It appears this question will be answered in the next few weeks, when final decisions will be made by oil companies from North America and Asia.
In a recent article 'Canada can give the world a fresh energy source', Author, Bernard Simon, explains that at stake is the opportunity for Canada to gain a long-term economic boost, for the US to bolster energy self-sufficiency, and for China and Japan to increase their access to crude supplies.
According to Simon, in October Calgary-based Enbridge, an operator of oil pipelines, commenced what is referred to as 'open season' for its proposed Gateway project, a 1,160km pipeline from the provincial capital Edmonton to Canada's Pacific coast. Furthermore, Terasen, a Vancouver-based pipeline operator that has just been acquired by Kinder Morgan of the US, plans a competing project, also across the Rocky Mountains.
"They are seeking commitments from refineries along the US west coast and across the Pacific to buy oil produced from Alberta's massive deposits of bitumen-like oilsands," states Simon.
"The refiners' decisions and the building of one or more westward pipelines could determine the success of as much as C$100bn (US$84bn, £48bn, €71bn) of oilsands projects already announced by producers in Alberta, though it is unlikely that all will come to fruition."
The oilsands, a source of crude for almost four decades, have evidently overtaken Alberta's conventional oil output in the past few years. However, with recent oil price hikes this development has come under the spotlight.
Fort McMurray, north of Edmonton, has become the commercial centre for the oilsands, its population doubling in 10 years to 61,000. Melissa Blake, mayor of the Wood-Buffalo regional municipality that includes Fort McMurray, is quoted as saying that the city is planning for a population of 100,000 by 2010.
Stephen Williams, who oversees oilsands operations at Calgary-based Suncor, backs her prediction and adds that the oilsands will have a big impact on Canada's GDP and balance of payments for the next 50 or 100 years.
"The oilsands are undoubtedly a vast resource," says Simon in 'Canada can give the world a fresh energy source'. "Located in three main deposits across an area the size of Florida, they are estimated by the US Department of Energy to contain 175bn barrels of oil. Those reserves are exceeded only by Saudi Arabia and, potentially, Venezuela."
Authorities on the matter have observed that while oil analysts can only speculate about the state of Saudi Arabian oil, Alberta's oilsands reserves can be easily evaluated by any individual or organization.
Four existing projects produce about 1m b/d of oil, and if the planned developments come to fruition, output from oilsands in the area will rise to about 3m b/d by 2015.
"This expansion would more than compensate for dwindling conventional oil production in other parts of western Canada, lifting total Canadian output from 2.5m b/d to 4m b/d over the next 10 years," contends Simon. "Canada already provides 10% of US oil needs. The oilsands could help the US lower its dependence on external supplies."
Simon continues that US companies have taken a growing interest in the oilsands, and ExxonMobil, Chevron and ConocoPhillips are just some of those with stakes in either existing or proposed projects.
He points out however that some potential problems and big questions hang over the future of the oilsands. These include:
In conclusion, Simon emphasizes that despite potential problems and much debate, most crucial in putting the oilsands on the global energy map are the proposed pipelines across the Rockies to the Pacific coast.
"If we can't hit this one out of the ballpark as Canadians, I don't know what we can hit," he quotes Pat Daniel, Enbridge's Chief Executive, as very aptly putting it. All industry players now await with much anticipation the outcome in the new year.
This article provided courtesy of EyeForEnergy
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