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Yeah absolutely. How can this be a bust time when the oil prices are so high?
by urthor 5y ago
Yeah absolutely. How can this be a bust time when the oil prices are so high?
- julianlam 5y agoI am no economist, but my understanding is that Alberta's oil sands must be extracted via fracking, which is expensive and only profitable when oil prices are high. That there is lots of oil available is besides the fact if it is no longer economically feasible to extract it. This quality of the oil makes Alberta extremely sensitive to pricing shenanigans OPEC plays every once in awhile. A couple years back when oil prices were artificially low, it was due to OPEC pricing oil well below even their cost, purely to drive other oil producers out of the game.
- mdtancsa 5y agoThe above added costs as well as the challenge of getting it to refineries. Lack of pipeline capacity to the coast (particularly Texas) is a big factor too.
- goodcanadian 5y agoYou are conflating a couple of things. Oil sands extraction is completely different from fracking. But, you did get the basic essence right in that oil sands extraction is quite dirty and expensive. Fracking is actually a reasonably cheap way to extract additional oil from more conventional wells. That happens in Alberta, also.
- julianlam 5y agoThank you for the clarification!
- shagie 5y ago> my understanding is that Alberta's oil sands must be extracted via fracking https://www.oilsandsmagazine.com/technical/mining/surface-mining https://www.oilsandsmagazine.com/technical/mining/surface-mi... and https://www.oilsandsmagazine.com/technical/mining https://www.oilsandsmagazine.com/technical/mining These are large surface mines. The economics of it have to do with the massive amount of earth moved, and the relatively low amount of oil recovered per unit volume... and the work needed to be done to restore the mine afterwards.
- justin66 5y ago> restore the mine afterwards Cue the laugh track.
- SketchySeaBeast 5y agoJust view it from space: https://www.google.ca/maps/@57.0798964,-111.8686816,106744m/data=!3m1!1e3 https://www.google.ca/maps/@57.0798964,-111.8686816,106744m/... It looks a right mess.
- werdnapk 5y agoOil prices aren't high. $150+ in 2008 was high.
- skeeter2020 5y agoIn addition to higher extraction costs: 1. Alberta oil doesn't get the $80+ price you see quoted on the news. Although the major price gap has narrowed dramatically it still sells at a significant discount due to type and location. 2. Access to refineries and market is a real... challenge (to put it mildly). There has been huge opposition to expanding pipeline transport, some of it genuine (Environment, Culture) and some of it driven by self-interest ($$$). I don't want to start this debate but the result is we're still using a lot of fossil fuels right now, so (a) it's more expensive, (b) it's increased dangerous transportation by rail and (c) it's increased reliance on imports from some pretty nasty places in the world. The funny thing is I moved to Calgary in the early 2000's when oil was well under $50/bbl and the environment was one of unbounded optimism and potential. When oil hit the same price a few years ago on the way down the would have thought the world ended.
- pixelgeek 5y ago> The funny thing is I moved to Calgary in the early 2000's when oil was well under $50/bbl and the environment was one of unbounded optimism and potential. When oil hit the same price a few years ago on the way down the would have thought the world ended. Because the province ran out of the easy to extract oil and had to move to bitumen extraction which requires a much higher price of oil to be profitable. Oil sands need the price of oil to be in the area of $100+ a barrel to be profitable.