FUTURE OIL SHORTAGE CERTAIN? 

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When one attempting to look into the future, it is the surprises that make life most interesting. For decades we have followed the ups and down's of oil. Gas lineups in the 1970s were followed by price reductions, price increases, and then reductions again. Yet the message from governments and environmentalists has been that we are going to run out of gas in another decade or two. Don't be too sure.

"Big oil" in the form of eight companies, including Chevron, Shell and Amoco are hot on the latest technology trail to tap obtain oil that was until now physically unobtainable, certainly at a market competitive price. The new process involves "horizontal wells" and a "steam-assist" to capture "gravity drainage" from bitumen, tar and heavy oil sands. The process is the outgrowth of work done by former Imperial Oil scientist Roger Butler, who now teaches petroleum engineering at the University of Alberta. Some believe the recovery program will increase world oil reserves by 50 percent -- Not exactly a 30-day supply.

How can this be? Most economists and many scientists base the majority of their decisions on the "known". No "surprise" factor is built into their calculations for new technologies that could, to stretch a point, take blood from a stone. Such a surprise is now being tested at Fort Murray by the Alberta Oil Sands Technology and Research Authority (Aostra).

If AOSTRA is successful, it means world oil reserves will jump by 500,000,000,000 barrels. Researchers are aiming for a proven production technique cost of a mere $7 a barrel. That includes a 10 percent return on capital investment.

How can this be accomplished? By drilling instead of strip-mining. By using steam injected into the heavy oil or bitumen instead of trying to pump or dig out the mixture of sand and oil still abundantly buried under the earth's crust.

If the oil companies reach the goals now believed obtainable not only Canada could benefit from this development, Venezuela would be another big winner. The net effect world-wide could be more stable oil prices as this new oil supply enters pipeline flow.

Aostra has now drilled three pairs of long horizontal wells. According to a report from Alan Bayless of The Financial Times of Canada, Project Manager J.C. O'Rourke, Project Manager says 100 pairs of longer horizontal wells could produce 50,000 barrels a day. The last look at the OSLO (another) oil-sands project was going to require $4.5 billion to produce 77,000 barrels daily of synthetic crude. It required a market price of $30 a barrel to succeed. If successful, the new technique would be competitive with today's benchmark price of US$19.15 a barrel for West Texas intermediate crude. The technique does not require some exotic, yet-to-bediscovered scientific fact. The concept is surprisingly simple. Either this or another method will be found to competitively recover petroleum from the tar sands of the world. Remember too, that we haven't reached down really, really deep (below 15,000 feet) into the earth's crust to recover yet unknown sources of oil. Oil is someday going to be too expensive to recover, but we haven't reached that period as yet.

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