Massachusetts Institute of Technology. Engineering Systems Division
Abstract
In recent years, there has been increasing focus on the economic and other benefits of the development of “unconventional” sources of oil—resources that cannot be produced using traditional production techniques—partly due to the increased scarcity of conventional oil reserves. This paper compares and contrasts unconventional oil resources in Canada and Argentina. Canada has deposits of bitumen known as oil sands/tar sands. Bitumen is “a thick, sticky form of crude oil that is so heavy and viscous that it will not flow unless it is heated or diluted with lighter hydrocarbons” (Government of Alberta 2009), and when mixed with sand and clay, is known as the oil sands. In Argentina there are shale oil formations, which is crude oil found in low-permeability rock formations. The unconventional hydrocarbons in Canada (the oil sands) and Argentina (shale oil) are significant resources for both countries, especially when compared with their conventional reserves. Though the institutional structure is different in both countries—Canada’s oil and gas and transportation companies are privately-owned, whereas in Argentina, they are partially government owned—the rhetoric of the discussions seems to be similar in both countries: many are in favor of development due to the significance of the economic benefits. However, in both countries, the development of transport infrastructure has been hindered by different factors, on environmental grounds, notably with regard to concerns regarding greenhouse gas emissions (in Canada) and lacking sufficient planning capabilities and institutional framework for long-term investments such as railroads (in Argentina)
