Expert lambastes Canada's massive oil sands play
Canada | Reuters.co.ca
OTTAWA (Reuters) - Canada is squandering valuable natural gas in trying to develop its much-vaunted oil sands reserves, a Houston-based oil expert said on Wednesday.
"We shouldn't be laying a foundation of saying we can replace Saudi Arabia's reserves with Canada's tar sands," analyst and investment banker Matthew Simmons told a business and media audience in Ottawa.
"They are extremely energy-intensive, to turn it into usable energy, and natural gas is in decline."
He says the oil sands, centered in northern Alberta, would be more appropriately called coal. Natural gas is used to heat steam which is injected into the tar sands to help convert it into oil.
The energy industry is investing tens of billions of dollars on projects to develop the massive resource, which now accounts for more than one third of Canada's overall oil production.
The resources rival Saudi Arabia's conventional oil reserves in size, but are far more expensive to develop and operate, partly due to the need for natural gas as a fuel.
Referring to Arctic gas which is set for development in Canada's Mackenzie Delta, he said: "It would be a tragedy to use all of that for converting tar sands into low quality oil. Natural gas is just too valuable."
The whole process uses far more energy than it ends up producing, Simmons said.
OTTAWA (Reuters) - Canada is squandering valuable natural gas in trying to develop its much-vaunted oil sands reserves, a Houston-based oil expert said on Wednesday.
"We shouldn't be laying a foundation of saying we can replace Saudi Arabia's reserves with Canada's tar sands," analyst and investment banker Matthew Simmons told a business and media audience in Ottawa.
"They are extremely energy-intensive, to turn it into usable energy, and natural gas is in decline."
He says the oil sands, centered in northern Alberta, would be more appropriately called coal. Natural gas is used to heat steam which is injected into the tar sands to help convert it into oil.
The energy industry is investing tens of billions of dollars on projects to develop the massive resource, which now accounts for more than one third of Canada's overall oil production.
The resources rival Saudi Arabia's conventional oil reserves in size, but are far more expensive to develop and operate, partly due to the need for natural gas as a fuel.
Referring to Arctic gas which is set for development in Canada's Mackenzie Delta, he said: "It would be a tragedy to use all of that for converting tar sands into low quality oil. Natural gas is just too valuable."
The whole process uses far more energy than it ends up producing, Simmons said.
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