Environmental Engineering Reference
In-Depth Information
is the best return on the R&D dollar invested for increased domestic energy supply and what
are the long-term prospects for commercial application of unconventional fuels technology?
Another important consideration to look at is where the oil industry is investing its capital and
R&D for oil sands projects.
In light of the environmental and social problems associated with oil sands development,
e.g., water requirements, toxic tailings, carbon dioxide emissions, and skilled labor shortages,
and given the fact that Canada has 175 billion barrels of reserves and a total of over 300
billion barrels of potentially recoverable oil sands (an attractive investment under current
conditions demonstrated by the billions of dollars already committed to Canadian
development), the smaller U.S. oil sands base may not be a very attractive investment in the
near-term.
U.S. refinery and pipeline expansions are needed to accommodate Canadian oil sands
developments. Those expansions will have environmental impacts, but the new infrastructure
could strengthen the flow of oil from Canadian oil sands. This expanded capacity will likely
lead to even greater investment in Canada.
Whether U.S. oil sands are developed, Congress will continue to be faced with regulatory
matters. Oil imports from oil sands are likely to increase from Canada and the permitting of
new or expanded oil refineries will continue to be an issue because of the need to balance
concerns over the environment on one hand and energy security on the other.
Prospects for the Future
Because capital requirements for oil sands development has been enormous and risky,
government involvement was seen as being essential in Canada, particularly during sustained
periods of low oil prices. This private sector/government partnership in R&D, equity
ownership, and public policy initiatives over the last 100 years has opened the way for the
current expansion of the oil sands industry in Alberta.
Ongoing R&D efforts by the public and private sectors, sustained high oil prices, and
favorable tax and royalty treatment are likely to continue to attract the increasing capital
expenditures needed for growth in Canada's oil sands industry. Planned pipeline and refinery
expansions and new upgrading capacity are underway to accommodate the increased volumes
of oil sands production in Canada. U.S. markets will continue to be a major growth area for
oil production from Canadian oil sands. Currently, about 5% of the total oil refined in the
United States is from Canada's oil sands.
Even though prospects for Canadian oil sands appear favorable, factors such as water
availability, waste water disposal, air emissions, high natural gas costs, insufficient skilled
labor, and infrastructure demands may slow the pace of expansion.
Prospects for commercial development of U.S. oil sands are uncertain at best because of
the huge capital investment required and the relatively small and fragmented resource base.
The Task Force on Strategic Unconventional Fuels reported that oil sands comprise only
about 0.6% of U.S. solid and liquid fuel resources, while oil shale accounts for nearly 25% of
the total resource base.[77]
Search WWH ::
Custom Search