiently high such that enough of their energy output can be diverted to the manufacture, installation, and maintenance of succeeding generations of additional solar, wind, and wave power systems? Or to put it another way: can renewable systems be self-replicating with positive growth if they had to rely solely on their own energy output?  While I suspect the answer is YES, what I haven't a clue about is how big of a YES that is.

A final observation. It seems to me that we are going through a tremendously strenous effort to produce liquid fuels, mostly for vehicular transportation. We need to take a closer look at the validity of the underlying assumptions regarding this whole costly and inefficient chain going from low-grade fossil fuels (e.g., tars sands, coal, oil shale) to high-grade fossil fuels (gasoline) to be burned in an internal combustion engine to move a rolling vehicle. I'm not smart enough to know what the answer is, but I get the impression that we are increasingly just spinning our wheels.

Just to avoid confusion, my above post was in reply to LouGrinzo's post re EROEI as related to tar sands and renewables.  It appears that a couple of other posts came in between by the time I got to writing mine.
Lou, Joule, I completely agree that the real issue when you start looking at EROEI is the liquid fuel value versus other forms of energy. It's not just BTUs in the short term, but in the long term it probably should be IMHO.

I think transportation (of all types) powered by electric or hydrogen generated from alternative sources should be our long term focus. Liquid fuels will always have a portability advantage, but eventually I think it will be easier to just put up more wind and solar than burn corn or oil sands. There will be a balance that will take time as people start to re-evaluate all their $$$ assumptions on cost of production.

Great thread guys.

I have stated previously on TOD that until the loop gets closed on some renewable liquid fuels you can't really calculate EROEI.  As Joule states above if you have enough positive EROEI from renewables to liberate tar sands why not just use the energy direct?  

The answer, as everyone focused in on, is because we need liquid transportation fuel.  Well, what is the true EROEI on biodiesel, ethanol, methane, etc., made from all sources, in the abscence  of oil or NG?  I know we need fertilizer, liquid fuel, electricity, and equipment just to make the feed stocks.  But Monsanto, ADM and Cargill are working hard to make all the components from renewables.  Sometime in the future someone is going to use biodiesel/ethanol energy to make some enriched organic fertilizer to make the next crop and start a closed loop cycle.  

Clearly it will be the same or higher cost as petroleum at the start but what happens after multiple cycles?  Does the cost (and EROEI) stay the same, go up or go down?  I can't answer that and I don't think it can be calculated now.  The point is, this type of liquid fuel might have a very positive EROEI but still be of limited quantity.  In my opinion people too often interchange energy efficiency (EROEI) with generating abundant energy.  They are not the same thing.  

I've seen two rough calculations on of the direct EROEI of  oil sands operations (i.e. the energy directly invested by a company to produce a unit of output energy). pup55 did one by back calculating from balance sheets, and antimatter did another with a different method (which I don't recall now). Both came back with an output:input figure of about 7:1. Try searching if you're interested. (For comparison, the direct EROEI ratio for the U.S. gas&oil industry was 22:1 in 1997. That figure is calculated from Census statistics in the blog entry referenced by thelastsasquatch.)
The discussion of CO2 emissions was understated. Canada will have a difficult (impossible) time meeting Kyoto or other greenhouse gas limits with a ramping-up oil sands production system. Also, there are battles underway over the appropriateness of the nearby river valley as a corridor for running new natural gas lines to the production facilities.
Sigh...the media seems to always plays to extremes, confusing the audience with abstract statements and having very little about actual facts.

The average viewer at home is left wondering:
How much oil are we talking about in the grand scheme? Exactly how will this be helping us in 100 years? Does this mean SUVs are ok? Really no more $1.50 gas? can't we just pressure OPEC? Isn't Global Warming happening anyway? What's the difference if we do a little more emissions?

It's all he said/she said anyway...pass the cheetos.

My understanding is that it takes the energy equivalent of at least one barrel of oil to get three barrels of oil from tar sands.  If you look at the Canadian oil industry as a whole--conventional and non-conventional--the oil industry has to add three BOPD of oil from tar sands to get one BOPD of net energy equivalent oil.  This is net after the energy input and after the ongoing depletion from conventional sources.

However, year over year, total oil production in Canada is basically flat--increasing oil production from tar sands is just going to offset the declines from conventional production.   On a net energy basis, Canada is actually going backwards year over year.

Also, they are talking about three mbpd from tar sands in 10 years.  If the world peaked in 2005, we should probably expect to see about a 4% annual decline rate.   At least initially, we will probably be losing about three mbpd crude + condensate per year.  

I had the chance to talk to Boone Pickens at the Simmons/Kunstler event in Dallas.  Boone thinks that we are definitely at the 50% mark worldwide.  

Then why do you think he didn't say more on 60 minutes -- or did they edit out his remarks?
i've also noticed that Boone Pickens doesn't seem to worry about peak oil, like the rest of us. yeah, yeah, i know, he freakin loaded, out the wazoo. he acknowledges that oil is a finite substance, and that oil will get more expensive as time goes on.
but, he doesn't seem to have an apocolyptic vision or worry regarding peak oil.
Cos he's f*cking old and thinks he'll die before it's a real prob and is probably OK with it killing him since he's gotta go soon enough anyway. Besides, it would prejudice his laid back image, haha ;)
Because he is part of the massive extraction/exploitation heritage. Read back on his "royal trust" days in the early 1980's. Consumption or waste weren't the issues, "maximizing shareholder value" was his stchick. He paid for full pages in the WSJ (frequently) to sell takeover schemes. He was never a production guy. He was a balance sheet pirate.    

Now he's an elder statesman...


We all find ways to generate the chemicals that met with evolutionary success given the environment we are born into and the skills we have. Some are very good at making money.  Money, in our current culture, is the best measure of relative fitness (except maybe high political office) Its acquisition creates alot of dopamine. If one makes 1 billion dollars, one gets very happy. If one loses 1 hundred million, one wants to get that feeling back when one made the billion. With even more fervor.When one gets to 2 billion and there are only 3 people ahead of you, that competition streak really comes out.

Billionaires keep at it for the brain chemicals, long afer theyve made more than they or their families could spend in 3 lifetimes. We all compete in various ways like this. T Boone is just doing what makes him feel good. If he went out and drove a bicycle and grew sweet potatoes he might be good at it but he would seek some stimulation and proof that hes smarter and richer than most pretty quick.

This mechanism is at the core of the demand side of peak oil. Dopamine activation, unlike opiates, is not satisfied or quenched. Having more doesnt stop the desire for dopamine. Which is why one of the ultimate solutions for peak oil is to find ways for us to get our relative fitness dopamine sustainably...A long shot but possible. (there are of course other brain chemicals involved, but that is the big one in todays society)

As a nicotine addict, one month succumbed after more than a year of abstinence, I am in no position to argue with that, lol. But if they are as sick (in addiction sense) as me then I suggest all their money is removed, it is for their own good.

But there is more truth than that in your comments tls. Need is not the main driver, you are right. Perhaps we are mostly like caged animals, seeking whatever irrational outlets we can. Perhaps that blinkers us, too.

Canada is also running low on conventional natural gas, and is looking at building a pipeline north to the MacKenie gas fields. Without this, they could be in trouble for heating, elec gen, etc in just a few years. However, a link about 1-2 years ago on the Amer Gas Assn site (no longer available) pointed to a report that indicated that if the oil sand development progressed the way they planned, the entire MacKenzie production would be needed just to produce the "oil." This was the subject of some concern, as one might expect.
Link to CBS 60 minutes' Oil Sand Story:

You can watch it there also

OK. I'm a dope. Didn't see that you had the link at the very top. Never mind.
Perhaps a higher quality recording (whole episode) ....
60 Minutes made refining the oil out of the "oil sands" sound easy:

The oil sands look like a very rich, pliable kind of topsoil. Why doesn't oil come out when squeezed?

"Well, because it's not warm enough. If you add this to hot water you'll start the separation process and you'll see the oil come to the top of the water and you'll see sand drop to the bottom," George says.

Contrast with Bubba's description:

In addition, tar sands require a lot of other energy resources to extract and upgrade them. Natural gas has been the fuel of choice for most of these energy needs as well as to use in hydrogenating the bitumen in the upgrading process. The forecasted need for natural gas collides head on with a forecast of limited future supply for this vital resource. There may be a way around this conundrum, but right now it is considered an impediment to future growth of tar sands development.

60 Minutes interviewed someone that said that refined tar sands crude is preferred by customers to other crude oil.

Asked if the processed oil is as good as that pumped in Saudi Arabia, Mather says, "Absolutely as good as. In fact, it even trades as a, at a premium because it's high quality crude oil."

Bubba feels differently:

To turn this bitumen into usable energy and transportation fuel it has to be heavily refined and upgraded, but that is doable. However, as you might imagine, this bitumen is not a very valued product by most oil refiners. Consequently, it sells at a heavy discount ($20/bbl ?) to light, sweet crude.

They also claimed that the amount of oil is 2 Tb which is in fact the OOIP whereas the URR is around 311 Gb but I guess it's a detail too complicated for the average viewer.
You have an apples/oranges problem here.  The ultimate refined product from the sands IS a premium one that sells for more than WTI.   The bitumin from which they start the refining process is what Bubba is talking about selling at a far lower price.  Duh.  

To me, the new news in the 60 Minutes piece is the discussion of potential recoverable oil at lower levels being some 8 times the 775 bb normally claimed.

Nobody think the oil sands is the answer to PO.  However, it is shaping up to be, as Boone implied, the most incredible natural resource find in history.   It is far more significant to investors than it is to global energy issues.

550,000 BOPD BY 2012

the choices being made now...using lots of NG to produce oil from tar sands are the choices of a fossil fuel rich world. these mechanations may not stand up to the bleaker situations past peak...given the choice of a trip to the mall or being warm, i think most would say,"screw the tar sands, give me the natural gas."
If you can invest 1 btu of natural gas to get 2-7 btus of oil from the tar sands, then what would you do?
depends if my house was heated with natural gas, and if I was short on fertilizer for my fields. If the answer to those 2 questions was yes, then Id see if an intermediary could trade the oil for gas for my needs. If the answer was no, then Id take the gas and screw the oil. Otherwise, I see your point and would take the larger BTUs.
Just so.  Let's not forget that we were awash in natural gas when oil sands production was getting underway in the 1970s. Using NG to create steam was more productive than just flaring it off.  Drilling for oil and finding natural gas in northern Canada at that time and into the 1980s was about as useful as finding nothing at all.

We've inherited a steam production model whose best-by date looks to be pretty near.  

Energy input for Syncrude:

.75MCF of gas = 1/8th boe


1/15 bbl diesel for transport

is that direct? or all inclusive?
So, the tar sands are just a GTL ploy?
In Q3

Realized selling price = $78.06cdn/bbl
Purchased energy input = $5.80cdn/bbl

1 bbl of production consumes 1/13th boe

Moreover, advanced refining processes, as will soon be used by OPTI, use only a very small fraction of the NG currently being used by others.   There will be a migration toward the OPTI concept once NG prices begin to rise relative to oil.
These oil sands are ridiculously overhyped. I mean, with the potential to produce only 3 million barrels/day in a couple decades, that's really miniscule in today's global market and even more so then. I doubt that would even compensate for declining production in conventional oil in the rest of N. America and probably even offshore. As a side note on offshore, I think that massive hurricane activity in the next decade or so will make GOM prospects iffy at best. Anyways, the vast amount of energy needed to ramp up production at the oil sands probably means that soon the EROEI will approach 1 and it will become unfeasible to continue (much like ethanol is today). The oil sands mostly just benefits the Canadians because they have a secure energy source and have more leverage over U.S. hegemonic economic policies.
My post is all over the place and I apologize, but I felt a need to correct some of the misinformation and put in my own two cents.  The oil sands will produce much more than 3 mbd, once all currently announced projects come on line it will be double that, and there are sure to be new projects being continually announced.  There are also breakthroughs being made in the efficiency of SAGD plants.  Opti's orcrude and gasification on Long Lake have eliminated the need for NG, instead using the very low grade bitumen and coking extracts as fuel for the steam, but this also results in much higher amounts of pollution, a double edged sword since Canada has ratified Kyoto.  And the Athabasca oil sands ARE the greatest energy source known to man (along with the Venezuelan Oil sands), together have way more oil than the entire world has ever had.  There are certainly problems with the oil sands, mainly pollution and EROEI, but as long as oil stays above 30$ a barrel (which I'm sure it will) it will be profitable and therefore exploited.  The world desperately needs oil, and even if consumption magically decreases production will be doing the same.  The oil sands are very signifigant to the States, especially if it's coming from someone so closely politically aligned and geographically close as Canada.  The world is currently built on oil, and the inevitable change into alternative sources will only be made easier the less dramatic the decline in oil is.  As far as oil reserves go, the oil sands are as big as it gets folks.
Newly elected Prime Minister has mentioned dropping out of Kyoto so that aspect may not be a problem.