Energy Case Studies 2

What are oil sands?Thick slurry made up of sand, water and bitumen. They are refined by:1. Open cast mining followed by crushing the material for mixing with water to separate the bitumen.2. Pumping bitumen from the sand by injecting high pressure steam.

Why oil sands in Alberta?- Deposited across three locations: Athabasca, the Cold Lake and the Peace River.- Rising oil prices due to high demand so energy security must be ensured.- By 2030, oil exports from Alberta hope to exceed Nigeria and Venezuela - over 5 million barrels daily.

Players for:Large oil companies e.g. Exxon Mobil - economic gainCanadian Association of Petroleum Producers - say oil sands only produce 4% of GHG emissionsNorth America - increased energy security as the USA only have nuclear and coal (16% of demand for oil met by Canada by 2030)

Players against:Environmentalists - mining damages ecosystems, unbalances the water table and produces GHGsArctic National Wildlife Refuge in northern Alaska - 45 species threatenedLocals - NIMBY view due to disruption and aesthetics

Environmental impacts:- Biodiversity loss from mining due to removal of topsoil and habitat destruction.- 2-5 barrels of water needed for every barrel of oil = reduces water table.- Reclamation of land after mining is slow.- 100 million tonnes of CO2 produced from heating sands.

Economic impacts:- Open cast mining lowers bitumen costs- Oil must cost at least $30 per barrel to make profit- Infrastructure development needed for transporting natural gas needed to heat the sands- Canadian economy thrives on the oil exports

Social impacts:- Alternative source of oil to match demand if conventional sources ever become unavailable.- Oil sands can stand in while renewable technologies continue to develop.

Patterns of consumption:- Consumption is 6 times the world average per capita- In 2009, 20% of the world's energy supplies were consumed by the USA

Factors causing energy insecurity:- Middle Eastern terror threats threaten gas supplies- Imported fuel is heavily relied upon as indigenous sources don't provide enough energy- Oil 'shocks' of 1973 and 1979 saw US politicians try to reduce reliance on imports- Oil prices crashed in 1986, causing increased imports- Huge demand in 2008 caused oil prices to reach $150 per barrel- Peak oil expects price rises by 2015- Poor planning in private sector caused electricity shortages

Future options:- Exploit indigenous oil supplies as well as neighbouring supplies in Mexico and Canada- Exploit oil shale gas by horizontal drilling- Invest in alternative supplies e.g. renewables, biofuels- Further explore nuclear power- Conserve energy and increase efficiency

Misconceptions:- The West views the Middle East as very unstable and posts for Islamist terrorist attacks.- Iran and Afghanistan resent the West as western companies who initially exploited reserves paid little money to the owners of the oil.

The attack on Abaqaiq:In February 2006, the oil plant there was attacked by 2 vehicles carrying explosives. 2 terrorists and 2 guards were killed but the plant remained untouched despite the explosives going off.- First direct Al-Qaeda attack on the Saudi plant- Saudi Arabia is the only producer with excess capacity- Abqaiq is the largest oil producing plant (6.8m barrels a day)- A successful attack would have halved oil production for a year

USA and Saudi Arabia:The USA is dependent on Saudi for its oil supplies and Saudi needs the USA's military support. US troops left Saudi Arabia in 2003, leaving it vulnerable to terrorist attacks = Abaqaiq.

Iran: Production Hotspot- Very politically unstable- A strong anti-American government which America isolates itself from and focuses on other producers- Iran is beginning to forge relations with Russia and China where oil is the strategic resource- The USA has begun securing oil from pipelines through neighbouring countries e.g. Georgia, Turkey

Middle Eastern supplies:- 26% of Western Europe and 21% of the USA's oil is supplied by the Middle East- Saudi Arabia has the largest oil reserves in the world; Iran is number 3- Iran has 2nd most natural gas; Qatar is number 3

Impact of 9/11:America wanted to reduce dependence on the Middle East post 9/11 and encourage Russia to increase its production. However in 2003, American and allied forces invaded Iraq worried about Western oil supplies as Saddam Hussein was making deals with Russian and Chinese oil companies.

Biggest oil producer in Africa

Local people and environmentalists      Vs.       Foreign exploiters and the Nigerian government

Ogani people complain they haven't seen any of the money from 52 years of oil production

The government gets tax and royalties from companies like the Royal Dutch Shell, but the government is the majority shareholder so keeps the revenue - $1.6 trillion

Oil has been exploited by foreign engineers from Britain, Germany and Holland

Oil spills are a huge environmental problem - fish catches affected as well as cultivation sites

Locals have begun stealing oil to sell on for profit, but this act has seen 9 million barrels wasted

Sudan and South Sudan were very close to war over oil payments - South Sudan has agreed to pay Sudan over £5.70 per barrel to transport oil to its ports.

The dispute over oil prices to be paid by South Sudan resulted in South Sudan halting all oil production - Sudan received £1.9 billion in compensation.

Borders between the two nations are still disputed.

When South Sudan broke off from the North in 2011, it took 3/4 of Sudan's oil.

Oil Sands in Alberta, Canada

A high risk USA

Middle Eastern tensions

Nigeria

Sudan