Rigzone had an article this week regarding a suggestion in The Wall Street Journal that:
"The surging interest in Canadian oil sands is stark evidence that the world isn't about to run out of oil. Instead, it is running low on readily accessible light, sweet crude -- oil that flows like water, has few impurities and can be easily turned into gasoline. As the good stuff gets scarce, Big Oil is turning its attention and pouring money into extra-heavy crude, such as the giant deposits near Fort McMurray and another similar one in Venezuela."
For example, according to the Journal, if you include the tar sands and other low grade oil deposits:
"has vaulted Venezuela and Canada to first and third in global reserves rankings, although Venezuela's holdings in extra-heavy crude are a rough guess. Saudi Arabia is No. 2. Not including the oil sands, Canada would fall to No. 22."
In a separate article Rigzone points out some of the effects of oil sands development:
As Fort McMurray's population has increased to 61,000, from 33,000 in 1996, housing has become in such short supply that the average mobile home now sells for $277,000 and people are renting couches for $500 a month
The crowding and labor shortages pushed Canadian Natural Resources to build a jet runway long enough to accommodate Boeing 737s to allow workers to commute to their giant new Horizon project. Shell Canada has built a giant pipeline to transport diluted oil sand bitumen hundreds of miles south to a new upgrading plant outside Edmonton.
In Calgary, EnCana is about to build a corporate headquarters covering more than two blocks, the biggest real estate development project in Canada in two decades.
But the costs of developing these reserves has a dark side, according to the Journal:
"heavy oil has big economic and environmental drawbacks. It costs more to produce and takes more energy to turn into gasoline than traditional light oil. Recovering and processing Fort McMurray's heavy crude releases up to three times as much greenhouse gas as producing conventional crude. And upgrading it into refined products, such as gasoline or diesel, will require a gigantic investment to retool global refineries."
These effects are already visible:
"Canada, which exports more oil to the U.S. than any other country, already is having trouble meeting its pledge to cut CO2 emissions largely because of its mushrooming heavy-oil production. By 2015, Canada's Fort McMurray region, population 61,000, is expected to emit more greenhouse gases than Denmark, a country of 5.4 million people."
Rigzone points out that the battle lines have already been drawn:
Alberta's energy minister, Greg Melchin, says oil-sands development creates a minimal environmental disturbance that is outweighed by the opportunities and jobs created. "It's worth it. There is a cost to it, but the benefits are substantially greater," he said.
But the environmental groups have another view:
"The pace of development is outstripping our ability to manage the environmental issue," says Mr. Raynolds of the Pembina Institute. "Our unwritten energy policy is dig it up and sell it as fast as possible."
Sean Nixon, a Vancouver-based lawyer for the Sierra Legal Defence Fund, said The Supreme Court of Canada needs to put teeth into Canada's environmental assessment legislation. They need to interpret Canada's environmental assessment act that ensures there will be meaningful assessments of large projects."
This article reinforces my conclusion that we are not running out of oil, rather we are entering a period of ever increasing costs of oil, at a high environmental cost. Our desire, in the US, to depend on personal vehicles for transportation is so high that many will continue to use their cars, as they do now, despite increasing fuel costs. I don't think we will stop exploiting these reserves until either 1) the price of oil is so high that economic considerations cause us to implement, on a large scale, alternate means of fueling our vehicles, such as PHEVs and EVs (I assume this would happen before fuel cell vehicles are viable, before 2020, otherwise they would play an important role) and/or 2) we have such a large environmental disaster that legal measures are taken to reduce production from these sources of oil. I would hope that the oil companies would at least develop means to extract these oils using energy produced on site rather than importing energy, especially natural gas, to power their projects.
The Energy Blog: Peak Oil: A Shattered Myth?