Carbolic Smokeball posted:

They say that the reason that SAGD has exploded in the last 10-15 years is because high oil prices finally made it viable, especially for small/medium side players. Diluted bitumen is a much lower value product than synthetic crude oil when compared to West Texas Intermediate, which is the benchmark that we compare SCO to. Of course, the low price producers get for dilbit is offset by the savings achieved by not constructing and operating an upgrader. There are lots of small sites in the area that are only SAGD, and sell their bitumen to sites with upgraders that aren't being run at full capacity. So as conventional oil pumpjacks and platforms run dry over the next several decades, and demand for oil increases as predicted, as will the price, making unconventional methods of extraction economically viable as what happened with SAGD.

It's only speculation that oil may hit $150 or more. At this point it's anybody's guess. Different economists have different view points and many of them are viable realities. Some say we'll never see oil over $100 again. When I said $150-200, I had in mind a few articles I've read recently warning about the danger of not properly investing in new projects today. It's anybody's guess what will happen, but with my limited expertise on the economics of oil prices, I say it's highly unlikely that we WON'T see oil back over $100 in the next few years.

I don't know too much about fracking, so some of what I say may be wrong or only partially correct.

Fracking is a relatively small industry in Alberta, and most of it takes place in the southern portion of the province. It's similar to SAGD in that horizontal wells are drilled deep underground in order to access the oil and in that the plant footprint is very small, but the method of extraction is different as they're accessing different kinds of oil. Shale oil is come from rocks embedded with kerogen, whereas as the oil sands is literally sand that has been saturated with oil. SAGD is a slow, constant process. Steam is continually added over the lifespan of the well, and changes in injection temperature and pressure occur slowly as the well depletes to maintain consistent yields, whereas fracking is done by pressuring a liquid to several thousands of PSI to fracture the shale and release the oil and gas. I could be wrong, but as far as I know, the cost per barrel is lower in fracking, but the wells yields drop substantially after fracking begins. SAGD is more consistent over its lifespan.

Fracking is controversial because of the potential impact the act of fracking has on the environment. It is largely believed fracking contaminates ground water and can trigger earthquakes. There is some worry that caprock in SAGD operations may fracture and cause oil to seep into groundwater sources, but most controversy to do with SAGD is as a part of overall oil sands development. Carbon intensive, uses lots of water (although most water is recovered and reused), waste byproducts, etc.