Athabasca Oil Sands

History				sands and fuel to extract the crude.
The Athabasca oil sands are named after the				Oil prices 1996-2008 (not adjusted for inflation)
Athabasca River which cuts through the heart of				In mid-2006, the National Energy Board of Canada
the deposit, and traces of the heavy oil are				estimated the operating cost of a new mining
readily observed on the river banks. Historically,				operation in the Athabasca oil sands to be C$9 to
the bitumen was used by the indigenous Cree and				C$12 per barrel, while the cost of an in-situ SAGD
Dene Aboriginal peoples to waterproof their				operation (using dual horizontal wells) would be
canoes. The oil deposits are located within the				C$10 to C$14 per barrel. This compares to
boundaries of Treaty 8, and several First Nations				operating costs for conventional oil wells which can
of the area are involved with the sands.				range from less than one dollar per barrel in Iraq
Athabasca oil sands on the banks of the river, c.				and Saudi Arabia to over six in the United States
1900				and Canada's conventional oil reserves.
The Athabasca oil sands first came to the				The capital cost of the equipment required to
attention of European fur traders in 1719 when				mine the sands and haul it to processing is a
Wa-pa-su, a Cree trader, brought a sample of				major consideration in starting production. The
bituminous sands to the Hudson's Bay Company				NEB estimates that capital costs raise the total
post at York Factory on Hudson Bay where				cost of production to C$18 to C$20 per barrel for
Henry Kelsey was the manager. In 1778, Peter				a new mining operation and C$18 to C$22 per
Pond, another fur trader and a founder of the				barrel for a SAGD operation. This does not include
rival North West Company, became the first				the cost of upgrading the crude bitumen to
European to see the Athabasca deposits after				synthetic crude oil, which makes the final costs
discovering the Methye Portage which allowed				C$36 to C$40 per barrel for a new mining
access to the rich fur resources of the				operation.
Athabasca River system from the Hudson Bay				Therefore, although high crude prices make the
watershed.				cost of production very attractive, sudden drops
In 1788, fur trader Alexander MacKenzie (who				in price leaves producers unable to recover their
later discovered routes to both the Arctic and				capital costslthough the companies are well
Pacific Oceans from this area) wrote: "At about				financed and can tolerate long periods of low
24 miles (39 km) from the fork (of the				prices since the capital has already been spent
Athabasca and Clearwater Rivers) are some				and they can typically cover incremental operating
bituminous fountains into which a pole of 20 feet				costs.
(6.1 m) long may be inserted without the least				However, the development of commercial
resistance. The bitumen is in a fluid state and				production is made easier by the fact that
when mixed with gum, the resinous substance				exploration costs are very low. Such costs are a
collected from the spruce fir, it serves to gum				major factor when assessing the economics of
the Indians' canoes." He was followed in 1799 by				drilling in a traditional oil field. The location of the oil
map maker David Thompson and in 1819 by				deposits in the oil sands are well known, and an
British Naval officer Sir John Franklin.				estimate of recovery costs can usually be made
Sir John Richardson did the first geological				easily. There is not another region in the world
assessment of the oil sands in 1848 on his way				with energy deposits of comparable magnitude
north to search for Franklin's lost expedition. The				where it would be less likely that the installations
first government-sponsored survey of the oil				would be confiscated by a hostile national
sands was initiated in 1875 by John Macoun, and in				government, or be endangered by a war or
1883, G.C. Hoffman of the Geological Survey of				revolution.
Canada tried separating the bitumen from oil sand				As a result of the oil price increases since 2003,
with the use of water and reported that it				the economics of oil sands have improved
separated readily. In 1888, Dr. Robert Bell, the				dramatically. At a world price of US$50 per barrel,
director of the Geological Survey of Canada,				the NEB estimated an integrated mining operation
reported to a Senate Committee that "The				would make a rate return of 16 to 23%, while a
evidence ... points to the existence in the				SAGD operation would return 16 to 27%. Prices
Athabasca and Mackenzie valleys of the most				since 2006 have risen, exceeding US$145 in mid
extensive petroleum field in America, if not the				2008. As a result, capital expenditures in the oil
world."				sands announced for the period 2006 to 2015 are
In 1926, Dr. Karl Clark of the University of Alberta				expected to exceed C$100 billion, which is twice
perfected a hot water separation process which				the amount projected as recently as 2004.
became the basis of today's thermal extraction				However, because of an acute labour shortage
process. Several attempts to implement it had				which has developed in Alberta, it is not likely that
varying degrees of success, but it was 1967				all these projects can be completed.
before the first commercially viable operation				At present the area around Fort McMurray has
began with the opening of the Great Canadian Oil				seen the most effect from the increased activity
Sands (now Suncor) plant using surfactants in the				in the oil sands. Although jobs are plentiful, housing
separation process developed by Dr. Earl W.				is in short supply and expensive. People seeking
Malmberg of Sun Oil Company.				work often arrive in the area without arranging
Oil sands production				accommodation, driving up the price of temporary
Commercial production of oil from the Athabasca				accommodation. The area is isolated, with only a
oil sands began in 1967, when Great Canadian Oil				two-lane road connecting it to the rest of the
Sands Limited (then a subsidiary of Sun Oil				province, and there is pressure on the
Company but now an independent company				government of Alberta to improve road links as
known as Suncor Energy) opened its first mine,				well as hospitals and other infrastructure.
producing 30,000 barrels per day (4,800 m3/d)				Despite the best efforts of companies to move
of synthetic crude oil. Development was inhibited				as much of the construction work as possible out
by declining world oil prices, and the second mine,				of the Fort McMurray area, and even out of
operated by the Syncrude consortium, did not				Alberta, the shortage of skilled workers is
begin operating until 1978, after the 1973 oil crisis				spreading to the rest of the province.. Even
sparked investor interest. However, the price of				without the oil sands, the Alberta economy would
oil subsided afterwards, and although the 1979				be very strong, but development of the oil sands
energy crisis caused oil prices to peak again,				has resulted in the strongest period of economic
introduction of the National Energy Program by				growth ever recorded by a Canadian province.
Pierre Trudeau discouraged foreign investment in				Geopolitical importance
the Canadian oil industry. During the 1980s, oil				The Athabasca Oil Sands are now featured
prices declined to very low levels, causing				prominently in international trade talks, with
considerable retrenchment in the oil industry, and				energy rivals China and the United States
the third mine, operated by Shell Canada, did not				negotiating with Canada for a bigger share of the
begin operating until 2003. However, as a result of				oil sands' rapidly increasing output. Output at the oil
oil price increases since 2003, the existing mines				sands is expected to quadruple between 2005
have been greatly expanded and new ones are				and 2015, reaching 4 million bbl/day, increasing
being planned.				their political and economic importance. Currently
According to the Alberta Energy and Utilities				most of the oil sands production is exported to
Board, 2005 production of crude bitumen in the				the United States.
Athabasca oil sands was as follows:				An agreement has been signed between
2005 Productionm3/daybbl/day				PetroChina and Enbridge to build a
Suncor Mine				400,000 barrels per day (64,000 m3/d) pipeline
31,000				from Edmonton, Alberta, to the west coast port
195,000				of Kitimat, British Columbia, to export synthetic
Syncrude Mine				crude oil from the oil sands to China and
41,700				elsewhere in the Pacific, plus a
262,000				150-million-barrel-per-day (24,000,000 m3/d)
Shell Canada Mine				pipeline running the other way to import
26,800				condensate to dilute the bitumen so it will flow.
169,000				Sinopec, China's largest refining and chemical
In Situ Projects				company, and China National Petroleum
21,300				Corporation have bought or are planning to buy
134,000				shares in major oil sands development.
TOTAL				On August 20, 2009, the U.S. State Department
120,800				issued a presidential permit for an Alberta Clipper
760,000				Pipeline that will run from Hardisty, Alberta to
As of 2006, output of oil sands production had				Superior, Wisconsin. The pipeline will be capable of
increased to 1.126 million barrels per day				carrying up to 450,000 barrels of crude oil a day
(179,000 m3/d). Oil sands were the source of				from the Athabasca Oil Sands to U.S. refineries.
62% of Alberta's total oil production and 47% of				Indigenous peoples of the area
all oil produced in Canada. The Alberta government				Indigenous peoples of the area include the Fort
believes this level of production could reach				McKay First Nation. The oil sands themselves are
3 Mbbl/d (480,000 m3/d) by 2020 and possibly				located within the boundaries of Treaty 8, signed
5 Mbbl/d (790,000 m3/d) by 2030.				in 1899. The Fort McKay First Nation has formed
Future production				several companies to service the oil sands
As of December 2008, the Canadian Association				industry and will be developing a mine on their
of Petroleum Producers revised its 2008-2020				territory. Opposition remaining within the First
crude oil forecasts to account for project				Nation focuses on environmental stewardship
cancellations and cutbacks as a result of the price				issues.
declines in the second half of 2008. The revised				Oil sand companies
forecast predicted that Canadian oil sands				Planned mining operation oil production by various
production would continue to grow, but at a				companies. Data from table below.
slower rate than previously predicted. There				There are currently three large oil sands mining
would be minimal changes to 2008-2012				operations in the area run by Syncrude Canada
production, but by 2020 production could be				Limited, Suncor Energy and Albian Sands owned
300,000 barrels per day (48,000 m3/d) less				by Shell Canada, Chevron, and Marathon Oil Corp.
than its prior predictions. This would mean that				Major producing or planned developments in the
Canadian oil sands production would grow from				Athabasca Oil Sands include the following projects:
1.2 million barrels per day (190,000 m3/d) in				Suncor Energy's Steepbank and Millennium mines
2008 to 3.3 million barrels per day (520,000 m3				currently produce 263,000 barrels per day
d) in 2020, and that total Canadian oil production				(41,800 m3/d) and its Firebag in-situ project
would grow from 2.7 to 4.1 million barrels per day				produces 35,000 bbl/d (5,600 m3/d). It intends
(430,000 to 650,000 m3/d) in 2020. Even				to spend 3.2 billion to expand its mining operations
accounting for project cancellations, this would				to 400,000 bbl/d (64,000 m3/d) and its in-situ
place Canada among the four or five largest				production to 140,000 bbl/d (22,000 m3/d) by
oil-producing countries in the world by 2020.				2008.
In early December 2007, London based BP and				Syncrude's Mildred Lake and Aurora mines
Calgary based Husky Energy announced a 50/50				currently can produce 360,000 bbl/d (57,000 m3
joint venture to produce and refine bitumen from				d).
the Athabasca oil sands. BP would contribute its				Shell Canada currently operates its Muskeg River
Toledo, Ohio refinery to the joint venture, while				Mine producing 155,000 bbl/d (24,600 m3/d) and
Husky would contribute its Sunrise oil sands				the Scotford Upgrader at Fort Saskatchewan,
project. Sunrise was planned to start producing				Alberta. Shell intends to open its new Jackpine
60,000 barrels per day (9,500 m3/d) of bitumen				mine and expand total production to 500,000 bbl
in 2012 and may reach 200,000 bbl/d (30,000 m3				d (79,000 m3/d) over the next few years.
d) by 2015-2020. BP would modify its Toledo				Nexen's in-situ Long Lake SAGD project is now
refinery to process 170,000 bbl/d (27,000 m3/d)				producing 70,000 bbl/d (11,000 m3/d). Plans to
of bitumen directly to refined products. The joint				expand it to 240,000 bbl/d (38,000 m3/d) have
venture would solve problems for both				been made. Expansion plans were delayed in early
companies, since Husky was short of refining				2009.
capacity, and BP had no presence in the oil sands.				CNRL's $8 billion Horizon mine is planned to
It was a change of strategy for BP, since the				produce 110,000 bbl/d (17,000 m3/d) on startup
company historically has downplayed the				in mid 2009 and grow to 300,000 bbl/d
importance of oil sands.				(48,000 m3/d) by 2010.
In mid December 2007, ConocoPhillips announced				Total S.A.'s subsidiary Deer Creek Energy is
its intention to increase its oil sands production				operating a SAGD project on its Joslyn lease,
from 60,000 barrels per day (9,500 m3/d) to				producing 10,000 bbl/d (1,600 m3/d). It intends
1 million barrels per day (160,000 m3/d) over				on constructing its mine by 2010 to expand its
the next 20 years, which would make it the				production by 100,000 bbl/d (16,000 m3/d).
largest private sector oil sands producer in the				Imperial Oil's 5 to 8 billion Kearl Oil Sands Project is
world. ConocoPhillips currently holds the largest				projected to start construction in 2008 and
position in the Canadian oil sands with over 1				produce 100,000 bbl/d (16,000 m3/d) by 2010.
million acres (4000 km2) under lease. Other				Imperial also operates a 160,000 bbl/d
major oil sands producers planning to increase				(25,000 m3/d) in-situ operation in the Cold Lake
their production include Royal Dutch Shell (to				oil sands region.
770,000 bbl/d (122,000 m3/d); Syncrude Canada				Synenco Energy and SinoCanada Petroleum Corp.,
(to 550,000 bbl/d (87,000 m3/d); Suncor Energy				a subsidiary of Sinopec, China's largest oil refiner,
(to 500,000 bbl/d (79,000 m3/d) and Canadian				had agreed to create the 3.5 billion Northern Lights
Natural Resources (to 500,000 bbl/d (79,000 m3				mine, projected to produce 100,000 bbl/d
d). If all these plans come to fruition, these five				(16,000 m3/d) by 2009. This project has since
companies will be producing over 3.3 million bbl/d				been indefinitely deferred (as of 2007).
(500,000 m3/d) of oil from oil sands by 2028.				North American Oil Sands Corporation (NAOSC), a
Major Athabasca Oil Sands Projects (as of				subsidiary of Statoil, is expected to produce in the
December 2007)				Kai Kos Dehseh project around 100,000 bbl/d
Project Name				(16,000 m3/d) by 2015. It is expected to ramp
Type				up production to around 100,000 barrels per day
Major Partners				(16,000 m3/d) by around 2015.
National				Mining Projects
Affiliation				Operator
2007 Production				Project
(barrels/day)				Phase
Planned Production				Capacity
(barrels/day)				Start-up
Suncor				Regulatory Status
Primarily Mining				Royal Dutch Shell
Suncor Energy				Jackpine
Canada				1A
239,100				100,000 bbl/d (16,000 m3/d)
500,000				2010
Syncrude				Under construction
Mining
Syncrude				1B
Canada (some USA)				100,000 bbl/d (16,000 m3/d)
307,000				2012
550,000				Approved
Albian Sands
Mining				2
Shell(60%), Chevron(20%), Marathon(20%)				100,000 bbl/d (16,000 m3/d)
UK/Netherlands, USA				2014
136,000				Applied for
770,000				Muskeg River
MacKay River				Existing
SAGD				155,000 bbl/d (24,600 m3/d)
Petro-Canada				2002
Canada				Operating
30,000
190,000				Expansion
Fort Hills				115,000 bbl/d (18,300 m3/d)
Mining				2010
Petro-Canada(60%), UTS Energy(20%),				Approved
Teck(20%)				Pierre River
Canada				1
				100,000 bbl/d (16,000 m3/d)
140,000				2018
Foster Creek, Christina Lake				Applied for
SAGD
EnCana Energy(50%), ConocoPhillips(50%)				2
Canada, USA				100,000 bbl/d (16,000 m3/d)
6,000				2021
400,000				Applied for
Surmont				Canadian Natural Resources
SAGD				Horizon
Total S.A.(50%),ConocoPhillips(50%)				1
France, USA				135,000 bbl/d (21,500 m3/d)
193,000				2009
Hangingstone				Operating
SAGD
Japan Canada Oil Sands (JACOS)				2 and 3
Japan				135,000 bbl/d (21,500 m3/d)
8,000				2011
30,000				Approved
Long Lake
SAGD				4
Nexen(65%), OPTI Canada(35%)				145,000 bbl/d (23,100 m3/d)
Canada				2015
240,000				Announced
Horizon
Mining and in situ				5
Canadian Natural Resources Limited				162,000 bbl/d (25,800 m3/d)
Canada				2017
500,000				Announced
Jackfish I and II				Imperial Oil
SAGD				Kearl
Devon Energy				1
USA				100,000 bbl/d (16,000 m3/d)
??				2010
70,000				Approved
Northern Lights
Mining				2
Total S.A.(60%), Sinopec(40%)				100,000 bbl/d (16,000 m3/d)
France, China				2012
100,000				Approved
Kearl
Mining				3
Imperial Oil, ExxonMobil				100,000 bbl/d (16,000 m3/d)
USA				2018
300,000				Approved
Sunrise				Petro Canada
SAGD				Fort Hills
Husky Energy(50%), BP(50%)				1
Canada, UK				165,000 bbl/d (26,200 m3/d)
200,000				2011
Tucker				Approved
SAGD				debottleneck
Husky Energy				25,000 bbl/d (4,000 m3/d)
Canada				TBD
??				Approved
30,000				Suncor Energy
Oil Sands Project				Millenium
Mining and SAGD
Total S.A. (76%), Oxy (15%), Inpex (10%)				294,000 bbl/d (46,700 m3/d)
France, USA, Japan				1967
225,000				Operating
Ells River				debottleneck
SAGD				23,000 bbl/d (3,700 m3/d)
Chevron(60%), Marathon(20%), Shell(20%)				2008
USA, UK/Netherlands				Under construction
100,000				Steepbankdebottleneck
Terre de Grace				4,000 bbl/d (640 m3/d)
SAGD				2007
Value Creation Inc				Under construction
Canada				extension
300,000
Kai Kos Dehseh				2010
SAGD				Approved
Statoil				Voyageur South
Norway				1
200,000				120,000 bbl/d (19,000 m3/d)
Black Gold Mine				2012
Mining?				Applied for
Korea National Oil Corporation				Syncrude
Korea				Mildred Lake & Aurora
30,000				1 and 2
Total				290,700 bbl/d (46,220 m3/d)
726,100				1978
5,068,000				Operating
Development
The key characteristic of the Athabasca deposit				3 Expansion
is that it is the only one shallow enough to be				116,300 bbl/d (18,490 m3/d)
suitable for surface mining. About 10% of the				2006
Athabasca oil sands are covered by less than				Operating
75 metres (246 ft) of overburden. The mineable
area as defined by the Alberta government				3 Debottleneck
covers 37 contiguous townships (about				46,500 bbl/d (7,390 m3/d)
3,400 km2/1,300 sq mi) north of the city of				2011
Fort McMurray. The overburden consists of 1 to 3				Announced
metres of water-logged muskeg on top of 0 to
75 metres of clay and barren sand, while the				4 Expansion
underlying oil sands are typically 40 to 60 metres				139,500 bbl/d (22,180 m3/d)
thick and sit on top of relatively flat limestone				2015
rock. As a result of the easy accessibility, the				Announced
world's first oil sands mine was started by Great				Synenco Energy
Canadian Oil Sands Limited (a predecessor				Northern Lights
company of Suncor Energy) in 1967. The				1
Syncrude mine (the biggest mine in the world at				57,250 bbl/d (9,102 m3/d)
191 km2)[citation needed] followed in 1978, and				2010
the Albian Sands mine (operated by Shell Canada)				Applied for
in 2003. All three of these mines are associated				Total S.A.
with bitumen upgraders that convert the unusable				Joslyn
bitumen into synthetic crude oil for shipment to				1
refineries in Canada and the United States. At				50,000 bbl/d (7,900 m3/d)
Albian, the upgrader is located at Scotford,				2013
439 km south. The bitumen, diluted with a				Applied for
solvent is transferred there in a 610 millimetres
(24 in) Corridor Pipeline.				2
Bitumen extraction				50,000 bbl/d (7,900 m3/d)
Main article: Oil sands#Extraction process				2016
The original process for extraction of bitumen				Applied for
from the sands was developed by Dr. Karl Clark,
working with Alberta Research Council in the				3
1920s. Today, all of the producers doing surface				50,000 bbl/d (7,900 m3/d)
mining, such as Syncrude Canada, Suncor Energy				2019
and Albian Sands Energy etc., use a variation of				Announced
the Clark Hot Water Extraction (CHWE) process.
In this process, the ores are mined using open-pit				4
mining technology. The mined ore is then crushed				50,000 bbl/d (7,900 m3/d)
for size reduction. Hot water at 50 80 C is added				2022
to the ore and the formed slurry is transported				Announced
using hydrotransport line to a primary separation				UTS/Teck Cominco
vessel (PSV) where bitumen is recovered by				Equinox
flotation as bitumen froth. The recovered bitumen				Lease 14
froth consists of 60% bitumen, 30% water and				50,000 bbl/d (7,900 m3/d)
10% solids by weight. The recovered bitumen				2014
froth needs to be cleaned to reject the contained				Public disclosure
solids and water to meet the requirement of				Frontier
downstream upgrading processes. Depending on				1
the bitumen content in the ore, between 90 and				100,000 bbl/d (16,000 m3/d)
100% of the bitumen can be recovered using				2014
modern hot water extraction techniques. After oil				Public disclosure
extraction, the spent sand and other materials are				Royal Dutch Shell - misleading advertisement
then returned to the mine, which is eventually				In August 2008 the British Advertising Standards
reclaimed.				Authority (ASA) ruled that Royal Dutch Shell had
More recently, in-situ methods like steam assisted				misled the public by claiming that its oil sands
gravity drainage (SAGD) and cyclic steam				project in Alberta was a "sustainable energy
stimulation (CSS) have been developed to extract				source". Although widely used, "sustainable" had
bitumen from deep deposits by injecting steam to				been deemed a "vague" and "ambiguous" term, in
heat the sands and reduce the bitumen viscosity				light of DEFRA's advice that companies should
so that it can be pumped out like conventional				avoid vague environmentally-friendly terms
crude oil.				intended to simply give a good impression. They
The standard extraction process requires huge				concluded the claim of sustainability was misleading
amounts of natural gas. Currently, the oil sands				"[b]ecause we had not seen data that showed
industry uses about 4% of the Western Canada				how Shell was effectively managing carbon
Sedimentary Basin natural gas production. By				emissions from its oil sands projects in order to
2015, this may increase 2.5 fold.				limit climate change".
According to the National Energy Board, it requires				See also
about 1,200 cubic feet (34 m3) of natural gas to				Canadian Centre for Energy Information
produce one barrel of bitumen from in situ				History of the petroleum industry in Canada (oil
projects and about 700 cubic feet (20 m3) for				sands and heavy oil)
integrated projects. Since a barrel of oil equivalent				Mackenzie Valley Pipeline
is about 6,000 cubic feet (170 m3) of gas, this				Utah Oil Sands Joint Venture
represents a large gain in energy. That being the				References
case, it is likely that Alberta regulators will reduce				^ IHS CERA (May 18, 2009). "Oil Sands Move
exports of natural gas to the United States in				from the 'Fringe to Center' of Energy Supply".
order to provide fuel to the oil sands plants. As				RigZone. Retrieved 2009-05-19.
gas reserves are exhausted, however, oil				^ a b Andy Burrowes; Rick Marsh, Nehru Ramdin,
upgraders will likely turn to bitumen gasification to				Curtis Evans (2007) (PDF). Alberta's Energy
generate their own fuel. In much the same way				Reserves 2006 and Supply/Demand Outlook
the bitumen can be converted into synthetic				2007-2016. ST98. Alberta Energy and Utilities
crude oil, it can also be converted into synthetic				Board. Retrieved 2008-04-12.
natural gas.				^ "Alberta's Oil Sands 2006" (PDF). Government
In-situ extraction on a commercial scale is just				of Alberta. 2007. Retrieved 2008-02-17.
beginning. A project nearing completion, the Long				^ Mackenzie, Sir Alexander (1970). "The Journals
Lake Project, is designed to provide its own fuel,				and Letters of Alexander Mackenzie". Edited by
by on-site hydrocracking of the bitumen				W. Kaye Lamb. Cambridge: Hakluyt Society, pg.
extracted. Long Lake Phase 1 is extracting 13,000				129, ISBN 0521010349
barrels/day of bitumen as of July 2008, ramping				^ a b Hein, Francis J (2000). "Historical Overview
towards a target of 72,000 in late 2009. and				of the Fort McMurray Area and Oil Sands Industry
"upgrading" of bitumen to liquid oil in 2007,				in Northeast Alberta" (PDF). Earth Sciences Report
producing 60,000 bbl/day of usable oil. The				2000-05. Alberta Geological Survey. Retrieved
hydrocracker is scheduled to complete				2008-02-17.
commissioning by September 2008.				^ "Oil Sands History". Unlocking the Potential of
Environmental impacts				the Oil Sands. Syncrude. 2006. Retrieved
See also: Environmental issues surrounding oil				2008-02-17.
sands exploitation				^ "Oil Sands". Alberta Energy. Alberta
Mining operations in the Athabasca oil sands.				Government. 2008. Retrieved 2008-01-30.
Image shows the Athabasca River about 600m				^ "Oil sands & western Canadian
from the tailings pond. NASA Earth Observatory				conventional production, December 2008 interim
photo, 2009.				update". Canadian Association of Petroleum
Critics contend that government and industry				Producers. 2008-12-11. Retrieved 2009-01-03.
measures taken to minimize environmental and				^ Franklin, Sonja; Gismatullin, Eduard (2007-12-05).
health risks posed by large-scale mining operations				"BP, Husky Energy agree to form oil-sands
are inadequate, causing damage to the natural				partnerships". Bloomberg. Retrieved 2007-12-12.
environment. Objective discussion of the				^ Dutta, Ashok (2007-12-12). "ConocoPhillips aims
environmental impacts has often been clouded by				high". Calgary Herald. Retrieved 2007-12-12.
polarized arguments from industry and from				^ Alberta, Employment, Immigration and Industry
advocacy groups.				(December 2007). "Alberta Oil Sands Industry
Land				Update" (PDF). Government of Alberta. Retrieved
Approximately 20% of Alberta's oil sands are				2008-04-01.
recoverable through open-pit mining, while 80%				^ Albian Sands Announces Operator Agreement
require in situ extraction technologies (largely				News Release, November 18, 2008
because of their depth). Open pit mining destroys				^ Fort Hills Project page - Petro-Canada website
the boreal forest and muskeg. The Alberta				^ Encana website on Oilsands projects
government requires companies to restore the				^ a b ConocoPhillips - Canadian operations
land to "equivalent land capability". This means that				^ Jacos homepage
the ability of the land to support various land uses				^ Opti sells 15 per cent stake of oilsands joint
after reclamation is similar to what existed, but				venture to Nexen for $735 million Yahoo Finance,
that the individual land uses may not necessarily				Dec 17, 2008
be identical. In some particular circumstances the				^ Nexen Clinches Additional Long Lake Interest
government considers agricultural land to be				for $735MM - RigZone, Jan 27, 2008
equivalent to forest land. Oil sands companies				^ Horizon project homepage
have reclaimed mined land to use as pasture for				^ Devon Energy Obtains approval for Second
wood bison instead of restoring it to the original				Jackfish Oil Sands Production Project -
boreal forest and muskeg. Syncrude asserts they				Oilvoice.com, September 08, 2008
have reclaimed 22% of their disturbed land.				^ Synenco & Sinopec Enter Deal for
Water				Canadian Oil Sands Project RigZone - May 31,
A Pembina Institute report stated "To produce				2005
one cubic metre (m3) of synthetic crude oil (SCO)				^ Synenco page regarding SinoCanada
(upgraded bitumen) in a mining operation requires				^ [ Agreement to Buy Synenco Energy Inc. -
about 24.5 m3 of water (net figures). Approved				Total strengthens position in Canadian Heavy Oil] -
oil sands mining operations are currently licensed				Total E&P Canada News Release, April 28,
to divert 359 million m3 from the Athabasca				2008
River, or more than twice the volume of water				^ Kearl proposed project site - Imperialoil.ca
required to meet the annual municipal needs of				^ a b BP Enters Canadian Oil Sands with Husky
the City of Calgary." and went on to say "...the				Energy - BP press release,December 5, 2007
net water requirement to produce a cubic metre				^ Tucker project site
of oil with in situ (emphasis added) production				^ Chevron finishes Ells river drilling - (by
may be as little as 0.2 m3, depending on how				Schlumberger), March 30, 2007
much is recycled". Jeffrey Simpson of the Globe				^ Terre de Grace project page - Value Creation
and Mail paraphrased this report, saying: "A cubic				Inc website
metre of oil, mined from the tar sands, needs				^ Heavy Investment - Statoil arrives in the oil
two to 4.5 cubic metres of water.				sands - WoodMackenzie, Upstream Insight, May
The Athabasca River runs 1,231 kilometres from				2007
the Athabasca Glacier in west-central Alberta to				^ S. Korea Buys Canadian Oil Sands Property -
Lake Athabasca in northeastern Alberta . The				redorbit.com, July 24, 2006
average annual flow just downstream of Fort				^ "Operational excellence: the land we borrow".
McMurray is 633 cubic metres per second with its				Retrieved 2009-02-27.
highest daily average measuring 1,200 cubic				^ "Alberta Inventors and Inventionsarl Clark".
metres per second.				Retrieved 2006-03-29.
Water license allocations total about 1% of the				^ Gu G, Xu Z, Nandakumar K, Masliyah JH. (2002)
Athabasca river average annual flow. Actual use in				"Influence of water-soluble and water-insoluble
2006 was about 0.4%. In addition, the Alberta				natural surface active components on the stability
government sets strict limits on how much water				of water-in-toluene-diluted bitumen emulsion", Fuel,
oil sands companies can remove from the				81, pages 18591869.
Athabasca River. According to the Water				^ R. J. Mikula, O. Omotoso and W. I. Friesen
Management Framework for the Lower				(2007) "Interpretation of Bitumen Recovery Data
Athabasca River, during periods of low river flow				from Batch Extraction Tests", Canadian Journal of
water consumption from the Athabasca River is				Chemical Engineering, v 85 n 5, pages 765-772.
limited to 1.3% of annual average flow. The				^ "Canada Energy Future: Reference Case and
province of Alberta is also looking into cooperative				Scenarios to 2030" Pages 45-48 ISBN
withdrawal agreements between oil sands				978-0-662-46855-4
operators.				^ "Questions and Answers". Canada's Oil
Natural gas use and greenhouse gases				Sandspportunities and Challenges to 2015: An
The processing of bitumen into synthetic crude				Update. National Energy Board of Canada.
requires energy, and currently this energy is				2007-06-30. Retrieved 2007-08-23.
generated by burning natural gas, which releases				^ Long Lake Project
carbon dioxide. In 2007, the oil sands used around				^ "Operationsthabasca Oil Sandsong Lake
1 billion cubic feet of natural gas per day, around				Projectroject Overview". Nexen Inc.. Retrieved
40% of Alberta's total usage. Based on gas				2006-03-29.
purchases, natural gas requirements are given by				^ "Nexen Nods Positive Reservoir Performance at
the Canadian Energy Resource Institute as 2.14				Long Lake" Nexen, 17 July 2008
GJ (2.04 mcf) per barrel for cyclic steam				^ "Alberta Plan Fails to Protect Athabasca River".
stimulation projects, 1.08 GJ (1.03 mcf) per barrel				^ "Alberta's tar sands are soaking up too much
for SAGD projects, 0.55 GJ (0.52 mcf) per barrel				water". The Globe and Mail (Dogwood Initiative).
for bitumen extraction in mining operations not				2006-07-05.
including upgrading or 1.54 GJ (1.47 mcf) per barrel				^ "'Conspiracy of silence' on tarsands, group
for extraction and upgrading in mining operations.				says". CTV News. Retrieved 2008-02-16.
The forecast growth in synthetic oil production in				^ "Tar won't stick". Edmonton Journal. Retrieved
Alberta also threatens Canada's international				2008-02-16.
commitments. In ratifying the Kyoto Protocol,				^ "Time for Ottawa to stop tiptoeing around
Canada agreed to reduce, by 2012, its				Alberta oilsands sensibilities". Oil Week. 2008-02-15.
greenhouse gas emissions by 6% with respect to				Retrieved 2008-02-16. (industry publication)
1990. In 2002, Canada's total greenhouse gas				^ "Environmental Protection and Enhancement".
emissions had increased by 24% since 1990. Oil				Alberta Environment.
Sands production contributed 3.4% of Canada's				^ "Syncrude Land Reclamation". Syncrude Canada.
greenhouse gas emissions in 2003.				2006. Retrieved 2009-08-07.
Ranked as the world's eighth largest emitter of				^ "Troubled Waters, Troubling Trends". The
greenhouse gases, Canada is a relatively large				Pembina Institute. May 2006. (advocacy)
emitter given its population and is missing its				^ "Primer". Environment Canada.
Kyoto targets. A major Canadian initiative called				^ "Athabasca river water management
the Integrated CO2 Network (ICO2N) has				framework".
proposed a system for the large scale capture,				^ "Typical River Flows". Environment Canada.
transport and storage of carbon dioxide (CO2).				Retrieved 2008-12-13.
ICO2N members represent a group of industry				^ "Environmental Aspects of Oil Sands
participants providing a framework for carbon				Development-Backgrounder" (PDF). Canadian
capture and storage development in Canada,				Association of Petroleum Producers. Retrieved
initially using it to enhance oil recovery. Nuclear				2008-12-13.
power has also been proposed as a means of				^ "Athabasca River Water Management
generating the required energy without releasing				Framework". Alberta Environment.
green house gases.				^ "Enhancing Resilience in a Changing Climate,
Population				Water Supply for Canada's Oil Sands". Natural
The Athabasca oil sands are located in the				Resources Canada.
northeastern portion of the Canadian province of				^ McColl, David; Slagorsky, Martin (November
Alberta, near the city of Fort McMurray. The area				2008). Canadian Oil Sands Supply Costs and
is only sparsely populated, and in the late 1950s, it				Development Projects. Canadian Energy Research
was primarily a wilderness outpost of a few				Institute. ISBN 1896091830.
hundred people whose main economic activities				^ "Section 2 Crude Bitumen" Alberta Energy
included fur trapping and salt mining. From a				Resources Board Graphs and Data (Powerpoint
population of 37,222 in 1996, the boomtown of				file)
Fort McMurray and the surrounding region (known				^ Top 50 countries by greenhouse gas emissions
as the Regional Municipality of Wood Buffalo) grew				Reuters
to 79,810 people as of 2006, including a "shadow				^ "Carbon Capture and Storage" 30 November
population" of 10,442 living in work camps, leaving				2007.
the community struggling to provide services and				^ Planning and Development Department (2006).
housing for migrant workers, many of them from				"Municipal Census 2006" (PDF). Regional Municipality
Eastern Canada, especially Newfoundland. Fort				of Wood Buffalo. Retrieved 2008-02-06.
McMurray ceased to be an incorporated city in				^ "Urban Service Areas". Unincorporated Places.
1995 and is now an urban service area within				Alberta Population. 2008. Retrieved 2008-02-06.
Wood Buffalo.				^ Department of Energy, Alberta (June 2006). "Oil
Estimated oil reserves				Sands Fact Sheets". Retrieved 2007-04-11.
The Alberta government's Energy and Utilities				^ Canada, Statistics (April 5, 2007). "Latest
Board (EUB) estimated in 2007 that about				release from the labour force survey". Retrieved
173 billion barrels (27.510^9 m3) of crude				2007-04-11.
bitumen are economically recoverable from the				^ a b NEB (June 2006) (PDF). Canada's Oil Sands
three Alberta oil sands areas based on benchmark				Opportunities and Challenges to 2015: An Update.
WTI market prices of $62 per barrel in 2006,				National Energy Board of Canada. Retrieved
rising to a projected $69 per barrel in 2016 using				2006-10-30.
current technology. This was equivalent to about				^ Nikiforuk, Andrew (2006-06-04). "The downside
10% of the estimated 1,700 billion barrels				of boom: Alberta's manpower shortage". Canadian
(27010^9 m3) of bitumen-in-place. In fact WTI				Business magazine. Retrieved 2006-10-30.
prices topped $133 in May 2008. Alberta				^ Statistics Canada (2006-09-14). Study: The
estimated that the Athabasca deposits alone				Alberta economic juggernaut. Statistics Canada.
contain 35 billion barrels (5.610^9 m3) of surface				Retrieved 2006-10-30.
mineable bitumen and 98 billion barrels				^ Enbridge and PetroChina Sign Gateway Pipeline
(15.610^9 m3) of bitumen recoverable by in-situ				Cooperation Agreement \| Business Wire \| Find
methods. These estimates of Canada's reserves				Articles at BNET
were doubted when they were first published but				^
are now largely accepted by the international oil				^
industry. This volume placed Canadian proven				^ Financial Post Articleboriginal implication in the
reserves second in the world behind those of				project
Saudi Arabia.				^ Oil Sands Projects Oilsands Discovery
Syncrude's Mildred Lake mine site and plant				^ Synenco conference transcript
The method of calculating economically				^ Wojciech Moskwa (2007-04-27). "Statoil to buy
recoverable reserves that produced these				North American Oil Sands for 2 bln". Financial Post.
estimates was adopted because conventional				Retrieved 2007-12-09.
methods of accounting for reserves gave				^ Shell rapped by ASA for 'greenwash' advert -
increasingly meaningless numbers. They made it				guardian.co.uk, August 13, 2008
appear that Alberta was running out of oil at a				External links
time when rapid increases in oil sands production				Alberta Oil Sands: Key Issues and Impacts
were more than offsetting declines in conventional				OnEarth Magazine Canada's Highway to Hell
oil, and in fact most of Alberta's oil production is				Mud, Sweat and Tearsuardian Newspaper, 2007
now unconventional oil. Conventional estimates of				Hugh McCullum, Fuelling Fortress America: A
oil reserves are really calculations of the geological				Report on the Athabasca Tar Sands and U.S.
risk of drilling for oil, but in the oil sands there is				Demands for Canada's Energy (The Parkland
very little geological risk because they outcrop on				Institute)xecutive SummaryDownload report
the surface and are easy to locate. With the oil				Oil Sands Historyyncrude Canada
price increases since 2003, the economic risk of				Oil Sands Discovery Centreort McMurray Tourism
low oil prices was reduced.				The Trillion-Barrel Tar Pitrticle from December
The Alberta estimates only assume a recovery				2004 Wired.
rate of around 20% of bitumen-in-place, whereas				Oil Sands Reviewister publication to Oilweek
oil companies using the steam assisted gravity				Magazine
drainage (SAGD) method of extracting bitumen				Alberta's Oil Sandslberta Department of Energy
report that they can recover over 60% with little				Alberta's Reserves 2005 and Supply/Demand
effort.				Outlook 2006-2015lberta Energy and Utilities Board
Only 3% of the initial established crude bitumen				2006-06-15
reserves have been produced since commercial				Canada's Oil Sandspportunities and Challenges to
production started in 1967. At rate of production				2015: An Updateune 2006ational Energy Board of
projected for 2015, about 3 million barrels per				Canada
day (48010^3 m3/d), the Athabasca oil sands				Oilsands overview- Canadian Centre for Energy
reserves would last over 170 years. However				Information
those production levels require an influx of				Alberta Plan Fails to Protect Athabasca River
workers into an area that until recently was				Megaprojects
largely uninhabited. By 2007 this need in northern				"Energy Statistics Handbook" (February 2008)
Alberta drove unemployment rates in Alberta and				Statistics Canada ISSN 1496-4600
adjacent British Columbia to the lowest levels in				Alastair Sweeny, History of the Oilsands to 1914
history. As far away as the Atlantic Provinces,				(French) Du sable dans l'engrenage tv document
where workers were leaving to work in Alberta,				by Guy Gendron and Jean-Luc Paquette describing
unemployment rates fell to levels not seen for				the Athabasca oil sands issues.
over one hundred years.				Further reading
The Venezuelan Orinoco Oil Sands site may				Kunzig, Robert (March 2009). "The Canadian Oil
contain more oil sands than Athabasca. However,				Boom: Scraping Bottom". National Geographic 215
while the Orinoco deposits are less viscous and				(3): 3859. Retrieved 29 May 2009. v d e
more easily produced using conventional				Western Canadian Sedimentary Basin
techniques (the Venezuelan government prefers				Hydrocarbon history
to call them "extra-heavy oil"), they are too deep				Oil sands and heavy oil Frontier exploration and
to access by surface mining.				development Natural gas liquids Natural gas
Economics				Depositional Regions
Despite the large reserves, the cost of extracting				Southern Alberta Central Alberta Northwestern
the oil from bituminous sands has historically made				Alberta Plains South-central Canadian Rockies
production of the oil sands unprofitablehe cost of				foothills North-east Plains North-central
selling the extracted crude would not cover the				foothills Liard River Fort Nelson Northern
direct costs of recovery; labour to mine the				Rocky Mountains Fort St.

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