Coal

[Spellbound]

Byron King: The Canadian Tar Sands; Ref - http://www.lifeaftertheoilcrash.net/Archives2006/KingTarSands.html

Here are some excerpts describing some of the difficulties facing the fledgling Tar Sands projects. Note particularly the NG input necessary. West Hawks NG investment might just prove to be a real bonanza.

Energy Input

Production of "oil" from the tar sands is a very energy-intensive process. Production estimates for 2025 are that the energy input will require between 1.6-2.3 billion cubic feet (bcf) of natural gas per day, approximately equal to the planned maximum capacity of the proposed Mackenzie Valley gas pipeline (1.9 bcf/d) out of northern Canada, or about one-fifth of anticipated daily Canadian gas production. Pipelines or no, the energy requirements of the projects planned for tar sands development already exceed the amount of available natural gas from the entire Mackenzie River project. Virtually all estimates for natural gas usage in tar sands operations by 2015, just 10 years hence, exceed the projections for available amounts of natural gas. Something has got to give.

In another respect, using natural gas for tar sands development creates a political issue for Canada due to its obligations under the North American Free Trade Agreement (NAFTA). The NAFTA issue arises because if Canada uses natural gas for tar sands development, that nation will have that much less gas available for export to the U.S. But also under the terms of NAFTA, Canada cannot reduce natural gas exports to the U.S. unless it also reduces natural gas consumption within Canada. And because sometimes it gets cold in Canada in the wintertime, there may be a domestic Canadian political issue wrapped up in all of this.

Thus the expansion of Canadian tar sands capacity is limited by natural gas supply, and indirectly by the price of natural gas, which will drive the economics of expansion and continued use of the sands resource. One possible exception to the natural gas limitation would be to develop nonthermal processing technology or to switch to alternate fuels for the tar sand process heat required. These types of alternate solutions are not even on the drawing boards, and hence are highly speculative.

If any alternatives to using natural gas are going to be adopted, these new energy sources will have to be fast-tracked to get them online in time for the tar sands projects to make use of them. Some examples of alternate energy sources are burning the bitumen that is extracted from the tar sands, or using coal bed methane. Each technique will require its own rather extensive industrial infrastructure. And each of these energy sources emits relatively higher levels of greenhouse gases that natural gas, so Canada will face international criticism, if not other sanctions, over higher CO2 emissions. (Darn, there's that "global warming" thing again.)

There are proposals to use nuclear plants in the Alberta area to provide process heat or other required energy input. But nuclear plants create issues of their own. These include the capital costs for the plants, the difficulty of constructing such facilities in the Alberta region, time-to-build issues, safety and nuclear waste issues, and the need to construct energy transmission facilities for electricity or steam. Plus, there are the same kind of "not in my backyard" (NIMBY) people in Alberta as there are in most other locales of North America. Do you want a nuclear plant near you? A lot of people do not.

Water Limitations

Another limitation on tar sands expansion is that processing capacity is limited by water supply. Much water is already being recycled using current technology, but current production techniques require 1-2 barrels of "makeup" water per barrel of product. It will be imperative to develop technology that uses less water or that recycles even more of the water being used. And doing this is not nearly as easy as you might think.

Surface water flows, principally from the Athabasca River, are simply inadequate to meet forecast needs. And deeper water, from underground aquifers, is saline and must be diluted with fresh water or otherwise desalinated. Whoops. This will require more of that energy input stuff.

Immense amounts of water are currently being discarded into settlement ponds, in which it may take 200 years for the smallest particles to settle down to the bottom. Meanwhile, the water is toxic, and mixed with exceedingly high levels of heavy metals and other exotic elements that you probably do not want to eat. Some of these impoundment ponds are many miles in area, and will pose an environmental problem or hazard for many centuries.