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Oil Sands 08 Review II

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Tue, 19 Aug 2008|

An expert panel addressed five questions crucial to the oil sands and heavy oil industry. 1. How should capital investment and the distribution of profits be adapted to: a) the need to expend energy to move oil sands or heavy oil out of the subsurface, and b) the transparency requirements of public ...

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Automatically Generated Transcript (may not be 100% accurate)

My -- is Kate so -- -- resources I. It took on the second question you know -- up. The question is how -- Equality and regulatory system changed to a -- rate of processing all recent. That prepared bitumen and heavy joyful -- that. You know you even these decision justices seemed -- one statement -- questioned by I think we should picket I'll add you to look at -- -- I would buy what what does it mean. So the stuff we at the lay off and we shouldn't have to say one thing -- really say whether it's determine -- heavy all right. The end of the day we asked you risky competing -- depth updates and few market still. We had to be as compatible all act and -- article duke and Pee-Wee Dole's convention quote even -- -- web development life. Then you good good good good look at now you know what this he called me -- -- -- acting like these would hear about it -- deprived because. Definitely call me don't mean to surprise you -- -- epic. And I've had to take him to do this one and then before I'm wolf want them to the auditory system. So -- -- look good because now we're so glad to -- if you have a better idea like what you need -- sent. If you're looking and send investors are busy he'd be doing just happened yesterday he had you know an -- 43 years. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Give us a preamble yesterday about you know executive Houston all -- what. And Cindy said -- -- -- where and how many people as yet this and I know what GC OS mean. And Lucy Williams had to understand what -- -- you -- -- really call in -- billion billion passengers understand Libby can't crawl. And the -- as you can -- -- those who don't abatement to date we deal anyway. It's the season even to look at that time look at and -- these no. So next Batman that nobody had that -- -- peaceful. So at that time he's been hot to see what he called me solve all at Andrews who want of the console and that I was -- -- little. So who's a tough -- Okay. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- This -- estimate this mandatory because we don't know what it -- we don't know what is to ask me. We will limit emission. And you know that they must remember November 11 and the condition that would come -- -- to prop because Vista -- experiment. We -- and meg diamond and this peaceful. So this is the dean and the blue remedy if you boosted total revenues duty called the independent regulatory -- but well. Maybe we should this particular all of our style -- be February about all of the livestock. So that's -- I think you know nobody but I. So when we look at what had been good -- I'm glad that we had to send them pretty close to those who -- how much -- he -- and that we are -- put Rudolph. And that's a decent bit that we so -- -- -- because. Blue bamboo FMR right now and then screwed in the sense that we remain -- -- elderly group. And the man who -- -- hit argued with -- if we make enough money with a healthy that's good bad. So instead they relate going to understand and discuss questions and phone company parent group that I used to be -- company before they'll and I. My -- and I really transcended both of my ball -- do we know -- -- here and I told him I had. -- -- -- You never should just -- -- the -- because I know you're hungry and we do all the time I've been too good guy. -- and used to keep. Keep something in life sometime this excess. And the company although -- industry. You become an identity. -- did not expect -- Revenue boost -- -- but you could -- through -- use become if you go past. You beat -- on the -- and -- to society had to do conclude on them an instrument that's a good there were about. But when you become successful and -- the last listen to -- -- Taliban I would. I -- NN by the end of fast food that we didn't fess up there then demand and so you. Now an epidemic and -- money for the and sent. The tragedies. The moonlit institutional investment. Just by the people who didn't then both -- well. Do they know diluted and a few brilliant Obama and let's not -- and even -- -- And we had a spell out. No -- Edwards didn't let they were just talking -- all present. When I system without doesn't -- from the university there that's a tough time because the recession. -- the liberals can't do better and so I should read these I should get that. But to boot. It all of our children -- community. Group had -- -- -- -- -- -- even better all the gates. Right. And I -- amazingly well how can lead -- -- didn't happen so so big that we should have been removed and then okay we're inventory. And I'm sure that Ubuntu and there's an associate -- -- -- -- -- remove -- what. -- -- -- -- we have all those who do -- And this is -- we had a -- together. -- -- -- -- -- -- -- A couple of questions from the and that. Oilsands seem to be a marginal producer right now. -- drops in price causing any concerns. And misled -- guru Bob -- I -- -- we'll talk -- -- said well we've although they've. Students and investment that -- -- that -- -- up. Do you timid and MS we always have a baseline SO standard behind them to death and that -- -- bad for the last two months. Don't ten dollar in ten. Based on the open debate and went to -- but -- highly any decent at 10%. And -- -- of the class a -- ambassador to boot. I Banesto absolutely had to demand friends that I hadn't been there every member of the type of particular -- You do have senator also moved to the -- And you combat I hope that you -- -- Joe Biden then how you look at the big picture. The problem remember about because -- -- this review it -- new cop. And this out most of the new car blew through for the first -- at this time when there. And those who doesn't -- what -- -- by the people are changing the -- To -- the rest -- man I bed. I love guru LL. I'm just very. The other comment -- -- -- -- that is that. I think those projects are looking at at least a sixty dollar oil port level to proceed. With today's cost structure. As -- mentioned before -- -- up to enough times -- last five years so. -- looked at 2000 yet projects that were based on oil but one -- in. Operating costs involved and I got probably operating costs. 3540 dollars so. Let's consider that there's a long way to go down before -- -- -- -- People's revenue and cost structure. Can question me. -- audience has more questions -- our audience here don't don't be bashful folks. What's the net energy from tar sands in other words somebody can use -- industries extracted BTU of energy from tar sands. How does this affect the use of natural gas produced in Canada. I believe. -- -- Brooke. -- good basis. It ranges from point 85 to one -- you jewel for -- But. We're natural gas. -- mining operations that are created a little bit lower energy intensity than. The -- -- operator. As a percentage isn't that -- -- between eight and 12%. The total energy. I -- I guess it depends natural gas accusing us your best for say the operation -- he says he's had -- -- percent of its operating costs and -- integrated. -- -- or upgrading its yes. But look at smaller but. That probably also drives into that fact that gas is off to go to the good -- to the 1213 dollar range. And so I would like to -- what are we. Put the digital picture on the economy of the country that -- hearing. This effects often of the US recession on the Canadian economy so. Is very hard -- that hope that it impacted. Does had projects. Just a quick all right this. Impact on the King -- is probably more. With the downturn in automobile sales and in many -- -- -- so. There's a lot of sub suppliers that are reliant on that activity. Strangely enough for me free up more manufacturing capacity to help -- -- in the last. Because right now as I understand that lot of companies are going all over the world to get vessels and steel manufactured from the projects in Alberta. So clearly there could be more for us if this works -- in candidate. To do some of that I think that's probably. Helping old people in the east I think we have a dichotomy that where. The rest Manitoba -- in in. In Canada is doing very wrong when you go east of -- not so well so. As I mentioned -- of them either. Data a lot of the a lot of and -- manufacturing. It's outside of -- so. With the US recession and again just probably affecting more and more eastern Canada than last. Just talking. I think that comedians -- few very very grateful. That -- are a country that isn't going to be short of hydrocarbon energy. For many hundreds of abuse. That I think is the effect that the your -- -- when Canadians. Repeated short term ups and downs. But if you're sitting on the 170. Million bottles equivalent. And there's only thirty million that you. That's a lot of heat and a lot of electricity and a lot of power. Or for a long time to come. So be grateful Canadians for what mother nature has given you. That's them may have to consider. The last couple questions were about fluctuations in the price of oil -- -- The deal sends her very much a long term investment the -- so they they put in are so expensive. And their reserves and there decades and decades worth. So. A lot of these photos and you're just noise and long term perspectives would -- be focused on. Another that question now did little to this but this came in after is comments on this so I think we can discuss -- tomorrow. -- the break even oil price when you say that oilsands are still economically viable and competitive. -- previously given that -- probably for maybe an integrated project that. And if Patrick your -- wood and take on included my hand up greater. I was I believe around sixty dollar level. Four ports support -- -- enough economic return based on the cost structure. Of course if you're doing -- -- is doing a lot of projects there are split up council. Because of the labor shortage infrastructure shortage up north a lot of projects are no longer integrated during the mining and site deep parts separately and and doing they are being -- herself and -- and or even and you last. For a Seti project. There revenue is probably half of the WTI price that. That you see in the paper because they also that Italy and transportation costs to it. And their cost structure is. I haven't seen anything currently but it probably. These half of that number of it -- mind so it used to be something like. One in CF of gas plus. 34 dollars a barrel so there -- in the fourteen. -- range cost -- And I'm moving on though to question to me. Which unless they can pick them up on the screen -- a moment where is the best place politically. And economically to upgrade. Could you put my ugly face off the screen and put the list of questions on which are a lot more useful than my face. But possible. Out. I think the first thing that you've got to do in responding to a question like this is make sure that we're all on the same page. What do we mean by appropriating. There is a huge difference between what you do with conventional oil which is to refine it it's already crude oil. And you have to refine it and then you can use it. But -- all science project you first of all have to upgrade it. Then you get synthetic crude oil. And then you have to send that to a refinery and then you're on the same level as conventional oil then you remind. So right away. You can see without going into any detail whatever that it's going to cost Moorer in just a book every department you can think -- To produce C combustible acceptable environmentally friendly hydrocarbon fuel. From the oil sons and it's going to be from conventional oil. Those who still haven't got the questions. Who becoming whether -- -- Well. Okay well you can be thinking ahead I'm not really worth -- each one of these things in my it was three minutes. And that I put these together so that decent audience could. Think he'll -- focusing in on some of these topics -- as we go through the fifteen minutes on this general question of where to upgrade. It's a -- and potentially very expensive -- to address. Because like many other things in the -- science. It's like a balloon you squeeze it in one place thinking you're going to solve a problem. And you create more problems than you had before -- fight trying to resolve the first problem. Can you move. All extracted product without upgrading. The very simple oversimplified opposite of that is not very far. Without -- any upgrading what do. How much has to be upgraded before it can be moved economically that's a very important question that I'd like to. He -- the audience -- here and on the Internet. To address. Is it is half of it going to be upgraded how far is it going to be upgraded -- just take the sun and I would have it and ship it off is still a bit. Or do you take it up to something that's more like. And -- twenty crude or something about order. Do you do with the left overs if and will you upgrade. Because there are very significant leftovers we had a whole. Morning to be on one of the leftovers. Sulfur. It was very clear from the discussions this morning. That we really don't have a good handle on what to do with the ten million tons a year so for the content of the of the -- -- -- -- Pet Coke. Another very voluble. Entity and in this conference and the use of that -- -- to generate the all important hydrogen. That we used to do the upgrading. Was you see all these things are tight together. What effect -- upgrading that the production site -- on the choice of market. Back to -- is politics with a capital. With the American mayors. Saying they don't want dirty oil and we would just sit there and take it. We've got a half a 1000000300. 1000000 people across the Pacific. Who don't give -- -- whether it's dirty oil or not they'll take anything we can sell woman and -- that they're gonna continue to get. But if we don't upgrade -- what effect does it. On pipe playing it sucks over the 49 Barlow was a posting -- it ripe old all the way across the Pacific. These are there really important and very sensitive issues both politically and economically. Does not upgrading in Alberta. Mean that good how do you aidid is lost to the problems the owners of the of the commodity. I think we all know enough business law. To see well -- could be anything else but -- remedy that if we're not collecting the the volume lighted. Here by upgrading it to be higher volume -- And all you have to do is to look at that big differential between crude. But heavy crude and light crude on today's market it's 1520 bucks a -- So let's -- And now -- number six. And I I hesitated. -- -- including this because it's just so all politics particularly this year with November but only a month or two away. What does not have to see about all of us. How many of you realize that the amount of oil that we Canadians are required. Required. To give the Americans if they want them is specified it not. We give it away. I'm not gonna go to the details of what we gave it away floor. But -- -- obliged to provide the United States of America but -- certain among -- -- all hydrocarbon fuel. How does not fit in to the question. Because if we -- the raw fuel -- to the US. That that means that. Dude -- with far less to upgrade to ship -- -- longer distance. How much upgrading -- dilution. Still bit. For -- have you in the Internet -- not totally familiar with bill but is really an abbreviation of diluted -- addictive it's too -- to pipeline so you -- lose it. -- -- -- -- And it's gold -- and that you can say and don't like what. Hello how much -- thought that we have to do. Now comes the environmental -- in the lawsuit how much does upgrading an Alberta I had to -- -- is already high CO2 production. One thing is if we should put them and put it were a pretty it then it will let -- let the buyer. The penalty for Pope Leo all the CO2 that -- produced from -- made. So we get rid of some of the -- to blacks from the -- court. You led the customer -- not us. And finally. -- we ship the -- -- the oral side product. Of the problems we're also possibly shipping out. Secondly industries based on byproducts of the -- -- That otherwise would be -- remained in Alberta and supported and I'm thinking of the polymer industry for exile or the fighting chemicals industry so these -- -- I've -- -- more than two minutes but these are all questions that I hope the audience here in the audience on the Internet will pick up and -- -- with much sharper. Responses that I've been able to get. Question from the Internet.

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