Oil Sands Truth: Shut Down the Tar Sands

September 27, 1962: Tar Sand Project Approval Starts New Era For Canadian Oil

September 27, 1962
Tar Sand Project Approval Starts New Era For Canadian Oil

BY: CARL O. NICKLE, Publisher of the Daily Oil Bulletin & Oil In Canada

In recommending approval of the application of GREAT CANADIAN OIL SANDS LIMITED for the first commercialscale development of Alberta's famed Athabaska Tar Sands, the Alberta Oil & Gas Conservation Board has made a vital and far reaching decision.

The Decision: the time has come to fit the huge Tar Sands reserve, on a small scale, into the petroleum supply pattern. Despite the fact that Alberta and other Western Canadian reserves of conventional petroleum. recovered from drilled oilwells, will continue to expand for many years yet, the overall hunger for petroleum products will grow even faster.

It would be four years 1966 before the initial Tar Sands project could go on stream. It would provide up to 31,500 barrels of synthetic petroleum" per day a volume less than one year's increase in daily consumption of petroleum in Canada. In other words, when the G. C. O. S. project goes on full stream, it will absorb a market somewhat less than one quarter of the total increase in Canadian consumption that will occur prior to that event.

The Conservation Board does not consider the impact of G. C. O. S. proposal on the market for conventionally produced Alberta crude oil, on the allocation factor, and on the ratio of actual production to productive capacity, sufficient to have any serious detrimental affect on the conventional crude oil industry.

"All things considered," says the Board, "the impact of the proposed production of oil from oil sands on the conventional crude oil producing industry is within the range which would be in the public interest. "

The Board's forecasts for Alberta alone (and not taking into account other productive areas of Western Canada) show that Alberta virgin reserves of oil will approximate some 7.3 Billion Barrels by 1970, at which time remaining proved reserves will total 4.1 Billion barrels, productive capacity 1,240,000 barrels per day, and demand for Alberta crude oil will reach some 703,000 barrels per day.

In the absence of oil sand production, the ratio of production to productive capacity in Alberta is expected to increase slowly from its present 48% to 50% in 1966 and thereafter at an increasing rate to some 69% by 1975. The effect of 31,500 barrels daily of Tar Sand oil on this ratio would be to decrease it to about 47% in 1966 and 66% in 1975.

The life index (total Alberta remaining proved reserves, divided by annual production) is currently some 22 years, is expected to fall to about 19 years by 1966, and thereafter to decline to some 12 years by 1975. Effect of the proposed Tar Sand production would be to increase life index for conventional crude oil from 19 to 21 years in 1966, and from 12 to 13 years in 1975. (The United States has a current life index in oil of 13 years, a level that has changed by only a fraction of a year during the past decade, since expanding production has kept pace with enlarging reserves).

The Alberta Conservation Board believes "it would not be in the public interest for the life index (in Alberta) to fall to or below the level of 12 to 13 years which is predicted by the Board for 1975. " This means that some supplement to conventional crude oil production appears desirable before 1975 and perhaps not later than 1970". Hence, the first approval of a Tar Sands project, designed to bring limited volumes of this production into the stream of Canadian oil in another four years.


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