Of Tar Sands and Sand Castles

Published on Aug 16, 2006 in the BL

One of the arguments against Peak Oil is that reserves of Non-conventional sources such as Tar Sands and Oil Shale are huge as compared to Conventional Crude and that these would help offset the decline in Conventional Crude production. This paper shows as to why production from these Non-Conventional sources is very small today inspite of the massive investments made to date and as to why it would be very difficult to increase the production from these sources. The conclusions are that the reserves of conventional crude alone would ultimately define the shape of the production profile for a long time to come.

One example would probably summarize how difficult it is to increase Production at Tar Sands of Canada. Shell wanted to increase their production at Canada by 100,000bpd. Their initial estimate of the costs was $4 billion (July 2005) which was later upgraded to $7.3 billion and around Aug 2006, they increased the estimate to $12 billion. & all this is for an incremental production of just 100,000 bpd.