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July 13, 2006
Oil Sands Projects Stall
According to Jon Harding of the Financial Post, some of the projects that are slated for Alberta's tar sands are being delayed. There is a major shortage of tradespeople, material, and accommodation in Alberta so the capital costs of new developments is soaring.Another, more interesting development is that tar sands producers are declining to produce upgraders that transform gluey bitumen into high quality light crude oil. Both Imperial Oil and Husky Energy are taking a pass on upgraders for their new mines. Normally upgraders use natural gas to add hydrogen to bitumen in order to make it lighter. However, there is a concern regarding the long-term availability of natural gas in Alberta. Some companies, such as Suncor, remove carbon through catalytic cracking rather than hydrogenation.
Companies without their own upgrader will generally have to dilute their bitumen with a solvent such as toluene and pipeline it to refineries in Edmonton.
Posted by dymaxion at July 13, 2006 06:54 PM