KUWAIT

"OPEC producer Kuwait's oil reserves are only half those officially stated, according to internal Kuwaiti records seen by industry newsletter Petroleum Intelligence Weekly (PIW).  'PIW learns from sources that Kuwait's actual oil reserves, which are officially stated at around 99 billion barrels, or close to 10 percent of the global total, are a good deal lower, according to internal Kuwaiti records,' the weekly PIW reported on Friday. It said that according to data circulated in Kuwait Oil Co (KOC), the upstream arm of state Kuwait Petroleum Corp, Kuwait's remaining proven and non-proven oil reserves are about 48 billion barrels."
Kuwait oil reserves only half official estimate-PIW
Reuters, 20 January 2006

"But the days of easy oil [in Kuwait] are over. Even the great Burgan field is beginning to falter and will no longer compensate for stalling oil production in the north of the country, where the oil fields are ageing more quickly. After many years in which it did not have to look beyond its borders for help, the country is being forced to seek the advanced equipment and managerial skills only foreign oil companies can supply. Kuwait is not alone. From the Middle East to the North Sea, and Alaska to Latin America, the large oil fields on which the world has come to rely to fuel its economic expansion since the second world war are requiring increasingly advanced technology and know-how to coax their last oil barrels to the surface.... Removing, cleaning and disposing of the millions of barrels of water the north fields will produce every day as they come to the end of their lives, is more than Kuwait's oil company can handle, its engineers and executives say.... It is crucial for the oil majors' future that they win the day. With few, if any, big oil fields left to find, the big western companies are facing shrinking production and reserves. They are forced to venture into riskier spots such as the harsh terrain of Siberia's Sakhalin island where extracting a barrel of oil can cost 6-7 times as much as it does in Kuwait."
Field work: why Kuwait's rulers are being forced to ponder a new pact with big oil
Financial Times, 24 January 2006

NORWAY

"Preliminary figures from the Norwegian Petroleum Directorate for 2005 indicate that average daily production on the Norwegian Shelf dropped to around 2.5 million barrels per day in 2005, down 11% from 2.8 mbpd in 2004. Final figures will be available later in January. The results mark a continued decline from the peak in 2000 of 3.14 million barrels per day (excluding condensate)."
Norwegian Oil Production Down 11% in 2005
Green Car Congress, 2 January 2006

"Norway's oil production slipped to a preliminary 2.46 million barrels per day on average in February from 2.49 million in January, and the tally is a marked drop from previous years, reports reaching here from Oslo said on Friday. Production in February 2005 was 2.657 million bpd, and in February 2004 it was 2.988 million, according to figures from the Norwegian Petroleum Directorate (NPD). Even if gas production during the same period has shown a steady rise, the decrease in oil production of 500,000 bpd over two years is dramatic. Oil companies predict that the current situation is likely to last through the year."
Norway's oil production continues to fall
Xinhua (China), 11 March 2006

"Norway's once vast oil reserves in the North Sea are dwindling, and the government is facing tough choices when planning for the country's economic future. Since oil was discovered on the Norwegian continental shelf in 1971, this small nation has been propelled into the world's third largest oil and gas exporter, and petroleum activities contribute 20% of the gross domestic product (GDP). But now forecasts suggest the country's economic mainstay has started its inevitable decline. The oil and energy minister, Einar Stensnaes, told BBC News Online it was time to start looking at the alternatives."
Norway prepares for dry North Sea
BBC Online, 14 April 2004

"The Norwegian State’s Petroleum Directorate (NPD) regularly supplies very good and detailed data describing the resource situation at the Norwegian Continental Shelf, but unfortunately that is not matched in terms of rhetoric. The latest report shows production figures and assumed remaining reserves, but in a number of interviews lately, the NPD has underlined that We will still be exploring for oil 50 years from now, and for natural gas in 100 years’ time. This kind of rhetoric gives people the message that oil and gas will flow almost 'forever', and hinders much needed investment in other sources of energy. The comments by the NPD are extremely misleading. In an attempt at clarifying the situation, I have studied the NPD data and the result is surprising. If we continue the exploitation of the shelf at today’s extraction rate (163 million standard cubic meters of oil equivalents a year), production from current fields would last only 8 years. The NPD also lists discoveries, awaiting evaluation and development approval, together with the potential for improved recovery in current fields, adding another 2 years of life at present rates. Potential new discovery is estimated at 1.385 million Sm3 oil equivalent, which divided by the annual extraction as of today gives another ten years. In other words, at today’s extraction rate, oil will last only between 8 and 18 years."
Harald Røstvik
ASPO Newlsetter 52, April 2005

BRITAIN

"Britain lost its oil independence last year for the first time since the 1970s as the country continued to run down its North Sea reserves. The UK imported £670m more oil than it exported in 2005, the Office for National Statistics said. It is the first annual deficit for oil trade since 1979, when the North Sea's first fields came online....The landmark follows figures last year showing Britain became a net importer of natural gas in 2004....In a further sign of the UK's reliance on oil, the Department of Trade and Industry said the amount stockpiled by oil companies in their refineries was almost halved in December as suppliers dug into stocks to satisfy growing demand for fuel."
UK goes back to being oil importer
Daily Telegraph, 10 February 2006

"British North Sea oil output has declined steadily since 1999.... as OPEC was quick to point out the biggest fall in production by any major producer since 1999 is not an OPEC nation. It is the UK... The rate of decline has ranged from 6% to 17%, year-on-year. Experts say this is not surprising. 'It is because the way offshore fields are developed, [which is] all in one go and produced as fast as possible, for economic reasons,' says Dr Michael Smith, head of research analysts EnergyFiles. 'When they start to decline, they do so fairly rapidly. All these big fields came on stream roughly at the same time so they have all tended to reach their maximum at the same time, then combining to decline.'  The International Energy Agency (IEA) has forecast a slight pick-up in UK output next year to 1.85 mbpd but it too sees a continuing decline to 1.66 mbpd in 2007. Even the UK Offshore Operators Association (UKOOA) says that declines are inevitable. Even with increased spending of about £4.3bn a year, it believes the decline will still be about 7%....The UK produced an average of 2.72 million barrels a day (mbpd) in 1999, hitting a high of 3.1 mbpd in August. But by June 2005 this had fallen to 1.7 mbpd, a drop of 34%. 'These declines do seem to be irreversible now,' says Deborah White, senior energy analyst at Societe Generale. 'In my experience, even when [oil] prices are extremely high and spending [on extraction] is extremely high, it has been virtually impossible to reduce decline rates below 3%.' What is also interesting about the UK's declining oil output is that it has been rather consistent. In 2000, production was down 8.1% from its 1999 high, then falling 6.8% in 2001. The decline slowed to 0.5% in 2002, prompting calls that an output 'rebound' was on the cards. But 2003 saw an 8.8% decline, rising to 10% in 2004. This year has seen a similarly startling decline. In February, year-on-year levels were down 13%, rising to 17% in March.... As Britain becomes a net importer of oil, as it first did this summer, not only does falling output cost money. So does the very expensive energy - oil, gas and liquefied gas - bought to replace it. In this respect, government figures do not provide much hope for North Sea gas output either. Output fell 5.5% in the second quarter of 2005, according to DTI figures, while imports increased by 53.5%. ..... The UK is facing a sea-change in attitudes towards oil. Whilst high prices may ease the pain right now by providing extra tax for the chancellor, our own supplies are dwindling.  'I am forecasting that the UK will be a net importer of oil around 2007,' says Dr Smith. 'By 2015 the UK will need to import between 600-700,000 bpd.'"
Is UK oil output running on empty?
BBC Online, 22 November 2005

"A marked downturn in North Sea oil production means that the UK will become a net importer of oil at least three years earlier than the government anticipates, according to new figures from the Royal Bank of Scotland. Even the contribution from the Buzzard field - which will add about 180,000 barrels of oil per day from 2007 - is seen as insufficient to prevent a looming dependence on the vagaries of world markets. The Department of Trade & Industry is sticking to its prediction that the UK will not become a net importer of oil on a sustained annual basis until 2010. However, figures from the RBS Oil & Gas Index show production from the UK continental shelf unexpectedly shrank to 1.5 million barrels per day (bpd) in October, 8-per cent down on the previous month and a 14-per cent fall on October 2004. Andrew McLaughlin, group chief economist at RBS, said: 'The International Energy Agency is predicting UK demand of 1.8 million bpd in 2007. But we'll be lucky to produce an average of 1.7 million bpd in 2005 and it seems unlikely that North Sea production is going to rise above 1.8 million bpd over the next 12 months. 'There had been a hope both in the oil industry and within government that a period of sustained high oil prices would create more incentives to produce in the North Sea. But that has not come through. North Sea fields are maturing rapidly and as a result the UK looks set to become a net importer of crude oil earlier than the government is anticipating. Even current high prices will be insufficient to stem the long-term depletion of North Sea fields.' UK crude production peaked at 2.9 million bpd in 1999 but has been in long-term decline ever since. Since 2004, the UK has been a net importer of gas."
North Sea Production Slump Casts Doubt on Government Figures
Sunday Herald, 6 February 2006

"Oil companies will probably sell at least as many U.K. North Sea assets as they did in 2005 to cash in on high prices and get rid of maturing oil and gas fields, a U.K. acquisitions consultant said... 'The U.K. is not where our future growth is going to come from,' said Martin Tiffen, Total's U.K. business development director. 'The U.K. is already one of the highest cost basins in the world and the only direction is up.' Shell sold the most U.K. fields over the past three years, though it also participated in the largest number of exploration and appraisal wells over that period. 'We cannot ignore the fact that it is a mature business,' Robert Jan van Melson, Shell's business development manager for Europe, told the conference."
North Sea Companies May Sell More Oil, Gas Fields Than in 2005
Bloomberg, 15 February 2006

GLOBAL

"Whilst the situation in relation to post-peak UK oil production in the North Sea is reasonably clear, the British government’s position in relation to global oil supplies is more opaque. Claire Durkin, head of the Energy Markets Unit at the Department of Trade and Industry, spoke at a conference on oil depletion organised by the Institute of Energy in London on 2 November 2005. She has responsibility for international energy policies, and in particular for securing a safe and secure supply for the UK. Although the meaning of ‘imminent’ was not defined, the text of her formal presentation concluded that  'There are uncertainties but we are not in imminent danger of global oil production peaking…. But the world faces serious energy challenges…'. The principal challenge identified was the need to ensure that the development of global oil reserves 'is timely, sufficient and sustainable' bearing in mind that a 'Huge amount of investment is needed throughout the global oil supply chain' and that 'A greater proportion of future supply will come from countries currently perceived as politically or economically unstable'. However, Ms Durkin also spoke beyond the text of her prepared presentation. In discussing when the global peak might be she said: 'We just don’t know… I don’t think OPEC is a given…. We are not talking comfort zone…'. She also referred to the difficult dilemma that government faces between 'waking people up to the realities' and 'not scaring them'."
'Power Politics' - The Dash For The World's Energy Resources
RICS Valuation Conference, 29 November 2005

"In the US, Richard Heinberg, a professor at New College of California recently discussed the issue of peak oil and said: 'Many analysts are zeroing in on the next five years as the point where this is going to happen. Meanwhile in the UK, Jeremy Leggett, author of the book 'Half Gone: Oil, Gas, Hot Air and the Global energy Crisis, who also happens to head up Solarcentury, has been talking at the Society of Investment Professionals, and warned that global peak production of oil is likely to be hit in 2008. Mr Leggett emphasised that the world's largest oil fields, situated in Kuwait and Saudi Arabia were found in the1930s and 40s, and that the best year for finding new oil reserves was 1965. Mr Leggett argued that Opec has been exaggerating statistics for almost 20 years now, and refers to Matt Simmons, a former energy advisor to the Bush government, who believes that Saudi is already past peak."
Oil: are we running out?
Investment and Business News, 16 January 2006

Jeremy Leggett - 'What they don't want you to know about the coming oil crisis'

"... 2005 will go down in history books as perhaps the poorest year for exploration success for both oil and gas since World War II. This dismal success was not for lack of effort. Record amounts of funds are being plowed into E&P [exploration and production] capital spending, which is why all the world's rigs are now in use...."
What a difference 20 years make in crude oil prices
World Oil Magazine, February 2006

'Twilight In The Desert'

US Department Of Energy Downgrades Forward OPEC Oil Production Forecast
By Enormous 11 Million Barrels Per Day

"The EIA projects OPEC production at 44 million barrels a day in 2025, about 11 million barrels less than had been predicted a year ago."
Gov't report: $50-plus oil here to stay
Associated Press, 12 December 2005

"The press headlines for this story — US Govt. slashes 2025 forecast for OPEC production by 11 million barrels per day — focus on the increased long term forecast for the price of oil (which many will regard as still too optimistic), but the real news is that the EIA has downgraded its long term forecast of production for 2025 from OPEC by 11 million bpd : ' OPEC production is now likely to be about 11 million barrels a day less than what the EIA projected in its 2005 report. ' (Associated Press). To put this in perspective, this is more than the whole of current Saudi production (9.5million per day). There is some reference in the report to 'lack of investment', but if this is the reason for the poor outlook, the report does not go on to explain why this might be the case in an environment of high oil prices. Some might say that OPEC wants to keep the oil price high; others that there is a shortage of manpower and equipment; others that OPEC knows the oil isn't there in the first place. Whichever it is, the outcome is the same: less oil available going forward than had previously been assumed. The net result is that global production/consumption between now and 2025 will not exceed 111 mbpd according to the EIA (a couple of years ago in its 2004 International Energy Outlook the EIA forecast a total global production capacity of 126 mbpd by 2025), although it also forecasts 118 by 2030 (compare this with Peak Oil 'pessimists' who tend to be in the range of 90 - 100 for maximum production somewhere between 2010 and 2020).... It seems the only way the forecasters can now deal with this situation is to trim their figures for future oil demand (which is what PFC said would be necessary back in September 2004).  EIA oil consumption growth forecasts therefore now seem to have been cut from 1.9% pa down to 1.4%. Basically this is a 'demand destruction' scenario driven by tightening supply/demand imbalances pushing up prices and in turn reducing consumption. Total global non-conventional oil production is shown by the EIA as increasing from 2.49 million barrels per day in 2004 to 9.25 in 2025, with most coming from 'Other North America' (presumably Canadian tar sands), Asia (China and India?), and South and Central America (presumably Venezuelan heavy oil).... Meanwhile somehow losing 11 million bpd of forward OPEC production doesn't seem to have made the front pages! "
Comments on revised US Govt forecast for OPEC
From The Wilderness Publications, 13 December 2005

"We will use Saudi Arabian oil for some time to come. But the goal is to recognize that at some point in time ... we will have to recognize that oil and natural gas, we will run out of it in the world. So we must make plans for it."
Sam Bodman, US Energy Secretary
Energy Secretary to OPEC: Reveal plans
Reuters, 12 November 2005

Canadian Bank
Global Conventional Oil Production Has Already Peaked

"Over 60% of the 3.6 million barrels of new oil production that will come on stream in 2006 will not support demand growth but simply offset the loss from depletion of existing fields such as the North Sea or the giant Burgan field in Kuwait (see pages 6-9). Net of depletion, conventional oil supply will continue to decline this year, just as it did last year. 2004, in hindsight, will prove to be a Hubbert curve peak, at least insofar as low-cost conventional crude is concerned..... Depletion, the other key determinant of effective supply, along with new field development, has received added attention with the news that Kuwait’s giant Burgan field, the second largest in the world, has started to run dry. Rising depletion levels mean in effect that oil firms these days must run faster just to stand still. Facing the loss of more than 2 million barrels per day of production every year, some two thirds of projected capacity growth over the next three years will go not for incremental consumption, but will simply replace falling output at tired, aging fields like Mexico’s Cantarell complex, the North Sea and now Burgan .... Assuming that consumption continues to increase at near a 2.5% trend rate, spurred by rapidly rising energy demand in countries like China and India, oil consumption will soon exceed projected global supply growth, requiring further price rationing to bring demand growth back in to line with the very modest supply growth we see lying ahead."
Monthly Indicators
CIBC World Markets, 9 January 2006

"The failure of the 50% increase in crude prices over the last year to cool demand has seen West Texas Intermediate jump back over US$60/bbl and slowly inch its way back to the US$70/bbl peak hit last summer. While the rise has seen oil companies rapidly ramping up exploration and development budgets, the supply picture for at least the rest of the decade is already in place, painted by lead times of five years or more between discovery and production. The 164 pending oil field and oil sands projects already at some stage of their development pretty well defines the upper limit of global production over the balance of the decade. Our analysis of the supply pipeline, suggests that not only will net supply increases to the global market be extremely limited over the next several years, but that on a net basis, all of the new supply will come from non-conventional sources such as deep-water and Canadian oil sands—a development that can only buttress fears of growing depletion of conventional resources. That concern is now being echoed by some of the world’s largest oil companies, firms that have historically scoffed at the very notion of depleting oil supplies. Today they are increasingly speaking of an unprecedented gap between supply and demand growth. For example, Exxon has recently concluded that more than half of the world’s hydrocarbon needs over the next 15 years has yet to be found... Not only is depletion significant, but it is also accelerating, forcing more and more reliance on non-conventional sources of supply such as Canada’s vast but largely undeveloped oil sands. While the resource has proven reserves that rival those of Saudi Arabia, they can only be extracted at three to four times the cost of conventional oil."
Monthly Indicators
CIBC World Markets, 9 January 2006

"Production from the oil sands will ramp up at a slower pace than deep-water wells, due to even larger capital spending requirements and other constraints, but should replace deep sea and conventional oil as the key factor driving production capacity growth by decade’s end. With 30 new oil sands developments on tap, representing close to 3 million added barrels of daily production, Alberta has more new capacity on the drawing boards than even oil super-heavyweight Saudi Arabia. Announced new oil sands projects will lift estimated daily Canadian oil and gas liquids production to 3.5 million bbl by 2008 and 4 million barrels by 2010, solidifying Canada’s role as a key player in energy markets."
Monthly Indicators
CIBC World Markets, 9 January 2006

Shell Chief Acknowledges Arrival Of Global Peak In Conventional Oil Production
And Turns To CO2 Intensive Alternatives

"On top of concerns about high oil prices now comes the fear that we have reached 'peak oil' and that global oil output will start to decline. Have we? If oil has peaked, do we face a future of growing energy shortages, rising prices and international conflict for supplies? No one should underestimate the energy challenge... My view is that 'easy' oil [i.e. conventional oil] has probably passed its peak. But there are other reserves that are still a long way from their peak. In unconventional oil and gas - resources that are harder to tap - there are plenty of reserves. The oil industry has to explore new frontiers, develop new hydrocarbon energy sources and integrate 'CO2 solutions'.... Other new hydrocarbon energy frontiers include heavy oils and where oil is contained in sand and shales, contaminated and tight gas and coal-bed methane. There is lots of coal, too, particularly in the US and China.... But they are more carbon-intensive and increase the urgency of finding ways of tackling carbon emissions...."
Jeroen van der Veer, CEO of Royal Dutch Shell
Financial Times, 24 January 2006

"Anecdotal evidence suggests Shell is not alone in struggling to find new sources of oil. Mr Van der Veer said: 'If you expect that the world should be supplied from traditional, on-shore, near-to-the-market oil and gas, then there are not sufficient supplies.' Shell reckons that [unconventional] oil sands and gas-to-liquids technology will fill the gap."
An exercise in futility at Shell
London Times, 3 February 2005

"The oil and gas industry must apply new technologies on unprecedented scale and pace to meet the world's expanding demand for fossil fuels, said Jeroen van der Veer, chief executive of Royal Dutch Shell PLC, at the Cambridge Energy Research Associates annual energy conference in Houston. With continued economic growth, the world's energy needs could increase by 100 million b/d of crude [equivalent] over the next 25 years— 'more than we added over the past quarter century,' ... Consumption of liquefied natural gas could double over the next decade, depending on 'technological as well as commercial innovation,' said Van der Veer.... Other large unconventional resources include heavy oil, oil sands and shales, 'contaminated' and tight gas, coalbed methane, and 'lots of coal, particularly in countries like the US and China,' he said. Royal Dutch Shell and other major oil companies are involved in developing those resources. ... Enhanced oil recovery techniques using heat, gas, or chemicals to increase the oil flow are costly, complex, and technically demanding but will be increasingly important, he said...  'That means applying advances on the scale necessary to make real progress,' Van der Veer said. 'It means learning from experience to use them increasingly effectively and quickly sharing that learning around the world. It means integrating many technologies because that's where the real benefits come in this complex business. It means applying those technologies in increasingly demanding projects — accessing more difficult resources and creating the complex chains needed to deliver the energy people need.'"
Shell CEO says technology needed to meet fuel demand
Oil and Gas Journal, 10 February 2006

"The U.S. Department of Energy is predicting crude oil from Alberta's oil sands - not alternative energy sources, such as biomass ethanol - will help halve the U.S.'s dependence on overseas oil within two decades. The assessment, in a report to be released later this month, follows U.S. President George W. Bush's challenge this week for the United States to sharply reduce oil imports from unstable nations in the Middle East. The U.S. Energy Information Administration estimates U.S. oil imports from Canada will almost double by 2025, from 1.6 million barrels a day to 2.7 million b/d. Most of that increased will come from Alberta's oil sands, which are expected to produce up to three million b/d by 2020. 'If [the United States] receives it all, which we don't have in our forecast, it could reduce even more our dependence on the Middle East,' an Energy Department official said. The U.S. predicts the surge in Canadian oil will be a major factor in slashing imports of Middle East oil from six million b/d now to three million. The news comes just days after Mr. Bush, in his annual State of the Union address, declared, 'America is addicted to oil.' The U.S. must move 'beyond a petroleum-based economy,' he said, and set a target of reducing 75% of oil imports from the Middle East by 2025. His prescription for reducing oil consumption included sharply increased use of bio-based fuel, solar energy, cleaner coal plants and nuclear power. But with many alternative fuels still years away from commercial viability, the White House and other U.S. lawmakers have been eying Canada's oil as they search for more secure and stable energy sources. ... Dick Cheney, the U.S. Vice-President, was due to visit Fort McMurray, the hub of Alberta's oil sands production, last September but postponed the trip because of Hurricane Katrina. Officials at the Canadian embassy in Washington say they are trying to reschedule the visit.... The U.S. awareness of Canadian oil supplies has jumped markedly within the last year, partly because of advocacy by officials at the Canadian embassy. The opening of the Alberta government's Washington office, headed by former provincial energy minister Murray Smith, has also had a major impact."
Energy relief in oil sands, not ethanol
National Post, 4 February 2006

"Canadian oil production could rise a hefty 10 percent this year as oil sands output climbs to meet surging U.S. demand for energy supplies from outside the Middle East, analysts said on Thursday. Such a jump, following a year when overall production slumped due to a long outage at a major oil sands plant, would be the largest annual increase in at least a decade, lifting volume to 2.7 million barrels a day.  With oil companies from Canada, the United States, France and China planning an estimated $100 billion in oil sands projects, few countries can match growth on that scale, said Steven Paget, analyst with FirstEnergy Capital Corp.   'Longer term, with the ability to grow production, there's only really one rival and that's Saudi Arabia,' Paget said. The Canadian Association of Petroleum Producers has forecast output will hit 3.9 million barrels a day in 2015. Canada's resources of tar-like bitumen in the oil sands rival the dominant OPEC member's conventional reserves in size, but are far more costly to develop.... conventional light oil output in Western Canada is expected to keep slipping at the rate of about 4 percent a year as the region keeps maturing, Wise said. In 2005, Canada's light crude production averaged 830,000 barrels a day, down from 868,000 in 2004, the NEB said."
Oil sands boom seen lifting Canadian output 10 pct
Reuters, 16 February 2006

"Canada's wild west is experiencing an oil boom, thanks to Alberta's ability to exploit its vast reserves of tar sands... The sands' open-pit mines could be cut from a science fiction movie. Craters 100 metres deep have been gouged into the boreal forest to create a barren moonscape, where spidery draglines furiously haul chunks of tar sands, and huge 400-ton Caterpillar 797 trucks, the largest in the world, rumble the earth with tires larger than a double-decker bus. Giant smoke-stacks billow steam, sulphur dioxide, nitrous oxide, and carbon dioxide, and are lit up at night to allow around-the-clock work. Bison roam nearby on reclaimed land, while cannons are fired over tailings ponds to frighten off migratory birds that might land in the toxic pools of sludge. These oil sand operations produce around one million barrels a day, projected to reach three million by 2015, and six million by 2030, according to the Canadian Association of Petroleum Producers.... The oil sands continue to be Canada's largest producer of greenhouse gases and threaten its Kyoto commitments, which have been cast into doubt with the election of a new federal government that has hinted it will scrap the Kyoto protocol."
The world's energy reserves: Where the buffalo roam...
Independent, 11 February 2006

"Oil major Chevron Corp. (CVX.N: Quote, Profile, Research) said on Thursday it is planning a major project in the oil sands region of northern Alberta that could produce more than 90,000 barrels a day by the middle of the next decade. The company said it recently acquired five oil sands leases in the Athabasca region, covering more than 180,000 acres (73,000 hectares), that could contain as much as 7.5 billion barrels of tar-like bitumen. A portion of that resource could be produced using thermal methods like steam-assisted gravity drainage, where steam is pumped into the ground to liquefy the heavy oil. James Bates, vice-president of operations and asset development at Chevron's Canadian unit, said the leases could support daily production of 90,000 barrels or more should the company proceed with the development. 'This is a strategic investment in a large resource base,' Bates said. 'It's very early ... but (the cost) is going to be in the billions, not the millions.' Bates said the company will begin assessing its newly acquired properties next year, with a drilling program that will determine where a project could be located. The project will be Chevron's second in Canada's oil sands region. It has a 20 percent stake in the Athabasca project, 60 percent owned and operated by Shell Canada Ltd."
Chevron plans Canadian oil sands project
Reuters, 2 March 2006

"U.S. Energy Secretary Samuel Bodman says future energy from the Alberta oilsands is a 'very important component' of the country's supply and he is hoping proximity will ensure most of it flows south.... 'We certainly are very anxious that the oilsands development be as swift as possible,' but such a 'gargantuan' undertaking is going to take time. 'We're certainly pleased at the prospect. We have a very good relationship with our energy colleagues in Canada and we're very anxious to see them expand as much as is reasonable given the constraints on people and personnel and facilities.'"
U.S. is eyeing Alberta oilsands as key part of supply, official says
CBC News, 2 March 2006

BBC TV report on oil sands - Click Here

The production processes for creating oil from tar sands produce three times the CO2 generated from conventional oil production
(see the 'Global Warming Ultra' section of  'Power Politics - The Worldwide Dash For Energy Resources' )

The Implications For Climate Change
Oil Sands And CO2 Generation

"A 67-page report released earlier this year on the subject of Peak Oil and sponsored by the U.S. Department of Energy drew several conclusions... [It stated that] 'In addition to needing a substitute for natural gas for processing oil sands, there are a number of other major challenges facing the expansion of Canadian oil sands production, including water and dilutent availability, financial capital, and environmental issues, such as SOX and NOX emissions, waste water cleanup, and brine, coke, and sulfur disposition. In addition, because Canada is a signatory to the Kyoto Protocol and because oil sands production results in significant CO2 emissions per barrel, there may be related constraints yet to be fully evaluated.”
US Govt Sponsored Peak Oil Report Draws Disturbing Conclusions
Resource Investor, 29 July 2005