Supplying synthetic crude oil from Canadian oil sands: A comparative study of the costs and CO2 emissions of mining and in-situ recovery
High crude oil prices and the eventual decline of conventional oil production raise the issue of alternative fuels such as non-conventional oil. The paper describes a simple probabilistic model of the costs of synthetic crude oil produced from Canadian oil sands. Synthetic crude oil is obtained by upgrading bitumen that is first produced through mining or in-situ recovery techniques. This forward-looking analysis quantifies the effects of learning and production constraints on the costs of supplying synthetic crude oil. The sensitivity analysis shows that before 2035, the most influential parameters are the learning parameter in the case of in-situ bitumen and the depletion parameter in the case of mined bitumen. After 2035, depletion dominates in both cases. The results show that the social cost of CO2 has a large impact on the total costs of synthetic crude oil, in particular in the case of synthetic crude oil from in-situ bitumen, due to the carbon intensity of the recovery techniques: taking into account the social cost of CO2 adds more than half to the cost of producing synthetic crude oil from mined bitumen in 2050 (mean value), while the cost of producing synthetic crude oil from in-situ bitumen more than doubles.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rath-Nagel, St. & Voss, A., 1981. "Energy models for planning and policy assessment," European Journal of Operational Research, Elsevier, vol. 8(2), pages 99-114, October.
- Chakravorty, Ujjayant & Roumasset, James, 1990. "Competitive oil prices and scarcity rents when the extraction cost function is convex," Resources and Energy, Elsevier, vol. 12(4), pages 311-320, December.
- Roumasset, J. & Isaak, D. & Fesharaki, F., 1983. "Oil prices without OPEC : A walk on the supply-side," Energy Economics, Elsevier, vol. 5(3), pages 164-170, July.
- Kahouli-Brahmi, Sondes, 2008. "Technological learning in energy-environment-economy modelling: A survey," Energy Policy, Elsevier, vol. 36(1), pages 138-162, January.
- Junius, Karsten, 1997. "Economies of scale: A survey of the empirical literature," Kiel Working Papers 813, Kiel Institute for the World Economy.
- Soderbergh, Bengt & Robelius, Fredrik & Aleklett, Kjell, 2007. "A crash programme scenario for the Canadian oil sands industry," Energy Policy, Elsevier, vol. 35(3), pages 1931-1947, March.
- Grubb, Michael, 2001. "Who's afraid of atmospheric stabilisation? Making the link between energy resources and climate change," Energy Policy, Elsevier, vol. 29(11), pages 837-845, September.
- Marvin B. Lieberman, 1984. "The Learning Curve and Pricing in the Chemical Processing Industries," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 213-228, Summer.
- Méjean, A. & Hope, C., 2008.
"Modelling the costs of non-conventional oil: A case study of Canadian bitumen,"
Cambridge Working Papers in Economics
0810, Faculty of Economics, University of Cambridge.
- Méjean, Aurélie & Hope, Chris, 2008. "Modelling the costs of non-conventional oil: A case study of Canadian bitumen," Energy Policy, Elsevier, vol. 36(11), pages 4205-4216, November.
- Toman, Michael & Krautkraemer, Jeffrey, 2003. "Fundamental Economics of Depletable Energy Supply," Discussion Papers dp-03-01, Resources For the Future.
- McDonald, Alan & Schrattenholzer, Leo, 2001. "Learning rates for energy technologies," Energy Policy, Elsevier, vol. 29(4), pages 255-261, March.
- Greene, David L. & Hopson, Janet L. & Li, Jia, 2006. "Have we run out of oil yet? Oil peaking analysis from an optimist's perspective," Energy Policy, Elsevier, vol. 34(5), pages 515-531, March.
- Grubler, Arnulf & Nakicenovic, Nebojsa & Victor, David G., 1999. "Dynamics of energy technologies and global change," Energy Policy, Elsevier, vol. 27(5), pages 247-280, May.
- Bloemhof-Ruwaard, Jacqueline M. & van Beek, Paul & Hordijk, Leen & Van Wassenhove, Luk N., 1995. "Interactions between operational research and environmental management," European Journal of Operational Research, Elsevier, vol. 85(2), pages 229-243, September.
- Mohr, S.H. & Evans, G.M., 2010. "Long term prediction of unconventional oil production," Energy Policy, Elsevier, vol. 38(1), pages 265-276, January.
When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:60:y:2013:i:c:p:27-40. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.