http://www.rabble.ca/babble/ultimatebb.php?ubb=get_topic&f=21&t=001312

[ 12 September 2005: Message edited by: DrConway ]

Incidentally, I would like to take up the degree of recycling of heavy and light machine oils, such as the commonly-seen collection of oil from car oil changes.

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Originally posted by DrConway:
What I'm curious about is the degree to which this recycling of our engine oils has extended the overall life of the crude oil supply we have got left.

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According to a story it Wed. Sept 21 Report On Business, diluent is:

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...a condensate - a very light oil - that is used to dilute 'heavy oil' and bitumen, the super heavy crude that comes out of the oil sands, allowing the normally too-viscous product to flow through a pipeline.

...Roughly one barrel of diluent is needed to move two barrels of bitumen through a pipeline, a significant cost, and high diluent prices actually made bitumen production briefly unprofitable.

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For a while last winter, they were paying a premium of US $23 per barrel for this diluent. Normal premium has been in the US $4 per barrel range.

Not all production requires diluent, but current requirements are for 200,000 barrels a day, with a projected requirement for 500,000 bbls/day by 2015.

While a fair bit of this stuff is manufactured in Canada, a certain amount will have to be imported from 'countries that export liquified natural gas'.

Energy in and energy out has already been discussed, so I won't go back over that territory.

However, it's worth pointing out that having to use a barrel of highly refined product to move two barrels of extra heavy crude brings the oil sands pretty much to the point where it doesn't make sense to bother with it.

It must be very close to energy in = energy out, but that figure is very hard to come by. I guess no one really wants to it to be public knowledge.

For that matter, does the diluent even have to be petrochemical in nature? As long as it's a not-too-viscous oily substance, it could be anything, no?

Thinking of fractions, isn't motor oil significantly more viscous than gasoline or even diesel? It might not be usable as gas, and it might not be the same stuff that gets used as gas. Crude gets separated off into a whole range of viscosities, right down to waxes at the hard end. The oil companies make a profit on the fuel part, and the rest of the fractions are gravy. So the stuff that's used for plastic, or chewing gum, f'rinstance, wouldn't generally be usable for gasoline, and vice versa. In that sense the whole deal is a bit less wasteful than we tend to think--it's not a matter of burning a finite resource that we could be using for durable goods. The durable goods part is pretty much distinct from the part that gets burned. Of course nowadays they're busy trying to come up with ways to make the durable goods part burnable . . .

Read it here.

Said differently, this industry uses 7% of all natural gas consumed in Canada, projected to be 20% in 10 years.

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Originally posted by GreenNeck:
Said differently, this industry uses 7% of all natural gas consumed in Canada, projected to be 20% in 10 years..

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Mmmm . . . I don't know. Seems to me that doing the diluting wouldn't use up the diluent. Either it gets refined along with the heavy stuff when it reaches its destination, in which case it gets burned the same way it would have if it hadn't been used as a diluent, or the stuff gets fractioned and the light would be shunted aside; in the latter case, theoretically you could pipe the separated diluent back and use it again. Either way, it's not as close to energy in = energy out as a cursory glance would suggest.

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The energy in/energy out I was referring to included the energy involved in getting the stuff out of the ground. The diluent is added after the fact to make is fluid enough for the pipeline.

The diluent is a highly refined oil, which the tar sands producer pays a premium over the world price. In the article they pointed out that last winter (when the price would have been around $40 - $50 bbbl/oil) tar sands producers were paying US $23 premium per barrel for the diluent.

That means for every two barrels of tar sands oil, they were paying about US $75 to get the stuff to move down the pipeline.

Outside of price, the necessity of the diluent means at the very best, the tar sands oil than needs the diluent is yielding only one barrel for every two barrels retrieved.

Adding in the energy required to get the stuff out of the ground, (and the orfiginal energy used to produce the diluent) and you can see the net oil produced is less than 50% of the total retrieved.

As far as getting the diluent back at the end of the line, that doesn't make any sense. Even if it were possible (which the article didn't even mention - Encana seemed to think they needed a new supply), the diluent is already a highly refined product. Re-refining it just wastes more energy.

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For that matter, does the diluent even have to be petrochemical in nature? As long as it's a not-too-viscous oily substance, it could be anything, no?

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Not according to Encana (EnCana is one of North America's top natural gas producers. It is also among the largest holders of gas and oil resource lands in North America and is a leader in the recovery of oilsands bitumen).

I found a web version of th story so I'll post it. It is not as detailed as the Report On Bsuiness article but it has the main points.

http://tinyurl.com/a6bvs

Note this story is focused on the fact the diluent needs will be filled by importing.

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Originally posted by GreenNeck:
Extracting oil in the Alberta tar sands area consumes 600 million cubic feet of natural gas each day, projected to reach 1.8 billion in 2015.

Read it here.

Said differently, this industry uses 7% of all natural gas consumed in Canada, projected to be 20% in 10 years.

The Americans need both our oil and our gas; at that time they'll have to decide which one it is.

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Total, a French company, is looking into using a nuclear plant to extract the oil, rather than natural gas. Story in the WSJ, no link, but see
here.

There's another whole argument about the economics of nuclear power and the waste generated. However, in the end, I doubt that will stand in the way of using nuclear power. As I've said before, the industrial economies need oil to survive, and they will allow nothing to stand in the way of getting it.

However, nuclear power won't make the oil slide down the pipeline any easier. For that diluent will still be needed.

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There is no alternative to market prices, even market prices that are absurdly driven by rumour and hysteria.

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That's what I like about Corcoran, he is very clear about what the 'market' really means.

Another quote from same article:

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But the higher price is the market mechanism that keeps supply flowing to people who need it most.

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In Corcoran's feeble little mind, he has confused need with (want + ability to pay).

To see how foolish his idea is, imagine a free market in air. Talk about hysteria, would the market get a bit absurd if people were faced with losing their air supply? Probably.

Would the market supply air to those who 'need it most'? No, it would supply it to those who had the greatest ability to pay.

In a sense we are already operating a market in air, in that the wealthy can live away from the plants and factories that despoil the air, while the poor get to live close to those same plants. Witness Bhopal.

Eventually everyone pays the price for despoiling the atmosphere, but for a limited time, the wealthy can avoid the consequences of their actions.

The same holds true for oil, which is a necessity in an industrial economy. Oil isn't delivered to those who 'need it most', it's delivered to those who both want it most, and have the greatest ability to pay.

The poor shnooks who drive back and forth to the job every day don't cut consumption, they just absorb the increased cost by cutting consumption in other areas.

Eventually that lowered consumption affects even the wealthy, but in the meantime, their tiny little dinosaur brains can't make the connection.
Their inability to reason is suggested in another article about oil in the same FP issue.

Clive Mather, president and chief executive of Shell Canada Ltd. predicts that:

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...world demand for energy will double or possibly triple in the next 20 to 30 years.

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And whose fault will that be:

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"We talk a lot about North America and Europe and their SUVs, but the real issue is in the developing world."

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Ah yes, those pesky Indians and Chinese having the audacity to consume oil at rates roughly 1/20 of our own. What make them think they can get away with that?

Of course, according to Corcoran we must 'need' it the most.

Gqynn Morgan, president and CEO of EnCana Corp. sort of echoes the blame the developing world:

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"We all know (that) the single biggest reason for high oil prices is that never before in the history of the world have there been (nations of) two billion people (in Asia) growing at rates of 8% or 9%

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To be fair, Morgan says it is North America which will have to change it's ways:

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"I believe the North American urban model is flawed"

..."Why do we have millions of cars every day parked on the road (in traffic jams) burning fuel when there is a better way?"

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Problem is, that better way involves a public process, and using public funds to make the changes necessary to cut fuel consumption.

According to Corcoran, there is no alternative to the market, so we're back at square one.

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...Whom should we believe? I have now read 4,000 pages of reports on global oil supply, and I know less about it than I did before I started. The only firm conclusion I have reached is that the people sitting on the world's reserves are liars...

..."The bottom line," Hirsch says, "is that no one knows with certainty when world oil production will reach a peak, but geologists have no doubt that it will happen." Our hopes of a soft landing rest on just two propositions: that the oil producers' figures are correct, and that governments act before they have to. I hope that reassures you.

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Originally posted by arborman:
Re: the diluent requirement to make the bitumen run down a pipeline.

Is it not feasible to refine the bitumen at the source, rather than doing backflips to pipe it to a refinery elsewhere? Presumably, if the cost of diluent goes up too much, this will become an option. I'm surprised it isn't now.

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According to the story in Report On Business:

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Current diluent production in Canada is 200,000 bbls/day.

...Diluent is a mostly unknown commodity outside the oil business and had a low profile even in Alberta until last winter when the industry was slammed hard by severe shortage.

..."It became clear we were facing a long-term diluent shortage but we were already pretty much on the doorstep of one," Mr Bird (Richard Bird, Enbridge vice-president) said.

...Calgary based Encana said it plans to use an import terminal owned by Methanex Corp. in Kitimat...to handle 25,000 barrels a day of imported diluent.

...Encana said by 2015 the industry could need 500,000 barrels (a day) of the product.

...Enbridge Inc. wants to build two pipelines - one to move oil sands crude to the coast for export and another to carry diluent imports to Alberta

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These quotes are not necessarily in the order in which they appeared in the story.