Re: [OPE-L] Oil Sands

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Mon Jan 23 2006 - 11:26:05 EST

glevy@PRATT.EDU wrote:

>Hi Paul C,
>Perhaps I don't understand the technical processes enough, but it
>seems to me that a) there is much more labor input typically with
>conventional oil 'exploration' and drilling (especially when first
>setting-up a site) and b) the labor input for the extraction of
>oil from the sand is relatively minimal (i.e. there are truckdrivers,
>working essentially alone, who dig the sand and place it in the
>trucks and there is the labor at the processing plant). It is
>noteworthy in this connection that there is a sizable investment in
>constant fixed capital (e.g. the trucks are specially made and
>relatively expensive), but I'm not sure how that compares to the
>constant capital requirements for conventional drilling.
>OTOH, in one sense the wage costs for extracting oil from the sands
>in Alberta are very high: it is not a very populated area and
>relatively high wages  have been offered in an attempt to induce
>workers to re-locate there.
>In solidarity, Jerry
 From my reading of literature on the oil sands during the 1975 oil crisis
my recollection was that the high costs came from  the work that
had to be done to extract the oil from the sands, and the greater
degree of refining needed. As I understand it, oil sands or shales
need to be baked in a process analogous to the reforming of coal
into oil. It is this baking that is costly.

It also means that a significant part of the energy in the oil sands
has to be expended in the processing itself. Another cost comes
from the relatively lower hydrogen content of the oil and possibly
its high sulphur content. This makes it less suitable for the
light oils need for cars, but it remains suitable for heavy fuel oil.

Paul Cockshott
Dept Computing Science
University of Glasgow

0141 330 3125

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