Jacobs Engineering Group Inc. (JEC) has received a contract from Suncor Energy to provide project management, engineering and procurement services to complete the scoping study and Design Basis Memorandum (DBM) for tailings and water transfer projects. These projects are a portion of the Tailings Reduction Operations (TRO) implementation at Suncor's oil sands mining, extraction and upgrading facility located 30 kilometers north of Fort McMurray, Alberta, Canada. Officials have not disclosed the contract value.  TRO is Suncor's new initiative to implement a Mature Fine Tailings (MFT) drying process, which results in the dry material to be reclaimed in place or moved to another location for final reclamation. The process helps achieve a dryer landscape in a shorter period of time and allows for accelerated reclamation timelines, shrinking the environmental footprint of oil sands mining operations.  With annual revenues exceeding $12 billion, Jacobs is one of the world's ...

Wersquo;ve all heard a lot about the Canadian oil sands and how a modern-day oil boom is taking place in the forests of northern Alberta. This is oil that begins not with holes drilled deep underground, but rather as aromatic clay and sand clawed out of the ground by giant backhoes and hauled in huge dump trucks to nearby refineries. The oil sands in the Fort McMurray region give Canada the second-largest reserves in the world after Saudi Arabia -- some estimate that more than 170 billion barrels could be recovered with existing technology. Itrsquo;s may be hard to picture this process. A series of photos from National Geographic provide a good look at the oil sands and the positive and negative impacts of their development. The size of and demand for the resource ensure that the oil sands will be developed on a large scale. For Canada, the challenge is to strike that ...

Wersquo;ve all heard a lot about the Canadian oil sands and how a modern-day oil boom is taking place in the forests of northern Alberta. This is oil that begins not with holes drilled deep underground, but rather as aromatic clay and sand clawed out of the ground by giant backhoes and hauled in huge dump trucks to nearby refineries. The oil sands in the Fort McMurray region give Canada the second-largest reserves in the world after Saudi Arabia -- some estimate that more than 170 billion barrels could be recovered with existing technology. Itrsquo;s may be hard to picture this process. A series of photos from National Geographic provide a good look at the oil sands and the positive and negative impacts of their development. The size of and demand for the resource ensure that the oil sands will be developed on a large scale. For Canada, the challenge is to strike that ...

Recently, I had the unique opportunity to tour two different oil sands operations near Fort McMurray, in northern Alberta. I saw a massive open-pit oil sands mine, and the associated reclamation effort, operated by Syncrude Canada Ltd. I also visited an in situ oil sands recovery project called Surmont, operated by ConocoPhillips (NYSE:COP).

The trip was sponsored by the American Petroleum Institute (API), which paid for the airfare and accommodations. Managers at both Syncrude and ConocoPhillips granted me access to any parts of their operations I wanted to see (within allowances for safety). And everyone answered any and all questions I asked.

Post-trip, I have complete editorial freedom to write about what I saw and learned. And I learned a lot. So this is Part I of a two-part series. Watch for Part II.

The Past and Future of Oil and Oil Sands

The first thing that struck me about visiting

...

A couple of weeks ago I was in Fort McMurray, Alberta.  I was visiting two large oil sands operations, courtesy of Conoco Phillips (NYSE:COP), Syncrude Canada and the American Petroleum Institute, which sponsored the trip.  I’ve been all over the place, but never to a working oil sands operation.  This was a first for me, and quite an eye-opener.

What Are These Oil Sands?

Back in Pleistocene time, the glaciers covered much of northern Alberta.  In places, there was a mile of ice.  During some of the warmer periods, there was a lot of melting.  On occasion, and in some places, there were giant, glacial-dammed lakes.

Every now and again, these glacial dams would break, sending massive volumes of water downstream, wiping away pretty much everything along the way.  Well, it turns out that in this scoured-out area that included much of the rock covering some lower Cretaceous deposits of

...

I had the unique opportunity to tour two different oil sands operations near Fort McMurray, in northern Alberta. I saw a massive open-pit oil sands mine, and the associated reclamation effort, operated by Syncrude Canada Ltd. I also visited an in situ oil sands recovery project called Surmont, operated by ConocoPhillips (NYSE:COP).

When we think about the concept of ’Peak Oil’ today, we need to keep in mind what we’re talking about. The curves show oil output peaking in so many parts of the world. This phenomenon is quite real, as long as you understand that it’s the light, sweet, easy-flowing oil that is getting harder and harder to find, certainly in significant quantity.

But there are a lot of other hydrocarbon molecules out there. Most of those molecules are not light, sweet crude oil. Indeed, most of the hydrocarbon molecules that the world will use in the future will be

...

Government budget hits all-time insanity… record monthly, year-to-date deficits… “Cash for clunkers” helps GM, but not economy… July retail sales stage surprise fall… Fed plans exit strategy, ends bond buys… why the FOMC is still not helping you… Byron King’s crude reality: How Canada could be the next Saudi Arabia…

It’s official: Our government ran a record $180.7 billion over budget in July, the Treasury Department said today. That’s just a bit over Wall Street expectations and just under the Congressional Budget Office estimate we reported Monday. Thus the government tab so far this fiscal year is a record $1.27 trillion, not the record $1.3 trillion the CBO guessed earlier this week. Phew… what a relief.

A few more scary details:

The budget deficit is still on track to exceed $1.8 trillion by October, the end of the fiscal year. That would be four times last year’s record budget July spending rose to over ...

Fluor Corp. (FLR) said on Tuesday that it has bagged a contract from Canada's Imperial Oil Ltd. (IMO) for the Kearl oil sands project. The Texas-based company expects to book about $1.5 billion from the contract this year, and a major portion will be recognized in the second quarter. "This significant project award expands our presence in the upstream side of the Canadian oil sands business, a key growth market for our company," said senior group president for energy & chemicals, power and government David Seaton. The engineering, procurement and construction (EPC) contract awarded to Fluor relates to the first phase of the project, which is likely to commence production in late 2012. The C$8 billion (about $6.9 billion) Kearl project is a surface mining and bitumen extraction operation located 70 kilometers northeast of Fort McMurray, Alberta. The company, which posted revenues of ...

With oil finally trading back above the $50-a-barrel level, it’s time to recognize that crude prices are probably not going to remain low for very long, and may end up fluctuating in the $50-$80 range - regardless of what happens to the prices of other commodities. After all, the economies in both China and India are apparently continuing to grow at a fairly rapid pace, and those countries’ demand for transportation and other forms of energy are thus likely to keep pace. For some minerals, the period of high prices from 2005 to 2008 has produced a surplus. But no such effect has been seen in the oil market, as large new discoveries are hard to find. If we’ve learned anything in the last few years, it’s that political risk is very important in oil investments. It’s not just a question of outright ...