i've never heard of this before..but it was a pretty interesting read. source>> http://www.cbsnews.com/stories/2006/01/20/60minutes/main1225184.shtml CBS) Theres an oil boom going on right now. Not in Saudi Arabia or Kuwait or any of those places, but 600 miles north of Montana. In Alberta, Canada, in a town called Fort McMurray where, this time of year, the temperature sometimes zooms up to zero. The oilmen up there arent digging holes in the sand and hoping for a spout. Theyre digging up dirt dirt that is saturated with oil. Theyre called oil sands, and if youve never heard of them then youre in for a big surprise because the reserves are so vast in the province of Alberta that they will help solve Americas energy needs for the next century. Within a few years, the oil sands are likely to become more important to the United States than all the oil that comes to us from Saudi Arabia. Correspondent Bob Simon reports. -------------------------------------------------------------------------------- Twenty-four hours a day, 365 days a year, vehicles that look like prehistoric beasts move across an arctic wasteland, extracting the oil sands. There is so much to scoop, so much money to be made. There are 175 billion barrels of proven oil reserves here. Thats second to Saudi Arabias 260 billion but its only what companies can get with todays technology. The estimate of how many more barrels of oil are buried deeper underground is staggering. "We know theres much, much more there. The total estimates could be two trillion or even higher," says Clive Mather, Shell's Canada chief. "This is a very, very big resource." Very big? Thats eight times the amount of reserves in Saudi Arabia. The oil sands are buried under forests in Alberta that are the size of Florida. The oil here doesnt come gushing out of the sand the way it does in the Middle East. The oil is in the sand. It has to be dug up and processed. Rick George, the Colorado-born CEO of Suncor Energy, took 60 Minutes into his strip mine for a tour. He says the mine will be in operation for about 25 years. The oil sands look like a very rich, pliable kind of topsoil. Why doesnt oil come out when squeezed? "Well, because its not warm enough. If you add this to hot water youll start the separation process and youll see the oil come to the top of the water and youll see sand drop to the bottom," George says. It may look like topsoil but all it grows is money. It didnt always. The oil sands have been in the ground for millions of years, but for decades, prospectors lost millions of dollars trying to squeeze the oil out of the sand. It simply cost too much. T. Boone Pickens, a legendary Texas oil tycoon, was working Albertas traditional oil rigs back in the '60s and remembers how he and his colleagues thought mining for oil sands was a joke. "Here we are sitting there having a drink after work and somebody said this isnt going to, it isnt possible. Itll all have to be subsidized to a level, said, before theyd make money youd have to have $5 oil," Pickens says laughing. "We never thought it would happen." But then $40 a barrel happened and the oil sands not only made sense, they made billions for the people digging them. But it wasnt just the price of oil that changed the landscape, it was the toys. Thats what they call the giant trucks and shovels that roam the mines. Everything about the oil industry has always been big. Its characterized by bigness, from the pumps to the personalities. But up here in Alberta, its frankly ridiculous. The mine operates the world's biggest truck. Its three stories high and costs $5 million. It carries a load of 400 tons of oil sands, which means, at todays oil prices, each load is worth $10,000 dollars. What its like to drive one of these monsters? At the foot of a tire, we asked the driver, Jim Locke. "You have 14 steps going up, and at my house you have 14 steps to the bedroom. So its like going upstairs in my house, sitting on my bed and driving the house downtown," says Locke. But getting downtown is just the beginning. The oil sands then go into a plant. Theyre heated in a cell, which separates the oil from the sand. The result looks like something out of Willy Wonkas chocolate factory. This oil froth is then sent to an upgrader and eventually to a refinery. Asked if the processed oil is as good as that pumped in Saudi Arabia, Mather says, "Absolutely as good as. In fact, it even trades as a, at a premium because its high quality crude oil." The capital of the oil sands frenzy is a frontier town called Fort McMurray, which isnt in the middle of nowhere. Its north of nowhere and colder than the Klondike, but a boomtown just the same. The local hockey team is called the "Oil Barons." Theyre on a winning streak. Is this comparable to a gold rush? "I think its bigger than a gold rush. Were expecting $100 billion over the next 10 years to be invested in this area $100 billion in a population that, currently, is 70,000 people," says Brian Jean, who represents the region in Canadas parliament. Pickens is one of those investors. He runs a hedge fund in Dallas and is now a true believer. "Were managing $5 billion here. And, about 10 percent of it is in the oil sands. So, its the largest single investment we have," Pickens says. And if oil sands are the answer for investors, does Pickens think the oil sands are the answer for the United States? "Oh, I think so," he says. Most of those lumbering trucks are on their way to the gas tanks of America. A million barrels a day are now coming out of the oil sands and oil production is expected to triple within a decade. It wont replace Middle Eastern oil but at that point it will be the single largest source of foreign oil for the United States, even bigger than Saudi Arabia, which sends a million and a half barrels a day to America. Greg Stringham, who works for the Canadian Association of Petroleum Producers, says surprisingly, that Washington has only been paying attention for the "last couple of years." Stringham often lobbies for the oil sands in Washington. He says that in Alberta you dont have to look for the oil sands the earth moves. "When it comes to exploration in the oil sands, you cant drill a dry hole. Its there," he says. "We know where it is. Theyve outlined it. You dont have any risk. But other conventional sectors around the world, theres a huge exploration risk." The exploration risks are the least of it. Much of the worlds crude is in the Middle East where the instability is deeper than the oil. When Albertas blue-eyed sheiks took to Wall Street last summer in their Stetsons to drum up support for the oil sands, their message seemed to be, "If you cant trust Alberta, who can you trust?" "Alberta is a very good place to do business. Its a very stable environment," says Mather. The bonus for Canadians, aside from the treasure, is the notion that Americans might have to start treating them with a little less condescension. "With their oil, I think were going to need them a lot more than they need us," says Pickens. "We may appear in Canada to be a mouse compared to the elephant down south in terms of diplomacy or politics. But in terms of resources, we are mighty equals," says Mather. There have been grumblings out of Ottawa that Canada should consider using the oil sands as leverage in its serious trade disputes with the United States. Does Brian Jean think America is taking Canada for granted on the oil sands? "Absolutely. And I think most people, most Canadians believe that," he says. And the Canadians have alternatives. The Chinese, for example, are just dying to get a piece of the sandbox. "Ive been contacted personally by Chinese delegates that want to get into the plant sites here and want to see and want to invest," says Jean. Asked what he thinks about the Chinese interest in the oil sands up in Alberta, Pickens says, "At first I thought they were tire kickers. But I think theyre serious buyers." And the millions of Chinese who have moved from their bicycles to traffic jams are driving up the demand for oil. Its virtually insatiable and the Canadians want to step up production quickly. Whats holding them back is labor the shortage of it. Brian Jean says another 100,000 people are needed in Fort McMurray. Thats why one oil company has built a runway to fly workers daily from civilization to Fort McMurray. But why would anyone want to come work in a place where temperatures plummet to 40 below and the sun sets shortly after it rises in the long winter? Well, perhaps because the oil companies pay some of the highest salaries in North America. Take Josh Lichti, who says he could be making $120,000 by the time he is 22. "Its amazing," he says. But even if workers come flocking, the oil companies still have other problems. Creating energy from oil sands requires so much energy that the oil companies wind up spiking greenhouse gas emissions. "And they do it in volumes that exceed any other production of oil crude anywhere on the planet," says Elizabeth May, the director of the Sierra Club of Canada. She takes issue not only with what the oil sands are doing to the atmosphere, but to the land. The oil companies, environmentalists say, are digging up an entire province. Take a helicopter ride over the mines and youll think youre flying over the moon after a moonquake. "One of the reasons they can be mined the way theyve been mined is the out of sight, out of mind aspect of it. And your film crew is one of the few thats gone in there to look at how devastating this is," May says. Even money men like Pickens have noticed. "Cant argue with it. I mean, theres no question that, that theyve got a mess up there. But I do think theyll take care of it over time," he says. The oil companies say they will reduce greenhouse gasses and they point out they are required by Canadian law to refill old mines and plant new trees, and that is happening slowly. One company, Syncrude, has even introduced bison to land that once was a barren pit. Rick George of Suncor Energy insists in the future people wont recognize the mines. "So what you see today is a mine. What youll see 10 years from now is a replanted forest," he says. "Youre telling me that if I come here, its gonna be pretty?" Simon asks. "Absolutely," George says. "These sites will all be going back. Now well be minin at a different location at that point. "This will look forested when we get done with it in 20 years time." But there is a larger question that not only environmentalists are asking: will the availability of an enormous supply of secure oil right next door mean America will have little incentive to reduce its dependence on oil? "What Canadas doing," says May, "is continuing to feed the U.S. addiction to fossil fuels, instead of being the kinda friend who says, 'Lets make a helpful intervention here.' We're acting as the supplier of a drug fix to the U.S., while all the time saying, 'Just say no.' But we keep selling it." But unless the Chinese go back to bicycles and Americans trash their SUVs, there will be buyers for oil anywhere, no matter how its found or mined. Right now, Canada has become the land of opportunity for oilmen. They will tell you there is little else on the horizon. "Bob, if you take a tablet and put on it where is supply gonna come from that we dont know about today. And you put down all the optimistic points, that tablet will basically be blank," says Pickens. As blank as the landscape around Fort McMurray, where the world of oil exploration ends. Does Pickens think the days of cheap oil are gone? "Theyre gone," he says. "From what we knew as cheap oil, when I pumped gasoline in Ray Smiths Sinclair station on Hinkley Street in Holdenvale, Oklahoma, 11 cents a gallon, thats gone." Will we ever again see $1.50 a gallon? "We wont ever see $1.50 a gallon. No, thats gone," says Pickens. Right around the corner from Fort McMurray you can still see oil being produced the traditional way. Its picturesque now. The wells are still pumping but they belong to the past, like the iron horse that once rode across these prairies. The future? Up here in Alberta theyre convinced its in the dirt.