The sands of Canada: Oil supply salvation or sinkhole?

In vast strip mines north of this Alberta boomtown, shovel machines bigger than five-story buildings rip out tar-soaked sand, dumping 400-ton loads in trucks that feed the voracious U.S. appetite for oil. Factories in Canada's "oil sands," site of the world's largest single oil deposit, use super-heated water to purify the rich black glop. Much of the petroleum is piped to U.S. refineries, making Canada -- not Saudi Arabia or Venezuela -- America's top oil supplier. A century and a half into the petroleum age, oil companies have depleted many accessible, politically friendly reserves. Rising energy prices might be expected to encourage investment in solar, wind and other alternatives, and to some extent they do. Yet if the $200 billion poured into the oil sands so far is any indication, bigger money will flow worldwide to ever more expensive fossil fuels. The good news is that unconventional oil resources are enormous. The world could run for decades on Alberta bitumen, Venezuelan extra-heavy crude, Utah oil sands, Western oil shales and petroleum made from coal or natural gas. The bad news is that all those methods are considerably more expensive than traditional oil drilling, and the reserves are often located in environmentally sensitive areas...more