Newest hot spot for oil production: Canada
Last month, a Texas-Illinois pipeline built to bring oil north reversed direction to take Alberta oil south.
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Each 400-ton load will produce 200 barrels of oil once it's been put through the crusher. Other sites in Alberta use more complex methods of getting at the bitumen that is too deep to mine. High-temperature steam is pumped down into the oil sands deposits to liquefy the bitumen, which is then pumped to the surface.Skip to next paragraph
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However it's extracted, all bitumen has to be transformed into oil in a process called upgrading. There are several different steps in upgrading, all of them using a lot of energy, usually natural gas. Itcosts $23 to $26 a barrel - depending on the project - to produce light oil from sticky goo of the oil sands.
With oil at current prices, the shares of firms such as Canadian Natural Resources and Suncor have been soaring on the Toronto Stock Exchange. Some investment analysts warn there could be problems for the oil-sands operators, since their costs - natural gas to "cook" the bitumen during the refining process and diesel fuel to run their equipment - are rising.
Environmentalists, meanwhile, are concerned about the effects of oil-sands production, though oil sands firms say they will return it to pristine condition in the long run.
"With projections that oil-sands production will grow from 1 million to more than 5 million barrels per day over the next 25 years, the air, land, and water of Alberta's northeastern boreal forest is at risk of severe environmental degradation," said the Pembina Institute, an Alberta-based environmental organization, in a statement on its website.
The giant smokestacks at the refineries send black smoke into the air that stretches for miles in the clear blue sky above the forest.
"The proposed tar-sands developments will tear a hole in Canada's lungs - our vital boreal forest ecosystem," said Lindsay Telfer of Canada's Sierra Club.
And a native group that lives just north of the project has said it isn't safe to fish in the Athabasca River, due to pollution from not just the oil sands but also paper mills.
But the oil-sands operators and local government leaders are focused on another problem: labor shortages.
"Our biggest problem is finding housing for the people who are coming here," says Melissa Blake, mayor of Fort McMurray.
On average, 100 people a week arrive in this town of 61,000 looking for work.
There is also a transient population of as many as 12,000 that commutes to work from other parts of Canada, staying in rented space for weeks on end.
Workers are so hard to come by that unskilled people in fast-food restaurants are paid C$14 ($12.70) an hour, double the minimum wage.
The Fort McKay Group, run by a Indian tribe, pays trained cooks in its catering service as much as C$40 ($36.30) an hour.
The average cost of a small house - 1,200 square feet - in Fort McMurray is C$418,000 ($380,000), more expensive than most big cities.
Rents for small apartments can be C$1,000 ($900) a month.
"The price of oil drives growth in Fort McMurray. And at these prices we expect our [permanent] population to grow to 100,000 by 2012," says Mayor Blake.