"Doing it Right In Alberta"

What is it with Alberta. It has the Edmonton Public School system that is the most effcient public school system in North America. And now I am reading this:

The headlines....................

http://news.yahoo.com/s/csm/20060512/wl_csm/obitumen

Newest hot spot for oil production: Canada

FORT MCMURRAY, ALBERTA - More expensive to process than the light crude oil of the Middle East, Alberta's oil sands have long remained a largely untapped resource. But with oil at $70 a barrel, it has become economically feasible to extract the thick, sticky bitumen that in former years was used to seal native people's canoes - not fuel a global economy.

Only Saudi Arabia, with 259 billion barrels, has larger oil reserves than the Florida-sized patch that surrounds this Canadian outpost. And a pipeline already exists to carry the oil to a key market: the United States.

Over the next five years, oil companies from Exxon Mobil to France's Total are expected to invest C$60 billion in oil sands. Earlier this week, Shell Canada announced a takeover of Canadian oil-sands producer BlackRock Ventures, valued at $2.4 billion Canadian ($2.17 billion).

Production in Alberta is up 61 percent over the past four years. This year, Alberta's oil sands are expected to produce 1.2 million barrels a day, roughly equal to the production of Texas.

"The oil sands ... represent a turning point in the history of energy, and a switch to synthetic [chemically processed] sources of oil," says Peter Tertzakian, chief energy economist at the Calgary-based energy consultancy ARC Financial.

Industry experts say new technology could greatly increase output, providing a significant source of secure oil for the United States. Just last month, a pipeline built to carry oil north from the Gulf of Mexico to Midwest refineries, reversed direction to take Alberta oil south.

"We can double our production and go for another 45 years," says Jim Carter, president of Syncrude Canada Ltd., the world's largest oil sands operator. "There is relatively new technology that could expand production, but there is still a lot to be mined by surface methods."

Huge swaths of the boreal forest cover Alberta's deposits, concentrated in three locations: Peace River to the west of Fort McMurray; Cold Lake to the southeast, on the Saskatchewan border; and - by far the largest - the Athabasca region surrounding Fort McMurray, the town at the center of oil sands production.

Syncrude - a joint venture of seven firms - estimates that those deposits contain 175 billion recoverable barrels of oil.

Optimists such as the Alberta Energy and Utilities Board say the reserves could be 10 times that if new technology succeeds in separating the oil from the sand in hard-to-reach underground deposits.

Syncrude and other companies, from Shell to Suncor, are stripping away the top layer of the earth to get at the bitumen that contains oil. They use giant shovels that scoop up 80 to 90 tons at a time, dropping the earth into the giant yellow Caterpillar 797B, the largest truck in the world. It is as tall as a two-story house and its tires cost $60,000 each. It never leaves the property; its weight would wreck the local roads.

Each 400-ton load will produce 200 barrels of oil once it's been put through the crusher. Other sites in Alberta use more complex methods of getting at the bitumen that is too deep to mine. High-temperature steam is pumped down into the oil sands deposits to liquefy the bitumen, which is then pumped to the surface.

However it's extracted, all bitumen has to be transformed into oil in a process called upgrading. There are several different steps in upgrading, all of them using a lot of energy, usually natural gas. It costs $23 to $26 a barrel - depending on the project - to produce light oil from sticky goo of the oil sands.

With oil at current prices, the shares of firms such as Canadian Natural Resources and Suncor have been soaring on the Toronto Stock Exchange. Some investment analysts warn there could be problems for the oil-sands operators, since their costs - natural gas to "cook" the bitumen during the refining process and diesel fuel to run their equipment - are rising.

Environmental concerns

Environmentalists, meanwhile, are concerned about the effects of oil-sands production, though oil sands firms say they will return it to pristine condition in the long run.

"With projections that oil-sands production will grow from 1 million to more than 5 million barrels per day over the next 25 years, the air, land, and water of Alberta's northeastern boreal forest is at risk of severe environmental degradation," said the Pembina Institute, an Alberta-based environmental organization, in a statement on its website.

The giant smokestacks at the refineries send black smoke into the air that stretches for miles in the clear blue sky above the forest.

"The proposed tar-sands developments will tear a hole in Canada's lungs - our vital boreal forest ecosystem," said Lindsay Telfer of Canada's Sierra Club.

And a native group that lives just north of the project has said it isn't safe to fish in the Athabasca River, due to pollution from not just the oil sands but also paper mills.

No gold-rush exodus ... yet

But the oil-sands operators and local government leaders are focused on another problem: labor shortages.

"Our biggest problem is finding housing for the people who are coming here," says Melissa Blake, mayor of Fort McMurray.

On average, 100 people a week arrive in this town of 61,000 looking for work.

There is also a transient population of as many as 12,000 that commutes to work from other parts of Canada, staying in rented space for weeks on end.

Workers are so hard to come by that unskilled people in fast-food restaurants are paid C$14 ($12.70) an hour, double the minimum wage.

The Fort McKay Group, run by a Indian tribe, pays trained cooks in its catering service as much as C$40 ($36.30) an hour.

The average cost of a small house - 1,200 square feet - in Fort McMurray is C$418,000 ($380,000), more expensive than most big cities.

Rents for small apartments can be C$1,000 ($900) a month.

"The price of oil drives growth in Fort McMurray. And at these prices we expect our [permanent] population to grow to 100,000 by 2012," says Mayor Blake.

Now flashback to October 7th 2000 .............................

Research promises $5/barrel oil

New method called ecologically superior, more productive than drilling

By Jon E. Dougherty© 2000 WorldNetDaily.com

A research team says it has developed a new technology for the oil industry that would lower crude-oil prices to just $5 a barrel, dramatically decrease the cost of gasoline and oil-related products and break the hold the Organization of Petroleum Exporting Countries has over U.S. oil supplies.

"OPEC needs to be told the game is over," said Larry Elgin, chairman of U.S. Defense America Victory, a group that promotes technologies that strengthen national defense.

Oil rig off Texas in the Gulf of Mexico. Advocates of new "separation" technology say the U.S. should become more energy independent for national security reasons.

The group is also headed by Adm. Thomas Moorer, former chairman of the Joint Chiefs of Staff -- the highest-ranking military position in the U.S. -- and Gen. Gordon Sumner, formerly chairman of the Inter-American Defense Board and ambassador-at-large in Central American affairs at the State Department.

By Elgin's reckoning, the new production method, called "Master Separation Technology," would be one way the U.S. could enhance its national security by becoming less reliant on foreign oil producers and, possibly, less victimized by enemies seeking to cripple national security and the U.S. economy by cutting off U.S. oil imports.

The technology -- which actually has been under development for about 25 years, according to Elgin -- is similar to one already used extensively in a Canadian oil field to extract oil that could not be pumped out by other methods. However, he added, "this new method will replace the old one," as it is more efficient and less costly.

"Master Separation Technology" makes drilling for oil obsolete, Elgin said. The process works by breaking the electro-bond between oil and sand. After extracting oil, the sand is returned in pristine condition. "In fact, you can plant a crop in the same soil the next day," Elgin said, "so there are no environmental concerns with this method."

At the Athabasca site in northern Alberta, Canada, the new technology has been tested and declared effective. Elgin said in North America alone there "is enough oil in the first thousand feet of just our abandoned wells in Canada and the United States to supply the entirety of the continent for 400 years."

Such supplies -- and the technology to access them -- would "reduce domestic reliance on foreign oil suppliers like OPEC and give us the ability to cut gas prices dramatically."

Using the new technology, Elgin said, oil companies could reopen previously closed wells in the U.S. and across North America and extract the 70 percent of oil still in the sand and ore left in those wells by conventional oil drilling and pumping methods. Such an increase in domestic supply -- without having to find actual new oil wells -- would greatly decrease U.S. reliance on overseas sources as well as domestic supplies.

"This technology would come online very gradually," Sumner told WorldNetDaily, "and I think our current suppliers -- especially Saudi Arabia -- would adjust to it."

When asked if the new technology would harm U.S. relations with OPEC in general, Sumner said the goal was to decrease American reliance on foreign oil suppliers, not necessarily to cut relations with them altogether.

"The ultimate goal is to try to make us less dependent on foreign oil, and this [process] would certainly help," he said.

Adm. Moorer was out of town and could not be reached for comment.

'Not invented here'?

Most major oil companies have opposed the new technology, said Elgin, because of "their substantial investment in old oil drilling technologies" and because "the big oil companies don't have this technology."

"They've adopted a 'not invented here' mentality," Elgin said, claiming some major oil corporations have tried to reverse-engineer the technology -- without success -- and have also tried to steal it.

Jeannie Miller, a public relations spokeswoman at Exxon, said her company was familiar with the technology. "I think we're even working on it," she told WorldNetDaily, but would not comment further.

Though it would seem the major oil companies -- because they would presumably obtain far greater production from existing wells -- would be the most interested in seeing such new technology come to market, Elgin said those corporations consider the master separation process to be "disruptive technology."

Such technologies "are those having trouble coming to market because existing inferior technologies that are in place don't want to be displaced," he said.

What his group wants to do is promote other such "disruptive technologies" that would ultimately enhance national security -- and help bring them to market. The group's oil-production technology is just the first such innovation being pushed.

Regarding the current debate within both major party presidential campaigns over energy policy, Elgin said the separation technology is vital to both U.S. domestic economic and national security because it would virtually eliminate what he views as the "stranglehold" foreign oil suppliers have over U.S. consumers and politicians.

"Lawmakers said back in 1973 that they would never let the U.S. be held hostage by OPEC or other foreign oil producers again," he said. "But here we are -- in 2000 -- again having our energy demands being held for ransom."

Elgin said the technology has been used in similar forms to solve "once-unsolvable" industrial waste problems, "so it is proven and it works."

Specifically, the separation technology has been used to clean up industrial waste from factories and also the toxic residue from AFFF foams used by the military to cushion runways for planes that have to make emergency landings or landings without landing gear.

The company that owns the new production method is Kenterprise Research, founded by technology developer James Keene, who was unavailable for comment.

Elgin says that since major oil firms have put up roadblocks to the process of bringing separation technology to market, his group and Kenterprise are prepared to work with "the hundreds of independent oil companies throughout North America to offer them a franchise deal and let them use the process" in their operations.

"Kenterprise would continue to control the technology, but these independents could franchise it, duplicate it and bypass the major players in bringing more oil to domestic markets," he said, noting that the quality of oil extracted by the separation technology is "very good" and "very close" to the quality of oil pumped by the old methods.

The major oil companies "have traditionally been aligned with OPEC in keeping these sorts of technologies off the market," Elgin said. "This notion that people have that if you build a better mousetrap big companies will just jump right in and help you develop it is not very realistic."

But "the independents [oil firms] are different," he said. "In essence, this will be set up like the Hughes tool bit. In order to control the technology, Keene's company will precisely control the technology, but with franchise groups of independent oil firms and others who are not presently in the oil business to use the technology in areas where there are formations of oil ore. We hope [the plan] can be quickly implemented so as to make [the U.S.] oil-independent," he added.

The oil formations targeted by the new technology, Elgin said, are not productive by traditional methods, but contain a huge reserve of oil that can be accessed using the separation method.

The reason the price of a barrel of oil would be so dramatically reduced, Elgin said, is in the reduction of overhead that the separation method would foster.

"Everything is greatly simplified" under the new technology, he said. "What we're doing is so much cheaper. When you have to drill down hundreds of feet out in the middle of the ocean, with all the manpower, equipment and transport costs, it is expensive."

Elgin said the revelation about Kenterprise's new oil extraction technology could also have political ramifications.

The technology "would be most important in what are considered to be 'battleground states' in this year's presidential election -- Pennsylvania, Ohio, Michigan, Wisconsin -- the areas known as the old oil patch, so to speak."

Old wells in these states that have long since been abandoned because conventional oil drilling could no longer produce sufficient amounts of crude to remain active. But with the new technology -- "and our knowledge that up to 70 percent of the oil in these wells is still in the ground" -- Elgin said companies could reopen them and make them productive again.

"You can go back and get all of this oil -- 99.9 percent of it -- and then you can simply grow back whatever's growing there because the process returns no toxic waste, just soil," he said.

Elgin said the new technology would be used in Canada first "because there are no environmental laws to rewrite and we're welcome there." But, he noted, "there is a pipeline right there in northern Alberta, where some of this technology has been tested, that we could get the oil to market just as cheaply and efficiently as we've promised."

Once the technology is in place in Canada, Elgin said, the U.S. would be next. "The system is already in use in Canada -- they have written the laws for it, they are used to it. It only makes sense to start there," he said.

Today, Elgin will attend a seminar to describe the new technology at Monrovia, Calif., at a United Republicans of California meeting to be held at the Four Points Barcello Hotel. The meeting begins at 9 a.m. local time. Elgin will speak at 1 p.m. on the topic,

"The Chinese Oil Noose."

Former state Sen. Don Rogers, an independent oilman, will moderate the event.

The $5.00 per barrel oil headline never came to be, but the increase in production should be noted. As should be the current costs to produce the oil.

In 2004, Conoco Phillips increased production in West Sak and as such, they should see a tax reduction in this field to increase production.