Modelling the costs of non-conventional oil: A case study of Canadian bitumen

  • Méjean A
  • Hope C
  • 53

    Readers

    Mendeley users who have this article in their library.
  • 18

    Citations

    Citations of this article.

Abstract

High crude oil prices, uncertainties about the consequences of climate change and the eventual decline of conventional oil production raise the issue of alternative fuels, such as non-conventional oil and biofuels. This paper describes a simple probabilistic model of the costs of non-conventional oil, including the role of learning-by-doing in driving down costs. This forward-looking analysis quantifies the effects of both learning and production constraints on the costs of supplying bitumen, which can then be upgraded into synthetic crude oil, a substitute to conventional oil. The results show large uncertainties in the future costs of supplying bitumen from Canadian oil sands deposits, with a 90% confidence interval of $7-12 in 2030, and $6-15 in 2060 (2005 US$). The influence of each parameter on the supply costs is examined, with the minimum supply cost, the learning rate (LR), and the depletion curve exponent having the largest influence. Over time, the influence of the LR on the supply costs decreases, while the influence of the depletion curve exponent increases. © 2008 Elsevier Ltd. All rights reserved.

Author-supplied keywords

  • Experience curve
  • Non-conventional oil
  • Uncertainty

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document

Authors

  • Aurélie Méjean

  • Chris Hope

Cite this document

Choose a citation style from the tabs below

Save time finding and organizing research with Mendeley

Sign up for free