Replies to post #6462 on Apex Resources Inc (SLMLF)

[fishin100]

'trawets' I have no advice to give, we must all decide for ourselves. As for my personal view, I've always liked this stock. If the reserves finally get accessed the share price will jump big time and make the wait worth while. No access ... no money.
The risk is there, for sure. Information is the key, as is interpretation.
The way I see it, it's coming ... possible news next month (IMO).

[ebaykamel]

Don't feel bad about not getting those shares at a penny. It was only 90$ worth. The rest has been over 2 cents. Everyone is holding here hoping for the decision to build to go through. Then we will most likely be sold to a oil big boy. That's only if they decide to build the pipeline. The company has not sold shares for years. Good luck with acquiring shares and I hope you and the rest of us here make a very good profit on our investments.

[fishin100]

"digest all the information offered, and then analyze"

Tue Aug 23, 2011 at 01:06 PM PDT.

Updated: Alberta Tar Sands expose, how 7 pipelines and nuclear power fit into the overall strategy.

I question if the Keystone pipeline project is an absolute real long term goal by TransCanada,. Certainly, in the big picture, Keystone is only a single chapter in a much larger book. This dairy tries to tell the larger story from the perspective of the Alberta Tar Sands Partners and the scope of the the Tar Sands project itself, If you read this diary you will risk information overload, you will be offered numerous disparate data points that at first glance may seem unconnected. You will need to digest all the information offered, and then analyze.

What is bitumen?
Crude oil is is classified by the American Petroleum Institute (API) into light, medium, heavy and extra heavy crudes, by API gravity. If its API gravity is greater than 10, it is lighter and floats on water; if less than 10, it is heavier and sinks. The Albert Tar Sands contain crudes of API 10 or less that is called Extra heavy or Bitumen. Heavy oil is defined as having an API gravity below 22.3, Medium oil is defined as having an API gravity between 22.3 °API and 31.1 °API, Light crude oil is defined as having an API gravity higher than 31.1.

At a production rate of 3 million barells a day the tar sands can last for 170 years. This would also mean a hole in the ground visible from orbit.

The Keystone pipeline is only one of a couple of handfuls of pipeline proposals over the last decade in the Western US, Canada and Alaska. Alaskan nat gas is largely unexploited, and is used locally on the North Slope. Its estimated that there are 70 trillion cubic feet of nat gas reserves that can be found in Alaska, a lot of it in the North Slope area. There are at least 3 major proposals for nat gas pipelines from the North Slope area and the adjacent Mackenzie River Delta in Canada. 2 of these projects point right at Alberta.

TransCanada and Exxon Mobil are partnered in the Alaska gas pipeline proposal that will directly link nat gas production in the North Slope of ALaska thru Alberta to the US mid west. This project may be the same as the Denali proposal, and was reintroduced to the Senate in Feb, of 2011. There also at least 2 variations. Additionally there is the Dempster Lateral.

The Mackenzie Valley Pipeline has had many lives since first proposed in the 1970's and would move nat gas from offshore production in the Beaufort Sea to Alberta.

Alaskan Hiway route and the Mackenzie River route.
Third is a project that follows the TAP, Trans Alaskan Pipeline,putting a nat gas pipeline next to the Alaskan oil pipeline, from Prudhoe Bay to Valdez. This project would allow Alaskan nat gas to be moved to international markets, by-passing the Tar Sands project.

All of the above pipeline proposals are for nat gas, and indicate the importance of the untapped reserves known in Alaska and the Beaufort Sea area in general. If the Tar Sands project is going to rely on nat gas to operate, it will need large volumes of nat gas making these pipelines crucial. Now Lets take a look at the Keystone proposal:

The stated purpose of the Keystone pipeline is to move 900 million barrels a day of bitumen from Alberta to Texas, specifically Houston and Port Arthur. In order to move bitumen thru a pipeline it must be heated or diluted with light grad crudes.

Heavy crudes require processing before being run thru a refinery, the long chain hydrocarbon molecules of heavier crudes must be "cracked", broken down to shorter chains before processing in a refinery.

Most Texas refineries dont need catalytic crackers because Texas produces some of the best domestic oil and is of sufficient quality as to preclude the use of catalytic crackers. Most other refineries in the US have significant cracker capacity, and If memory serves me correct the Texas region (PADIII) has the lowest cracker capacity in the US. Texas itself has about 1,8mbd (million barrels a day) of cracker capacity.

So lets review, TransCanada wants to deliver 900mbd of bitumen to Texas, but Texas really can't handle bitumen, and its existing refineries are geared to handling the light crudes produced in the area. If Texas is to take on the 900mbd, its going to have to examine building 900mbd of cracker and refinery capacity. Or... what if the Tar Sands Partners simply builds the crackers and processing capacity on site in the Tar Sands area, so they can ship out a light grade syncrude?

If the Tar Sands Partners wished to market their oil internationally, cracking it, processing it into a light synthetic crude product would offer customers a very desirable product. And would it be more expensive operate a Keystone bitumen pipeline for ... oh... 50 to 100 years, than operating a regular oil pipeline?

It may be that marketing the Tar Sands oil internationally is of more value then only selling the oil to oil companies in Texas via the Keystone. What if TransCanada built a pipeline due west thru British Columbia to the Pacific Ocean? This would provide a direct route for the Tar Sands partners to sell either bitumen or syncrude on the international market. And if the Keystone pipeline didn't get built for some reason, this western route would make a great plan B. (I had this speculative thought as I was writing this article, afterall, If I'm TransCanada, I don't put all of my eggs in one basket-Keystone, so I googled for the predicted western route- and sure enough.....)

Well its not a what if, its called the Enbridge Northern Gateway Pipeline Proposal, and it is 2 pipelines, one moves nat gas to Alberta, and the other moves crude to the proposed terminal at Kitimat, British Columbia, on the Pacific coast.

TransCanada wants to move bitumen to Texas, and to British Columbia, and frankly when you have the largest oil deposit, even larger than the 100+ mile long Gahwar oil field in Saudi Arabia, in the world, its in your interest to explore the possibilities in an effort to get your product to market. And the upgrading of the bitumen into synthetic crude, or syncrude is also becoming a popular option. Syncrude Canada is the largest producer in the Alberta tar sands. My premise that processing the bitumen into syncrude at an ALberta location bears out, Syncrude Canada must see the advantages of the insitu processing.

Its a lovely picture, pipelines all over Western Canada and Alaska, to Chicago, Houston and Port Arthur in Texas. Natural gas going in, and bitumen and syn crude coming out. From an environmental standpoint the syncrude is far less caustic than bitumen if spilled into the environment. And for every pipeline that gets stopped, another will pop up to replace it.

How to power it all?
But heres one of the key issue for the tar sands project. It requires something on the order of 10,000 Mw of electricity to power this huge project. Wether its nat gas or steam from nuclear power plants, the tar sands is going to require huge amounts of power. Its very likely that Canada will limit or stop nat gas exports to the US as the project ramps up, and its possible that the Tar Sands project will use all of the remaining nat gas in Alaska and Western Canada. Though it is true that syncrude could be used to power the project as nat gas supplies reach peak production. Proposals to build Pebble Bed Nuclear power plants (PBNR), 18 of them at 500Mw each, to power the tar sands project. Advocates of PBNR cite the needed steam for bitumen extraction, and the electrical generation is just a bonus. An alternative to the Pebble Bed reactors would be conventional Pressurized Water reactors, 9 of them at 1000Mw each.

So there have it, at a minimum, 7 pipelines we know of, up to 18 Pebble Bed Reactors, or 9 PW Reactors or some combination of nuclear reactors and nat gas or just all nat gas is needed to power up the desire for gasoline.

The emission of greenhouse gases will be huge, bitumen has more nasty impurities that need to be removed than regular oil, and of course the potential use of 140tcf of nat gas will add to the Global warming impact. This cannot be stressed enoungh.

Our existing oil, coal and nat gas needs to be used to build the next generation of energy infrastructre, wind, solar, renewables, renewable energy storage,and the High Voltage DC systems to move power on a continental scale to where its needed. Using 3 gallons of gas to make 4 or 5 gallons of gas is just silly, and will leave Canada with a hole in the ground that can be seen from orbit.

EROEI or energy returned on energy invested
The EROEI for the Tar Sands project will probably not be as bad as corn based ethanol, which has a 1.3-1 EROEI, but will not be very good. Back in the day oil had an EROEI of 100-1, Robert Rapier of the oildrum estimates the current EROEI of oil is 10-1, and that the EROEI for tar sands will probably at best be 4 or 5-1, with a worst case scenario of 1.5-1.

This project requires a presidential permit to start building -- and it is President Obama's decision alone to grant or deny that permit. He will make the decision as soon as September.

http://www.dailykos.com/story/2011/08/23/1009810/-TransCanada-Tar-Sands-expose,-how-7-pipelines-and-nuclear-power-fit-into-the-overall-strategy-