Oil Sands Get Ready to Rock and Roll

Every year, the Canadian Heavy Oil Association and the Society for Petroleum Engineers hold a one-day symposium on the technical advancements and research being conducted in the oilsands.

It's structured as an off -the-record symposium, which means no papers are published or handed out; the purpose is to bring forward the research being conducted in oilsands to encourage discussion and information sharing.

Word has it that it's the best place to get a handle on what's going on in oilsands research and development.

On Monday morning, the room was packed with engineers -- sporting the occasional pocket protector -- and one could easily imagine any one of the four physicists from the Big Bang Theory sitcom among the participants.

And, as the lucky outside observer, it's clear to me within a few presentations that the criticism generously levelled at the oilpatch for its lack of research and development is misplaced. _CalgaryHerald

Oil prices in the $80 range are spurring oil exploration and production technologies. Canadian oil sands represent a huge resource of more than 1 trillion barrels of oil equivalent. At these prices for oil -- even if demand stays flat -- the technology of producing oil sands is only going to get better.

Today, the focus continues to be on increasing efficiency and decreasing costs, but along with that is a new angle -- minimizing the environmental footprint at the same time.

To borrow from Maslow's hierarchy of needs, it's an industry that has figured out the extraction puzzle -- the basic needs -- and can therefore move up the triangle to addressing the environmental challenges.

The fact that the research and development is not taking place behind lab benches and using endless Petri dishes doesn't mean the work isn't being done; it just happens in a different form -- on-site and in real time.

All this is important in the context of the role Alberta's oilsands will play in the global energy equation.

The reaction to oil prices being over $80 US per barrel has been wide-ranging...

...there is more than enough pipeline capacity into the U.S. destined for refineries capable of processing the bitumen, which means that difference in pricing between light and heavy oil are expected to continue to be very narrow.

Therefore, the work being done in the oilsands to improve efficiency and decrease the environmental footprint is even more important than ever. _CalgaryHerald_via_EnergyTribune

Current high prices for oil are largely the result of monetary policy at the world's central banks, and a current lack of safe harbour investments for large investors due to the ongoing recession. High oil prices continue to exert a moderating influence on oil demand in the US. Severe demand destruction could easily set in should speculation get out of control as happened in the summer of 2008, when multiple financial bubbles burst almost simultaneously.

The best course for governments is to structure their tax and regulatory infrastructure in such a way as to reward entrepreneurs and startups -- rather than to tax and regulate them to death, and starve them of energy as the Obama - Pelosi regime seems intent on doing.