Yesterday, our oil sands tour took us an hour south of Fort McMurray to ConocoPhillips' (COP) Surmont facility where we viewed the oil extraction process called steam assisted gravity drainage, or SAGD. The bitumen, or oil and sand mixture, is well below ground at this site. To give you an idea on how deep it's buried, you'd have to take an elevator 90 floors beneath the earth to get to it. The bitumen in its virgin state is very hard--like a chunk of honey. Our Canadian guides like to compare it to a hockey puck.

The SAGD process uses steam to soften the bitumen underground so that it can be extracted, processed and transported through a pipeline for further processing. Two parallel wells are drilled on each well pad: One for steam injection to heat the bitumen-rich sand, and another run... more »

Energy companies are reporting their quarterly financials this week, which is providing fodder for those who prefer to play politics rather than enact good policies. The typical line we hear from politicians is that company earnings are proof that a fair share is not being given to government, but focusing on just the bottom line obscures the true picture. Let's take one release as an example.

We see that ConocoPhillips reported first-quarter earnings of $3.0 billion or $2.09 per share. But a look at the full release shows that this $3.0 billion comes on total revenues of $58.25 billion - a 5.18% return. In other words, ConocoPhillips works hard for their money. We also see that ConocoPhillips paid $4.36 billion in taxes other than income taxes and paid or accrued $2.75 billion in income t... more »

Four major oil companies are joining forces to build and deploy a rapid-response containment system that will be available to capture and collect oil from future blowouts in the Gulf.

The new system will be suitable for use in depths of up to 10,000 feet--twice as deep as the Macondo well--and will have the capacity to contain 100,000 barrels of oil per day with expansion potential.

The four companies, which include Chevron, ConocoPhillips, ExxonMobil and Shell, have committed $1 billion to pay for the initial cost of the new system. They also will assemble a dedicated staff to maintain readiness under a new non-profit organization called the Marine Well Containment Company. Other companies will be invited to participate.

"[R]egardless of how unlikely it is that this situation will reoccu... more »

Today is Canada Day. On July 1, 1867, Canada became a self-governing country consisting of a federation of the four provinces of Nova Scotia, Ontario, Quebec and New Brunswick. Since this is a national holiday, Canadian citizens across the country are celebrating with parades, festivals and fireworks.

It's fitting that on this day we acknowledge Canada's contributions to America's energy security.

Our friendly neighbor to the north is the largest importer of crude oil to the United States. About 2.5 million barrels of oil arrive from Canada every day to fuel the U.S. economy, and about half of the oil is derived from Canada's oil sands.

With oil sands production expected to more than double in the next decade, pipeline companies and refiners are preparing to handle more of this secure res... more »

While the response to the Deepwater Horizon accident has focused on BP, it's not the only energy company that is working 24/7 to plug the leaks and manage the spill.

As Chris John, president of the Louisiana Mid-Continent Oil & Gas Association observed in the podcast below, many other companies have volunteered to send equipment and personnel to help in the response activities.

The National Ocean Industries Association (NOIA) recently compiled a list of companies that have offered to help with response effort. Many API members are included:

• Marathon - Two support vessels; deepwater drilling experts; and ROV hot stab equipment.

• Chevron - Chevron's Venice, La., base for spill response activities; personnel from its Pascagoula refinery to assist the Coast Guard's... more »