Home > Americas, Canada, Economics > Tar Sands: The Oil Junkie’s Last Fix

Tar Sands: The Oil Junkie’s Last Fix

Chris Nelder writes in The Oil Drum:

The tar sands of Alberta are shaping up to be the oil industry’s poster child of this phenomenon. With oil well over $60 today, the low-grade sludge called kerogen that we recover from tar sand–actually more like a putty, at room temperature, which is why I refuse to use the whitewashing term “oil sands–should be highly profitable.

But paradoxically, the impending decline of global crude oil production, which is now coming clearly into view, has led to a mad rush to produce the tar sands. And this, in turn, has led to skyrocketing costs…such that now, the real “profit” in producing the tar sands seems to be in government tax breaks, not in actual profit on the resource itself.

In fact, the Canadian tar sands operations are facing a whole host of challenges, beyond economic–so much so, that one wonders why we try to harvest them at all.

But trying we are: according to the respected energy analytics firm Wood Mackenzie (WoodMac), about $117 billion is going to be spent on the tar sands by 2015.

Let’s look at some of the challenges.

Read the complete text >>

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Categories: Americas, Canada, Economics
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