Looking For A Bullshit Filter

[DonAndersen]

Folks,

 

I don't know about you but there seems to be a lot of bull flops laying around.

 

1) remember when you were told that the break even point for oil sands was $80 and the price is now $40. Now I know damned right well that if I was building 100,000 rods per day and lost $40 on each one, I'd be outta business.

2) alberta govt yaps about low oil prices is the issue - did they forget that most of the big bucks came from land sales. Oil sands pay little in royalty and conventional crude production has been falling for years.

3) keystone is going to get used by who - see #1. In fact, you just have to wonder if trans Canada is going to build it.

4) the US from what I read is going to be awash in oil and trans Canada is going to build a pipeline

5) what most people don't realize is oil sands product is lot closer to pavement than water. It takes specialized equipment to move it in pipelines & ships + at the arrival end, the refineries and tankage have also to be specialized. Further, Oil sand asphalt contains hydrogen sulphide - this is not sweet crude that gets top $ in the market place. Oil sand asphalt will always be discounted big time

 

And that is enough reality for now

 

 

Don

[Jayhad]

You may be right on some points there Don, plus green algae bio-oil production is getting major fianancial backing by the US government currently and we could see a shift towards it seeing it is percieved as much cleaner.

[Guest 420FLYFISHIN]

buy a fiat!

[Smitty]

I used to belong to REIN (real estate investment network) - a lot of smart people analyzing the real estate fundamentals and the fundamentals of the Alberta economy. The head of this group is about a no nonsense guy you could meet. Always telling you to "Look Behind The Curtain" (from Oz...)

 

Anyways, not once was I ever told or have I ever read the break-even point for the Oilsands was $80. Certainly not from credible sources.

 

Just sayin'...

 

Smitty

[Smitty]

Perhaps Don is looking for something like this:

 

[Guest 420FLYFISHIN]

i think there is an app for that!

[DonAndersen]

Smitty,

 

Break even is $80 -sale is &40.

 

Clear now!

 

And I really like the bs detector. Should we send CAPP, Govt & Global news a complementary detector?

 

 

Don

 

 

 

 

 

Don

[vhawk12]

Don, you have to specify what kind of extraction method is being used. Are you talking thermal, mining or what? Are you comparing apples to apples? What year was the break even poing for oilsands $80? Back in the 70s? Capital costs in 2006-2007 were at a high during the boom, since then, prices have dropped, efficiencies have increased due to advances in technology, particularily with SAGD development. The break-even point for SAGD is currently $55-$61 for SAGD from what I've seen. If you want to stir up the pot, then fine, but please at least reference your sources. Obviously don't believe a word CAPP says, so who do you believe? where do you get your numbers from in the first place?

 

You're right, pavement is closer than water, but water is the only way to get it to the Asian and Indian markets, and those are the guys who are actively investing in oilsands development right now. Today, Sinopec annnounced a 240,000 barrel per day refinery in Northern China, gotta get that resource over there somehow, and of course it's going to come at a cost, but if they don't need it, then they wouldn't be buying in. You want to keep the refining in Canada? That's a great idea, and that's what I'd like to see, but who in Canada has the resources to pay for it? The gov't? not likely Private enterprise? maybe, but they'd better get moving quick or they'll miss the boat.

[Smitty]

Crap Don, sorry. My bad. Oops.

 

See edit above; I meant to say $80: I have never once heard the break even point was $80. According to a least half a dozen to dozen sources that I have been exposed to, the majority of oil-sands operations have a break even point of $40-$47, some as high as $53. But not even close to $80.

Apologies for the reverse mix-up of numbers. (And my belief in this point / analysis still stands, please ignore my screw-up).

 

Smitty

[DonAndersen]

Good God,

 

I may have recalled incorrectly but I was positive that the $80 buck number was quoted in a tar sands discussion last year. It, again if I can recall correctly, was a justification for the $125+/bbl. selling price and how the profits weren't all that high.

 

As far as CAPP, they are representing their members interests and as such putting forth info to reflect their interests. As far as me believing CAPP, I worked for years to get some protection for fresh water in Alberta and some of the info put forth by CAPP has an interesting spin.

 

Do you know if the Chinese are outfitting the refinery to handle tar sands?

 

 

Regards,

 

Don

[vhawk12]

Don, only extremist environmental groups are still calling them tar sands. Maybe industry spin, but Oilsands seems to be adopted by most of the media, gov't and general public.

 

Anyway, my company has a report issued by MacQuarie Equities Research called the "In-situ"-ation report. I don't think I can distriubute it to you guys because it's property of the company. Anyway, although they may have a vested interest in promoting investment in Oilsands development, they also supposed to be responsible to their clients, meaning the data they report should be somewhat unbiased. I'd suggest you buy a copy (it's a 61 page report) and give it a good read, if anything it should be educational because there is a lot of explanation in there. I haven't had time to read the entire thing, but it seems like you have enough time on your hands to give it a thorough read.

[DonAndersen]

Vhawk,

 

Sorry about not being politically correct. I guess the 50 years it was called tar sands no longer fits the "new" reality.

 

I'll look for your report although as you rightly pointed out, it is designed to separate people from thier money. I expect that the information will be bang on.

 

And with that, I'm off to temper some bamboo. Gotta make a living.

 

Don

[FlyFishingEMT]

http://theintelhub.com/2013/01/17/scottish-engineers-synthesize-clean-fuel-using-just-air-and-water/

[vhawk12]

Vhawk,

 

Sorry about not being politically correct. I guess the 50 years it was called tar sands no longer fits the "new" reality.

 

I'll look for your report although as you rightly pointed out, it is designed to separate people from thier money. I expect that the information will be bang on.

 

And with that, I'm off to temper some bamboo. Gotta make a living.

 

Don

 

That's kind of my point Don, the Oilsands has changed drastically in the past 50 years...but a lot of people keep painting it with the same brush. How do you expect to every find the real truth in anything you hear? If an investment company separates people from their money and their clients are not seeing returns, then that firm goes under pretty quick, so I don't think that it can be slanted that bad. Do you trust the Pembina institute over CAPP? How do you know what to believe? I think you should get well versed in all aspects and find out where the numbers are most consistent.

[reevesr1]

http://theintelhub.com/2013/01/17/scottish-engineers-synthesize-clean-fuel-using-just-air-and-water/

Seemed like a reputable site. I particularly liked all the useful ads, the one about how to pull electricity freely from the air was especially enlightening. I was disappointed that I could not find an article on the latest advances in cold fusion, but maybe AlJazeera (the primary source of the above article) couldn't get a source. This is a quote from the article,maybe now one of my all time favorite quotes on a news site:

 

 

"When this issue began to get coverage on the news politicians and bureaucrats were horrified that they may no longer have an excuse to restrict the travel of their slaves.

Aljazeera interviewed one politician who insisted that he still needed to mettle in peoples lives about their travel even if they were using clean fuels."

 

In all honesty, I thought the site was like "The Onion", but I think they are serious.

[DonAndersen]

Vhawk,

 

 

My sentiments exactly.

What is the truth?

 

 

Don