So long, tar sands

Tar sands – also called oil sands by their hopeful enthusiasts – are thick, gooey sandstones saturated with heavy oil, and Canada has the world’s largest deposits. Alberta tar sands have been the best hope for Canada’s fossil fuel future since the desperate days of the 1970s “energy crisis” when light sweet crude prices spiked and tar sands became suddenly a profitable commodity. After the 1970s energy crunch oil prices dropped, and tar sands fell from favor. Still, Canada (especially Alberta) has always hoped to cash in on its massive bitumen-sand deposits, and has maintained an expensive cluster of mines to tap this marginal fossil-carbon resource. For the most part Alberta’s tar sand mining has gone after the lowest-hanging fruit… lighter, less viscous oil found in a small fraction of high-grade deposits there. When oil prices spiked again last year, the future began to look very bright for large-scale strip mining of tar sands in Alberta. Then the recession happened.

There is a catch-22 that tends to prevent marginal fossil carbon sources from entering the mainstream market. Low grade fuel deposits such as tar sands, heavy oils and oil shales cost so much to mine, or possess such low concentrations of usable commodities, that their profit margin is slim even under favorable economic conditions. Oil from tar sands is some of the most expensive oil produced on Earth, because the sands must be mined and extensively processed to extract usable oil. New techniques for extracting tar-sand oil in situ from wells, by injecting hot gas or solvents into the deep native rock to loosen and liquefy sluggish oil, have met with mixed success and are even more expensive to carry out. The upshot is that tar sands are only valuable when the price of normal crude is sky-high… perfect setup conditions for an economic recession that lowers the boom on overall demand for crude. Tar sands follow a cyclic, vertiginous path of boom and bust, with full-scale production always just out of reach.

Not only is tar sand a particularly expensive source for oil, it’s also one of the most wasteful in terms of CO2. Massive amounts of effort and energy must be expended to produce useable oil products from tar sands, so not only does the product itself generate CO2, a long chain of energy-intensive steps in the production process also coughs out a prodigious amount of waste CO2. In a world on the brink of reigning in carbon emissions, that’s not good news for tar sand enthusiasts.

An article in The Globe and Mail makes this point in clear terms. Long hobbled by the astronomical prices of tar sand oil, the hopeful Alberta bitumen-mining industry is now about to shuffle off the stage for the last time. With the election of Barack Obama in the US, and the onset of a US national cap/trade system for carbon all but certain in one form or another, Canada’s Parliament has moved ahead with plans for its own system of carbon caps. The problem for Alberta is that under no conceivable system of carbon capping and trading does tar sand extraction come out looking good. As a result, Alberta’s long propped-up dreams of tar sand riches are now, decisively, finally, over.

And it’s about time. Sub-economic fossil fuel sources like tar sands and oil shales have always been an annoying false hope. Annoying because of the tiresome rhetoric of proponents, who use every momentary rise in oil prices as an excuse to pitch their vision of strip mines enriching Canada and offering limitless gasoline to a grateful world. What the proponents always fail to recognize is that ridiculously expensive oil – the only condition that would convince people to start using such a low-grade oil source as Alberta’s tar sands – leads to ridiculously expensive everything, which leads to economic deceleration.

Tar sand oil would never be cheap unless it were heavily subsidized, and Canada doesn’t have near that many gullible citizens to support such a never-ending bailout. That is why oil shales and tar sands are also a false hope. Having their proponents always around to remind us that no matter how dry of oil the Middle East becomes, their gleaming northern oil is always there, always ready to harvest when times get tough, distracts us from reality. Cheap Alberta tar-oil is impossible, so the only condition where production would go into full swing would be the same condition that forces the world to throttle back on oil use… and look to other sources for transportation fuel, such as ethanol, natural gas or fuel cell technology using electrolytic hydrogen. All of those are – or are well on their way to becoming – cheaper than Alberta tar-oil.

So long, tar sands. You will not be missed.

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~ by Planetologist on January 4, 2009.

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