Quote:
Originally Posted by ericfromcowtown  Quote:
Originally Posted by staythecourse
That's news to me. Why aren't the wells a-pumpin'? I would think that (as happens in the Mid West when poor wells are started back up when oil prices go up) that wells would be built and started up.
| The vast majority of Alberta's oil reserves are in the form of bitumen. Think hard molases that won't flow unless the viscosity is lowered. You either have to mine it, if it's close enough to the surface, or lower its viscosity insitu usually through the introduction of steam, if it isn't. In either case, it's much more expensive to produce and refine per barrell than the sweet crude flowing out of Ghawar in Saudi Arabia. At $20 or $40 oil much of the reserves were uneconomic or only marginally economic. At $135 oil, a lot of it is suddenly economic to produce and there is a boom here in Alberta of lands being leased and projects being anounced. You need a lot more lead time to develop these projects, so even though hundreds of millions of dollars have been invested in some of these projects many are still years away from producing.
V.P. Cheney was up here a few months ago to tour some of the projects, so evidently Washington also recognizes the oil sands as strategic resource for the future. |
Then you gotta think that as long as gas prices stay outrageously high in
comparison to all other things these wells still make sense to get going. I mean if the return on investments with bitumen makes sense over all other typer of investments you'll see people waste the effort and money for a potential return.