Myth vs. Fact: Oil Sands is Tar Sands

MYTH: It’s tar sands, not oil sands.

FACT: The oil sands are a mixture of inorganic matter, silt, clay, water and viscous oil called bitumen. Tar, in contrast, is a modified pitch produced primarily from wood and roots. They serve completely different purposes and therefore deserve different names.


Comments

  1. Erniwati says:

    Thanks for reading. Since when? Well, I would say the ienlufnce is growing. If you look at Stats Can data on tangible wealth, you will see that oil sands reserves currently comprise about 18-20% of wealth in canada, because of the embedded resource rents. That will grow as oil prices increase and technology improves.Yes, it is absolutely possible that innovations will make oil sands irrelevant, but that is far from being the case today, in particular for liquid transportation fuels. Right now, the cost of generating electricity from solar power is in the 40c/kWh range, while wind is more competitive at 11 ish cents depending on the location. By comparison, the oilsands produce a barrel of oil, which is 1700 kWh of power, for about $30, or about 3c/kWh. Further, while much has been made of the subsidies to oil sands, you must keep in mind that these make up a small portion of the total taxes paid, directly and indirectly, from oilsands, which rank in the hundreds of billions of dollars per year. Renewable energy, by contrast, remains economically irrelevant in most cases unless there is a net flow from government to the producers. That will change, but there will never be significant rent in renewables because there is limited natural comparative advantage.Lastly, there is nothing that prevents us from competing in both renewable and non-renewable fuels, but we should look at what the investment in renewables will truly get us and compare that to other opportunities. I believe there is a significant role for improved renewable energy technology in Canada, and certainly hope to see that sector emerge. However, given the current rate of subsidies required, the industry is not self-sustaining, and needs another economic engine to keep it going. Andrew

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  1. […] The energy source in question is actually called “oil sands” – not “tar sands.” The oil sands are a mixture of inorganic matter, silt, clay, water and […]

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