Unconventional oil will be abundant but more costly



International Energy Agency : Economist, engineer
Unconventional oil is set to play an increasingly important role in world oil supply through to 2035, regardless of what governments do to curb demand.
In the New Policies Scenario, output rises from 2.3 mb/d in 2009 to 9.5 mb/d in 2035. Canadian oil sands and Venezuelan extra‐heavy oil dominate the mix, but coal‐to‐liquids, gas‐to‐liquids and, to a lesser extent, oil shales also make a growing contribution in the second half of the Outlook period. Unconventional oil resources are thought to be huge — several times larger than conventional oil resources. The rate at which they will be exploited will be determined by economic and environmental considerations, including the costs of mitigating their environmental impact. Unconventional sources of oil are among the more expensive available: they require large upfront capital investment, which is typically paid back over long periods. Consequently, they play a key role in setting future oil prices. The production of unconventional oil generally emits more greenhouse gases per barrel than that of most types of conventional oil, but, on a well‐to‐wheels basis, the difference is much less, as most emissions occur at the point of use. In the case of Canadian oil sands, well‐to‐wheels CO2 emissions are typically between 5% and 15% higher than for conventional crude oils. Mitigation measures will be needed to reduce emissions from unconventional oil production, including more efficient extraction technologies, carbon capture and storage and, with coal‐to‐liquids plants, the addition of biomass to the coal feedstock. Improved water and land management, though not unique to unconventional sources, will also be required to make the development of these resources and technologies more acceptable.


WEO 2010