Re: [OPE-L] Oil Sands

From: michael a. lebowitz (mlebowit@SFU.CA)
Date: Wed Jan 25 2006 - 22:33:17 EST


At 12:14 25/01/2006, you wrote:
> > A major difference between the Alberta oil sands and the heavy oil
> > deposits in Venezuela's Orinoco Belt  is temperature; for the latter,
> > it averages 53C (and the resource tends to be liquid) whereas for the
> > former it is about 11C (and tends to be solid).
>
>Michael L,
>
>Why would this lead to significant differences in non-labor costs?
>Would the energy required to process the oil be significantly
>different because of the temperate difference?

No time to explore the questions--- here's an 
excerpt from a report by bernard mommer that I drew my point from:
At this point, and in order to understand fully 
the subsequent issues, it is important to step aside for a moment
in order to clarify the extra-heavy crude/natural 
bitumen distinction and discuss its implication in more depth.
The difference between extra-heavy crude and 
natural bitumen lies in the simple fact that extra-heavy crude is a
liquid whereas natural bitumen is not: there is 
no chemical difference between them. Nevertheless, as far as production
techniques and production costs are concerned, 
the difference between a solid and a liquid is of fundamental
importance. Natural bitumen is far more costly to 
produce than extra-heavy crude because it either has to be
mined, or heat has to be injected into the 
reservoir to convert it into a liquid (with results in upward of one barrel
of oil being consumed for every three barrels 
produced to generate heat). Around 90% of extra-heavy crude
in the world is located in one reservoir: in the 
Orinoco Oil Belt; and 90% of natural bitumen in the world is located
in the Tar Sands of Athabasca, in the Canadian 
Province of Alberta. The difference between the two locations
in simply their temperature: the average 
temperature of the reservoirs in the Orinoco Belt is around 53C,
whereas in the Athabasca Sands it is barely 11C. 
In short, its hot in Venezuela and cold in Canada and this affects
the state of the natural resource and its 
classification as extra-heavy crude or natural bitumen respectively.

m

>Of course, there would be labor cost differences (between Alberta
>and the Orinoco R. region) but there are probably also variations
>in transportation infrastructure that might partially off-set that
>difference.
>
>What part of the Orinoco River region are the oil sands located?
>(the Orinoco is over 2,100 km long).  What sort of discussion in
>Venezuela has there been about the possible environmental effects
>of mining and processing the tar sands?  It is in an environmentally
>important and sensitive area, isn't it?  (The Orinoco is connected to
>the Rio Negro River which is a tributary of the Amazon River).
>
>In solidarity, Jerry

Michael A. Lebowitz
Professor Emeritus
Economics Department
Simon Fraser University
Burnaby, B.C., Canada V5A 1S6

Currently based in Venezuela. Can be reached at
Residencias Anauco Suites
Departamento 601
Parque Central, Zona Postal 1010, Oficina 1
Caracas, Venezuela
(58-212) 573-4111
fax: (58-212) 573-7724


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