Oil sands in Venezuela...

Venezuela has always had an abundance of oil. In fact, at one point in the early 2000s, gasoline sold for as little as 5 cents a litre. Venezuela, like Alberta has some of the world’s biggest deposits of oil sands. It’s been expensive to extract the thick bituminous oil because it requires a lot of money, natural resources (water, natural gas) and sophisticated refining methods which have high labour and technology costs. Using more water for the process pushes up the price of the resource making it financially inaccessible for locals.

The United States Geological Survey (USGS) recently reported that 513 billion barrels of oil are technically recoverable from the oil sand deposits. That’s ludicrous considering the oil capacity of Alberta, Saudi Arabia and Russia. All of this oil lies in the Orinoco oil belt which is estimated to be one of the world’s biggest oil reserves- substantially larger that Saudi Arabia’s 264 billion barrels of recoverable oil. The difference between Venezuela and Saudi Arabia is not necessarily the oil capacity but the oil itself. As mentioned, the oil sands are “unconventional” oil which require substantial foreign investment (because they are so lucrative) and more resources for production in general, whereas the Saudis and other Middle-Eastern states extract conventional oil which requires traditional production methods- much cheaper by comparison.

This recent discovery has many implications- driving up competition in the oil market, potentially bringing in foreign investment from the growing economies of China and India, and of course, producing even more greenhouse gas emissions from extraction and production methods, and subsequent consumption.

Key message: Hurray for geological innovation and discovery. We now have more oil to consume! Pollution and environmental degradation are the unfortunate result.