FUTURE OIL SHORTAGE CERTAIN?
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
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
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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