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June 10, 2006

Oil Sands To The Rescue — Not Peak Oil

Peak Oil optimists often point to Canadian oil sands as the deus ex machina that will save us. A new academic study from Uppsala University, Sweden, however, concludes that even a crash program to develop Canadian oil sands will cover only a few percent of the world's oil needs. Here's the abstract from the full paper:

The report Peaking of World Oil Production: Impacts, Mitigation and Risk Management, by Robert L. Hirsch et al., concludes that Peak Oil is going to happen and that worldwide large-scale mitigation efforts are necessary to avoid its possible devastating effects for the world economy. These efforts include accelerated production, referred to as crash program production, from Canada's oil sands. The objective of this article is to investigate and analyse what production levels that might be reasonable to expect from a crash program for the Canadian oil sands industry, within the time frame 2006-2018 and 2006-2050. The implementation of a crash program for the Canadian oil sands industry is associated with serious difficulties. There is not a large enough supply of natural gas to support a future Canadian oil sands industry with today's dependence on natural gas. It is possible to use bitumen as fuel and for upgrading, although it seems to be incompatible with Canada's obligations under the Kyoto treaty. For practical long-term high production, Canada must construct nuclear facilities to generate energy for the in situ projects. Even in a very optimistic scenario Canada's oil sands will not prevent Peak Oil. A short-term crash program from the Canadian oil sands industry achieves about 3.6 mb/d by 2018. A long-term Crash program results in a production of approximately 5 mb/d by 2030. [Emphasis added]

People read estimates of the total amount of oil contained in Canadian oil sands and say, wow, it's another Saudi Arabia. The important question, though, is not how much total oil the oil sands contain, but how quickly it can be turned into usable oil. Answer: nowhere near quickly enough to offset declines in conventional production elsewhere or the rapid growth in worldwide demand. The fundamental problem is the colossal scale of the world's appetite for oil. Next to that, non-conventional oil is a drop in the bucket. Instead of hoping for new sources of supply, we need to concentrate on reducing demand. We have to learn to use less oil — much less.

Posted by Jonathan at June 10, 2006 08:38 PM  del.icio.us digg NewsVine Reddit YahooMyWeb