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Please understand that I am not an investment advisor, registered or otherwise. I may mention particular companies in one regard or another but that does not constitute a recommendation that anyone buy or sell the securities of such a company. I may buy or sell securities that I write about either before or after I post comments on said securities. You should do your own research before making any investment decision. If you chose to invest in ways similar to my own decisions and if such investments result in losses, you are wholly responsible, not me. Also, be sure that you take personal credit if your investments are successful.



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Canadian Oil Sands: Water is the Key to Success

An extensive research report published in the Globe and Mail discusses the importance of water to extracting oil from the oil sands.  A key assertion is this: ” The degree of water use directly reflects the quality of ore recovered, says Bruce Peachey, president of New Paradigm Engineering in Edmonton. “We are presently mining the best ores. But as clay content increases, the volume of water needed in production will increase. So this is the good time for water.”

Water may well be a limiting factor in the growth of oil sands production.  I’ve always thought that the government will limit its growth well below what the optimists are predicting.  That will be a great advantage for incumbent producers over the speculative, land-rich companies that are not yet in production.

Click here for the full report

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This entry was posted on Tuesday, April 8th, 2008 at 8:40 pm and is filed under Canada (oil sands), Canadian Oil Sands Trust (COSWF), PetroBank (PBEGF or TSO: PBG), oil supply. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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3 responses so far ↓

  • 1 Paul // Apr 9, 2008 at 3:42 am

    Jim, do you post the stocks of your portfolio?

  • 2 Mark L. // Apr 18, 2008 at 2:53 pm

    Jim,
    Thank you for posting this report regarding the water issues surrounding the Oil Sands. I read the complete report and have a number of concerns for the oil sands stocks. There are a number of environmental issues which could really put a damper on the growth of these stocks. I own SU and COS.UN and for the last 3 months they do not seem to be keeping pace with some of my other oil stocks such as DVN and CHK. Also, I owned PBG for a time and I bailed when it lost steam (it might be that it was just overvalued compared to the other Oil Sand plays). I still think that COS.UN will be a great play for the long term but have some concerns. Would you mind shedding some light. Thanks again for one of the best sites out there!!!! It has really opened my eyes to the peak oil theories and my investment strategies.
    Mark

  • 3 jkingsdale // Apr 18, 2008 at 6:50 pm

    Mark, I have no inside knowledge of this particular issue beyond what is posted here. As I said, if water is a limiting factor in growth, it will benefit incumbents with substantial capacity already on line such as COS.UN. Will water conservation requirements eventually cause the incumbents to cut back their oil production? Possibly. But I suspect when such a problem occurs the price of oil will be multiples of the present price, along with the price of the stocks. Jim

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