Thread by @politicalham

1/A thread about the #Alberta #oilsands

Oil sands production forecast to grow 500,000 b/d by 2030

Did you know oil sands producers break evens are between $30 and $40 per barrel? That's a very profitable barrel at today's prices.
@KevinBirn @SPGlobal

2/Bitumen is now a competitive barrel. It can compete when prices fall.

2 important characteristics of the oil sands:
- very low decline rates over 30 to 50 years (unlike shale)
- low sustaining capital needed (also unlike shale)
#OOTT #energytwitter

3/Bitumen/ultra heavy crude competes in the 10.5 million b/d market, not the light sweet crude market.

Mexico ending 600,000 b/d heavy Maya exports to US Gulf Coast is huge for Alberta.

Already tight market likely to get much tighter.

4/Alberta exports about 3 million b/d of heavy crude to American 5.5 million b/d heavy market.

Assuming peak oil demand in 2030, the US heavy market can shrink for a long time before AB loses share.

5/But it is reasonable to think that the heavy market will shrink. And possibly disappear before 2050.

It's also reasonable to ask, is bitumen for gasoline, diesel the highest value use for the resource?

My answer: not even close.

6/@ABInnovates' estimate is that if bitumen sells to a refinery for $30/b, making carbon fibre raises that value to $213/b.

Albertans own the resource. Why would they support such a poor return from their capital?

7/Can we make carbon fibre from bitumen?

This scientist says a commercial process should be ready by 2024.

8/In this @AlbertaViewsMag article, I interview Alex Walk of Zoltek, a big US carbon fibre manufacturer.

His co. will set up a CF plant in Alberta if bitumen can be turned into a plentiful, cost-effective precursor.

Markets? Electric vehicles.
albertaviews.ca/albertas-carbo…

9/Making materials from bitumen instead of fuel is clearly the most rational revenue generating use of the resource.

But, there are two impediments to making the transition:
- HUGE emissions from production (11% of CDN total)
- Environmental liabilities (37 tailings ponds)

10/The oil sands are incredibly complex, huge industrial operations. Lowering emissions is neither easy nor cheap.

That said, CEOs have been dragging their feet for years and still aren't investing enough $$ to get the job done.

11/CEOs have also been dragging their feet on tailings ponds (1.3 trillion litres of toxic fluid).

Producers are nowhere near a solution for reclaiming those ponds.

12/Here's a strategy that could maximize long-term returns for Alberta:
- transition bitumen to materials mfging by 2050 or earlier
- net-zero by 2040
- properly fund environmental liabilities
- invest in adding value to materials mfged in AB

13/The strategy outlined in tweet #12 could extend the oil sands' life well past 2100.

Or, AB could go with the producers' fuel-based strategy that likely sees major decline by 2050.

Remember, the companies don't own the resource, the people do.
energi.media/markham-on-ene…

14/So, why do we look to the oil sands CEOs for leadership?

They are lessors of the resource, not the owners.

The owners, Albertans, need a voice in this conversation. The UCP will never provide it.

Alberta conservatives are lapdogs of the industry.

15/If you want to share this thread elsewhere:
threadreaderapp.com/thread/1558827…