Have Major Oil Companies Given Up On Canada’s Oil Sands?

Posted: February 27, 2017 in Uncategorized

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Canada’s tar sand oil is incredibly expensive to extract. Unlike conventional oil drilling, or even drilling in shale, producing from oil sands is more like open-pit mining. The oil, often found as a sticky, viscous semi-solid known as bitumen, requires extra steps to extract and process before it can be shipped. With the low price per barrel of conventional oil, costly tar sands oil has no hope of competing. The goal of the Keystone Oil Pipeline was to transport tar sands oil from Alberta to a Koch brothers refinery in the Gulf of Mexico.

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Via Nick Cunningham of OilPrice.com,

Canada?s oil sands could struggle to rebound, with potentially billions of barrels of oil being kept underground permanently.

Canada?s oil sands are incredibly expensive, some of the costliest sources of oil in the world. Unlike conventional oil drilling, or even drilling in shale, producing from oil sands is more like open-pit mining in many cases. The oil, often found as a sticky, viscous semi-solid known as bitumen, requires extra steps to extract and process before it can be shipped. That stands in stark contrast to conventional oil, which merely requires drilling into an oil field and pumping out the crude.

As a result, the breakeven cost for Canada?s oil sands is dramatically higher than most other places in the world. Obviously, costs vary from company to company and project to project, but a 2016 estimate from IHS put the average breakeven price at a new…

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