Ex-Rep Foley's contradiction.

[Ex-FB]

Didn't they just open that massive Tarzan oil field?

Tar Sands?

I agree about the cost of producing oil from the Tar Sands, but it should be born in mind that modern techniques have drastically reduced the cost needed to seperate the oil out. There is still a cut off point where it ceases to be profitable (as with all products). Our current production costs for the Tar Sands are about $10 a barrel. Now, that is just the cost for the manpower, machinery etc. to get it out of the ground. On top of this there is transportation costs, which for the US are cheap (because there are a number of pipelines running South), but for Canada to ship it overseas it starts to really add on to the price.

So, although it is more expensive to produce than middle eastern oil, there is still plenty of profit to be made.

At present Alberta is looking at quadrupling its production levels over the next 5 to 10 years (some $20 billion odd in new plants being built at present). Of course, to make this worthwhile there needs to be a market for it, at present they obviously see that market as the US. But the middle east isn't daft. If the US stops buying their oil, then they may be forced to drop the price of the oil to continue to generate the current profits that they are enjoying. If they do that, then it will force the price of the Canadian oil down. Will it every dip back below the proft level of $10+transport?, I don't know, but either way it will probably drive the price of oil downwards.

We are constantly reducing the cost of the extraction, and each time we do that we make more and more of the reserves recoverable. Usually when a countries reserves are posted, only the recoverable amount of oil is announced, which at present is some 300 billion barrels. But there is over another trillion barrels in the Tar Sands that aren't reported, because they are not recoverable with current methods. As methods improve, the size of the reported reserves increase. as long as the price stays high, the incentive to get at that extra trillion barrles will remain high.

[Suzzi]

Tar Sands?

Ah - that might be it. But they name other places after biblical figures, why not name one after Tarzan....?