|
Heading to top rung Research firm predicts Alberta oil sands will be largest single source of US oil imports this year; could surpass one-third by 2030 Gary Park For Petroleum News
The Alberta oil sands alone are on track to become the largest single source of United States crude oil imports, says a report prepared by the Massachusetts-based Cambridge Energy Research Associates, better known as IHS CERA.
That fact alone “emphasizes the importance they have attained as a supply source for the United States,” said Daniel Yergin, chairman of IHS CERA, which advises energy companies, governments and other agencies.
“This ranking demonstrates the impact of investment and innovation over the last decade. It also shows how integrated Canada and the United States are in terms of energy, as well as their overall economies,” he said.
The report said that 2010 will mark the first time that output from the oil sands will account for the largest share of U.S. imports of petroleum and refined products and predicted Alberta bitumen will reach 20 percent to 36 percent by 2030.
In 2000, the U.S. imported 1.5 million barrels per day of oil from Saudi Arabia, which represented 17 percent of the imports. By 2009, Canadian supplies of 1.9 million bpd made up 21 percent of U.S. imports, while Saudi Arabia had slipped to 1.1 million bpd or 12 percent.
Over the past decade, IHS CERA said oil sands production has more than doubled to 1.35 million bpd, more than offsetting the decline in conventional crude volumes and could build to 3.1 million to 5.7 million bpd by 2030.
Some other supplies shrinking Faced with shrinking supplies of medium and heavy crudes from Mexico and Venezuela and increasing coking capacity that will tighten markets for at least the next five years, U.S. refiners will increasingly turn to Canadian bitumen as a secure source of supply, the analysis said.
It said U.S. coking capacity is expected to grow by more than 300,000 bpd between 2009 and 2013, putting pressure on the operators to find more heavy-medium crudes.
Even if the U.S. does not regain its 2005 peak as the world’s largest oil consuming market, it will remain in top spot over the next two decades, IHS CERA said.
Because Canadian bitumen is heavier than most other crudes supplied to the U.S., it could offer feedstock flexibility to refiners, the report said.
When blended with conventional crudes, the resulting bitumen mix “fits” well into refinery configuration for conventional heavy crudes.
The volumes of produced transportation fuels maintain and in many cases increase, while diesel volumes are often boosted.
Jobs beyond Alberta IHS CERA said the oil sands also represent billions of dollars in spending, with economic benefits that extend far beyond the borders of Alberta, creating jobs in the U.S. and Canada.
“The growth of oil sands production in the past decade is a testament to Canada’s open investment climate,” said the consulting firm’s director Jackie Forrest.
“The oil sands are among a group of oil development opportunities that are accessible to oil companies — projects in which firms can openly and securely invest.”
But the report noted the resource also faces a challenge from high development costs, although many of the world’s largest other sources of supply carry costs in the same range as the oil sands.
The report estimated oil sands in-situ projects need oil prices of just over US$60 per barrel to generate a 10 percent return on investment — more than what is needed under the existing agreement for Brazil’s ultra-deep offshore play, but comparable to Arctic shelf costs.
It said that a threshold price of US$70 per barrel for the average oil sands mining project would be less than the outlay required for the U.S. Gulf of Mexico, Russian onshore and the new production-sharing proposal for Brazil’s offshore.
IHS CERA said government environmental regulation of the oil sands is already highly developed and is as strong as many other oil-producing regions of the world, although continued growth will require advances in water management practices and the pace and scale of managing the handling of waste products in tailings ponds.
The firm said comparisons of average “wells-to-wheels” greenhouse gas emissions from the oil sands compared with crude oil processed in the U.S. — estimated to be 5 percent to 15 percent higher — can be misleading, arguing that emissions can be higher, lower, or on a par.
| 