The Secret of the Dump-Truck Tires
Everyone chuckled. Beside our tour bus was a pile of used dump-truck tires. Each one was the size of a garage door and as thick as a car.
“Anyone who wants one can have one,” repeated our tour guide, with a smile. “As long as you take it away.”
I toured Syncrude’s property in Fort McMurray last month. Syncrude is the largest oil company in Athabasca. It’s really a syndicate of eight oil companies, all joined together in one massive venture to mine the oil sands in a big way.
It turns out, you can’t do much with an old dump-truck tire.
Syncrude uses a few of them to line the roadways in its mine; farmers use a few of them as cattle feedlots. Some get used in playgrounds. The rest – some 600 tires annually – pile up on Syncrude’s property, where tourists can gawk at them.
Syncrude uses the dump trucks to mine the oil sands. These dump trucks are the biggest in the world. They carry 400 tons of oil sand to the top of a mine. A monument overlooks one of the mines. It’s a dump-truck tire with a plaque from the Michelin Tire Company underneath. The plaque says, “This is the largest truck tire ever made.”
Since Syncrude started using dump trucks in the mid-1990s, its crude oil output has quadrupled and its stock price has gone up 1,500%.
Now Fort McMurray oil-sand miners face a severe shortage of dump-truck tires. A new dump-truck tire runs about $60,000. Tires last about 12 months. Each truck uses six tires at a time. That’s more than $360,000 in tire expenses per truck every year. Syncrude owns 90 trucks.
Here’s the thing: The tire’s cost isn’t the main concern of a mining company. It’s availability. Oil-sand mines cannot operate without a supply of brand new dump-truck tires. Without dump-truck tires, they’d have to close their operations… and lose billions of dollars. So I bet the oil companies in Athabasca would pay $100,000 for new tires… if it meant keeping their mines open.
Today, I recommend you look into another critical Athabasca supply line, natural gas. Like tires, natural gas is an essential resource for the oil companies. You simply cannot produce oil without it.
