Saturday, August 25, 2007

Matt Badiali from Daily Wealth On The Alberta Oil Sands

This is a great article by Matt Badili that was written early last year. It is hard to imagine how dirty sand could be bolstering a provinces economy by Matt spells it out in laymans terms.

How Big are Oil Sands?

"54,360 square miles.

It's comparable to the total land area of Florida… but there's much more oil in the Alberta Tar Sands than in Florida. In fact, more oil is locked in this deposit than in all of the Middle Eastern countries combined."

How Is Oil Trapped In The Sand?

"The oil in the Tar Sands is like soda that has gone flat. Imagine a normal oil deposit is like a regular bottle of soda. The oil is mixed with gas and under pressure. If the bottle cap leaks, then the gas escapes and the soda goes flat.

Leave a glass of soda in your car in the summer, and the soda will evaporate into thick syrup. That's essentially what happened to the oil that became the Tar Sands. It leaked into an ocean and all the light fractions were lost. The heavy oil mixed with the bottom sediments. The remaining material, called bitumen, is similar to molasses mixed with water, sand, and clay. Dirty oil!"

How Do We Get The Oil Out Of The Sand?

"There are two processes to get the oil out of the dirt.

The first is pit mining. Large excavators load the tar sand into even larger dump trucks. It's the ultimate economy of scale. These trucks are so big that their tires are the biggest expense out there. Really! The tires cost so much money that production is often reported in terms of tread wear.

CBS aired a 60 Minutes special on the Tar Sands project last Sunday. They interviewed the driver of one of these humongous dump trucks. There are 14 steps to get up to the cab of the truck. That's like driving from the second floor of your house.

Mining is only the first step, however. Once out of the ground, the oil must be separated from the dirt and muck.

They use a process similar to a washing machine. The sand falls to the bottom, and the oil rises to the top of the water. The oil is skimmed off the top and sent away for processing.

The second way to get the oil out of the ground is a process called SAGD – steam assisted gravity drainage.

With this method, two wells are drilled into the Tar Sands, one above the other. The upper well uses steam to heat the sediment in place. The hot oil collects in the lower pipe and gets pumped to the surface, sand free.

Once the oil is treated, the end product is one of the best light, sweet crude oils on the market. Best of all, this sweet crude is coming from Canada… and the last time I checked, nobody was lobbing missiles near the Tar Sands."
To Read The Full Article Click Here

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