Pain at the pump....Canada has moved up to No. 2 in oil reserves

[SoCalDem]

http://www.pe.com/localnews/opinion/editorials/stories/PE_OpEd_Opinion_op_27_ed_oil.e465.html

Pain at the pump

10:39 PM PST on Friday, March 26, 2004



Afunny thing happened to the world's oil reserves recently. Canada, which had ranked last in reserves just in North America, quietly shot up the charts to No. 2 in the world, behind only Saudi Arabia. Next thing you know, Canada will be joining OPEC. What in the world's going on?

Just this: We're getting far enough toward the bottom of the barrel in world oil supplies that a lot of heavy, thick crude we've always ignored is starting to look pretty good. And yes, that does have real meaning in places like this, where motorists are starting to pay more than $2 a gallon for gasoline. It means this nation should be more actively researching alternative energy forms. We're going to need them.

Recently we noted that refinery capacity in California had shrunk, even as this state was adding cars and drivers. That was one large, overlooked factor behind the surge in gasoline prices here. The changing condition of world oil reserves hasn't been noticed much either. It stands to have dramatic, longer-term effects on our fuel prices.

This watershed reappraisal of useful reserves happened just last year. Canada's recoverable reserves soared by 3,600 percent, from 4.8 billion barrels to 180 billion barrels. That happened because Alberta province, north of Montana, is underlain by vast deposits of oil sands. This is what used to be called, more accurately, tar sands. It's dense, thick and impure. It's far removed from much-coveted Arabian light crude. It costs a lot to extract and move and refine. It's the stuff nobody wanted. Until now. Now, with promising new extraction techniques, oil sand is becoming economically viable. What's more, another low-grade resource, extra-heavy oil, is massively concentrated in Venezuela's Orinoco belt. The oil patch is moving back to the Western Hemisphere.


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