Minnesotans For Sustainability©
Sustainable Society: A society that balances the environment, other life forms, and human interactions over an indefinite time period.
What is Canadaís Situation?
Canada is a large country. Most of it is shield country, lacking oil potential at all, this emphasizes that oil is concentrated in a few places. As far as the geology of Canada is concerned, there may be three areas of interest. Thereís the old Alberta Province in the foothills of the Rocky Mountains which was started I think in 1947, if Iím not mistaken, with the LaDuke field was the first field there, in Alberta. Itís now an extremely mature conventional oil province, really approaching the end of its life with ever smaller fields of less and less activity. So the days of Albertan conventional oil are closing.
Then some 20 years or so ago there was an interest in the MacKenzie Delta in the north. Here you enter into the Arctic domain, which is not only operationally difficult, but the geology of most of the Arctic region is gas prone. The reason for this is that itís suffered from the weight of fluctuating ice caps in the geological past which depressed the rocks into the gas generating windrows. Furthermore, oil source rocks tend to be formed when itís in tropical regions because you need heat to create the algae but due to plate tectonic movements, some of these formerly low latitudes have moved into higher latitudes. But generally speaking, the Arctic gas provinces drilled a lot and explored quite a bit in the Arctic islands of Canada and found some gas finds, but not much oil. There are a couple of oil fields in the MacKenzie Delta, some offshore, that have a potential, but itís mainly gas.
Then the third place of interest is off the east coast of Newfoundland where a fairly small conventional Jurassic play has been found and thereís a couple with oil ĖHibernia is the main field there. Itís had problems too, because itís an iceberg belt. They have the problems of defending the platform against floating icebergs. And theyíve found another field there recently, too. This is a nice little province but itís small, moderate. Itís probably half the size of the North Sea or less. So itís no big thing.
Canada has really very limited future potential for conventional oil but has huge amounts of tar sands. The resource is huge. Thereís no shortage of the stuff itself. The problem is the extraction rate. Up to now the economic limit is 75 meters of overburden. You have to dig out 75 meters of rock to get to the deposits and the whole process of extracting this heavy oil is to centrifuge it and add caustic soda and hydrogen and fuel the plants. Itís an industrial process. Itís a mining/industrial process in effect.
And at the moment, itís been fueled largely by stranded gas, isolated gas fields up there, which are not connected to the main pipeline system that they can use. So theyíve been using the stranded gas which is now coming to an end too, so the fuel costs of the tar sand processing plants are going to rise. And also the whole process uses an enormous amount of water. Recently I read that the Albertan government has become concerned that just isnít enough water for all of this. They are increasing the charges for water and apart from the charge, there just isnít enough of the stuff there to expand the thing infinitely. Although it can be expanded further, although it could be quite profitable, you canít see an explosion of oil from these tar sands. It is important, by all means, to alleviate the subsequent decline, but very little impact on peak itself.
Thatís really Canadaís situation. Thereís a lot more gas up in Canada, of course, but itís far away, itís Arctic, itís expensive to produce, and give it a lease on life of a decade or so, but not too much. Canada, as a neighbor of the United States and under NAFTA itís part of this free trade organization and so itís effectively being drained by the United States of its gas, so far apparently with good will on everybodyís side.
But one would imagine freezing Canadian winter in due course might compel people up there to think that wouldnít it be better to heat ourselves rather than export our precious resources for somebody else?
This in turn
carries, of course, enormous political consequences in the relations between America
and Canada and then in the meantime, of course, the American oil and gas
companies have been buying up Canadian ones as fast as they know how, simply
because they have nothing much left at home. I think this is a looming kind of
political problem for Canada if it starts restricting supplies to the United
States ... In an extreme case, we need to get these Mountie fellows out again to
defend the frontier. Thatís overstating it, but anyway, some kind of tension
would likely arise.
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