So I’ll just provide a link Steve H sent. Tech Central Station is promoting oil from tar sands as an example of the magic ability of the market to turn not-oil into oil. They actually don’t have anything new to report, they simply write up Canada’s success at producing oil this way, and give numbers on the total amount of technically recoverable oil on from tar sands on earth. (They say it is enough for 400 years, which sounds right.)
What don’t they mention?
1. How high the price of oil has to stay for all of this tar sand oil to be economically recoverable. If oil prices have to stay high, then the peak oilers remain correct: the end of cheap oil is over.
2. The environmental cost of using tar sands, including the strip mining of the sands and the carbon released into the atmosphere.
3. The energy return on oil sands. Here is Stuart Staniford on the topic .
One measure of this is the EROEI - the energy return on energy invested - how much energy you have to put in to to extract and make usable a resource versus how much you get out. In the early years of conventional oil, EROEI was often over 50. These days it's probably in the low teens (10-12). EROEI on LQHCs [Low quality hydrocarbons, like tar sands] tends to be around 3.
I do not know what these factors imply. They may mean that the transition to oil from tar sands will be painful to the world’s economy and the environment. They may mean that tar sands can never be a major energy source. They may mean nothing. They are, however, the factors that were ignored by Tech Central Station.
Stuart Staniford at The Oil Drum has an analysis that looks more in depth. Maybe I’ll have time to read it some day.