Thursday, August 10, 2006

Peak Oil = Alberta Water Shortage

While King Ralph bitch slaps the Pembina Institute for daring to point out that the Tar Sands may lead to a water shortage in Alberta, which is already facing drought conditions, claiming they should keep their noses out of the business of business, well a business blog says their concerns are justified.

The Oil Horror Picture Show (By Sean Brodrick)
Money and Markets, FL - 9 Aug 2006

Canada's total crude oil production has been dropping since 2004, and is down 11% since December, according to the Energy Information Administration (EIA).

"But don't worry," says the Canadian Association of Petroleum Producers. That product, they claim, should get back up to the 2004 level starting in 2010, thanks to oil sands.

Trouble is, they want you to ignore the fact that every cubic meter of oil produced requires two to five times as much water. In other words, a million barrels a day of oil production translates into roughly 2 to 4.5 million barrels of water used in that same day.

Just among the oil sands projects now planned, the water use will increase to 529 million cubic meters, according to the Pembina Institute's report, "Down to the Last Drop."

Considering that the drought in North America is worsening, there may be better uses for Canadian water. Water or oil … that's a tough choice, isn't it?

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In fact despite all the ramping up of oil production in Fort McMurray we still face Peak Oil conditions.

"Once peak oil occurs, then the historic patterns of world oil demand and price cycles will cease. In recent years, the realization of price stability has depended on the effectiveness of nations belonging to the Organization of the Petroleum Exporting Countries (OPEC) to adjust for the production increases and lags of the non-OPEC nations. "We have now entered a period where production is lagging behind demand. A Thousand Barrels a Second

Nuclear powered steam injection, melted Glaciers, all the wild and crazy ideas of the seventies are being revived in Alberta in order to extract the expensive oil from the Tar Sands.

A step back in time and a blast from the past. Historian Michael Payne looks back at efforts to set off an atomic bomb at Cheechum Crossing. All in the name of getting oil out of the Athabasca Tar Sands.

Oh yes and don't forget it also takes natural gas to power the current extraction process.

Tar sands take 1,000 cubic feet of natural gas and a lot of water to produce a barrel of what equates to sour crude. Sour or heavy crude is difficult to process and can only be handled by a limited number of refiners

The Tar Sands oil production is an expensive process. In other words along with the social and infrastructure costs which are not being met, the real cost for a barrel of oil from the tar sands fails to take into account real cost inputs.

While Klein likes to say leave it up to business, the real costs are borne not by business but by all Canadians who have subsidized big oil since the begining of the Tar Sands.

Canadian tax law invented income trusts (ITs) initially to enable oil and gas companies to pay dividends from cash flow before taxes. That means they could securitize future revenue streams and offer tax advantages. Normal stocks pay dividends from after-tax earnings. These entities are much more common in Canada than in the U.S., although some others are said to be coming here. The recipient of the IT dividends is responsible for paying taxes on what he has received. That makes this vehicle similar to real-estate investment trusts in the U.S. and other countries. Looking to Canada for investment innovation

Mackenzie Gas, Athabasca Tar: Industrializing Canada’s Northwest ...

Also See:

Peak Oil

Tar Sands

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Odiyya said...

great post. i wrote on the same issue yesterday as well. We can only hope that people start waking up from this drug like haze brought on by an overdose of oil.

Luluigia said...

Well, I guess we had better learn to walk, bike or use a kayak. Alberta is no doubt on a roll that can only finally come to a crashing halt by its own weight like the snowball rolling down the hill. Somehow the forest is always obscured by the trees. However, I did hear a program on CBC radio 1 on alternative energy and people living off the grid. Seems that while it is hard work and takes lots of attention, many are managing and many more will have to in the future.