Oil Sands
About Oil Sands
Canada's Oil Sands
The oil sands are a powerful source of Canadian energy. Moving us. Heating us. Creating jobs. Helping pay for public services. Energy from the oil sands happens because of the human energy and innovation that goes into it. People striving to do better while working to reduce impact on the environment. That’s as Canadian as it gets.
Alberta’s oil reserves play an important role in the Canadian and global economy, supplying stable, reliable energy to the world. Alberta's oil sands have been described by Time Magazine as "Canada's greatest buried energy treasure." But what is oil sand exactly?
Oil sand is a naturally occurring mixture of sand, clay or other minerals, water and bitumen, which is a heavy and extremely viscous oil that must be treated before it can be used by refineries to produce usable fuels such as gasoline and diesel. Bitumen is so viscous that at room temperature it acts much like cold molasses. New technologies are increasing the treatment methods available to oil sands producers as more research is completed.
Oil sand can be found in several locations around the globe, including Venezuela, the United States and Russia, but the Athabasca deposit in Alberta is the largest, most developed and utilizes the most technologically advanced production processes.
Historically, oil sand was incorrectly referred to as tar sand due to the now outdated and largely ineffective practice of using it for roofing and paving tar (oil sand will not harden suitably for these purposes). Though they appear to be visibly similar, tar and oil sands are different;
- Oil sand is a naturally occurring petrochemical that can be upgraded into crude oil and other petroleum products.
- Tar is synthetically produced from coal, wood, petroleum or peat through destructive distillation, it is generally used to seal against moisture.
Oil Sands 101
Oil Sands 101
Ever wonder how Alberta's oil reserves make it from the ground into your gas tank? Oil Sands 101 provides a detailed, step-by-step account of the oil sands process, from initial permit applications through to reclamation of the site.
Go to Oil Sands 101.
Each page contains information, charts, photographs and links to provide the facts you need to understand this important Albertan industry.
For an overview of the regulatory processes that are involved in developing the oil sands, please see Oil Sands Regulatory Processes Overview.
Facts & Statistics
Facts and Statistics
The responsible development of oil sands is a key driver of Alberta’s and Canada’s economy. It creates jobs and tax revenue for government which support the social programs and capital infrastructure projects we rely on.
Oil sands facts, statistics and indicators are subject to change as new information becomes available. Oil sands sustainability indicators highlight trends across economic, environmental and social topics in Alberta’s oil sands areas.
Where applicable, external sources have been noted and linked appropriately.
Sources are the Government of Alberta unless otherwise stated, direct sources have been noted and linked.
Economics
Reserves and Production
- Alberta's oil sands has the third largest oil reserves in the world, after of Venezuela and Saudi Arabia.
- As of 2014, Alberta's oil sands proven reserves were 166 billion Barrels (bbl).
- Total oil sands production (mined and in situ) reached about 2.3 million barrels per day (bbl/d) in 2014. Source: Alberta Energy Regulator (AER) ST 98
, ST39
and ST53 reports. - Oil Sands Projects map
, listing all projects and upgraders (announced to operating) - An inventory of statistics, major projects and economic highlights is available on the Alberta, Canada site.
Investment
- Between 1999 and 2013, approximately $201 billion was invested in the oil sands industry.
- Oil sands investment was equal to $27.2 billion in 2012, the highest investment to date in oil sands history.
- Statistics Canada’s preliminary actual data for 2013 show the oil sands investment reaching the new record high of $32.7 billion. Source: Statistics Canada, Private and Public Investment in Canada
Employment
- In 2014, approximately 133,053 people were employed in Alberta’s upstream energy sector, which includes oil sands, conventional oil, gas and mining. Source: Statistics Canada, Survey of Employment, Payrolls and Hours.
Royalties
- In the fiscal year 2013 – 2014, synthetic crude oil and bitumen royalty accounted for about $5.2 billion or almost 55 per cent of Alberta’s $9.6 billion non-renewable resource revenue. Historical royalty data is available.
Geography
-
Alberta's oil sands underlie 142,200 square kilometres (km2) of land in the Athabasca, Cold Lake and Peace River areas in northern Alberta.
-
Reserves shallow enough to mine (up to 75 meters) are found only within the Athabasca oil sands area. Surface Mineable Area (SMA) equals to about 4,800 km2 and accounts for about 3.4 per cent of total oil sands area.
- Alberta’s three oil sands areas of Athabasca, Cold Lake and Peace River have regulatory boundaries established by the Alberta Energy Regulator. Each region has a Comprehensive Regional Infrastructure Sustainability Plan (CRISP).
Environment
- Greenhouse Gas Emissions (GHG)
- Alberta became the first jurisdiction in North America to legislate greenhouse gas (GHG) emissions reductions for large industrial facilities by passing the Specified Gas Emitters Regulation (SGER).
- In 2012, oil sands accounted for about 8.7 per cent of Canada's GHG emissions and about 0.1% of global GHG emissions.
- Between 1990 and 2012, oil sands producers reduced per barrel emissions by an average of 28 per cent. Source: Environment Canada
- Carbon Capture and Storage (CCS) is a technology that can be used in a number of industries to reduce CO2 emissions. Alberta is investing $1.3 billion over 15 years in two large scale CCS projects, the Alberta Carbon Trunk Line and the Quest Project.
- GHG sources are also listed with Alberta Environment and Parks.
Water Usage
- Oil sands projects recycle 80-95 per cent of water used and use saline water where possible.
- River Management Frameworks from Alberta Environment and Parks impose strict limits on water usage.
Land Management/Reclamation
- Mine operators are required to supply reclamation security bonds to ensure requirements are met. Reclamation certificates are not issued until monitoring through time demonstrates that these particular lands meet the criteria for return to self-sustaining ecosystems. The first successful reclamation occurred in 2008.
- Disturbed oil sands surface minable area equaled to about 895 km2 in 2013 accounting for less than 1 per cent of total oil sands area and about 0.2 per cent of Alberta boreal forest which covers over 381,000 km2.
- The total area occupied by oil sands tailings ponds and associated structures (such as dikes) was 220 km2 at the end of 2013. Of that, the total liquid surface area of the ponds was 88 km2. The total volume of fine fluid tailings reported by the mine operators for 2013 was 975.6 million cubic meters (m3).
- In 2009, the Alberta Energy Regulator issued Directive 074 with aggressive criteria for managing tailings.Work continues on the Tailings Management Framework which will drive further operator action to reclaim legacy tailings.
- Oil sands mine reclamation and disturbance tracking by year (OSIP) is a sustainability indicator.
- The Alberta Land Stewardship Act supports the Land-use Framework , designed to encompass province-wide strategies to manage the province's land and natural resources to achieve Alberta's long-term economic, environmental and social goals.
- The Oil Sands Sustainable Development Secretariat was created in 2007 to address rapid growth issues in the oil sands regions of Alberta. The Secretariat collaborates with ministries, industry, communities and stakeholders to address the social, infrastructure, environmental and economic impacts of oil sands development.
- The Oil Sands information portal offers environmental data and information about Alberta's oil sands, featuring an interactive map and searchable data library.
Oil Sands FAQ's
Oil Sands Frequently Asked Questions
Area Map
History
History[edit]
The Athabasca oil sands are named after the Athabasca River which cuts through the heart of the deposit, and traces of the heavy oil are readily observed on the river banks. Historically, the bitumen was used by the indigenousCree and Dene Aboriginal peoples to waterproof their canoes.[7] The oil deposits are located within the boundaries of Treaty 8, and several First Nations of the area are involved with the sands.
Early history[edit]
The Athabasca oil sands first came to the attention of European fur traders in 1719 when Wa-pa-su, a Cree trader, brought a sample of bituminous sands to the Hudson's Bay Companypost at York Factory on Hudson Bay where Henry Kelsey was the manager. In 1778, Peter Pond, another fur trader and a founder of the rival North West Company, became the first European to see the Athabasca deposits after exploring the Methye Portage which allowed access to the rich fur resources of the Athabasca River system from the Hudson Bay watershed.[8]
In 1788, fur trader Alexander Mackenzie, who later discovered the Mackenzie River and routes to both the Arctic and Pacific Oceans wrote: "At about 24 miles (39 km) from the fork (of the Athabasca and Clearwater Rivers) are some bituminous fountains into which a pole of 20 feet (6.1 m) long may be inserted without the least resistance. The bitumen is in a fluid state and when mixed with gum, the resinous substance collected from the spruce fir, it serves to gum the Indians' canoes." He was followed in 1799 by map maker David Thompsonand in 1819 by British Naval officer John Franklin.[9]
John Richardson did the first serious scientific assessment of the oil sands in 1848 on his way north to search for Franklin's lost expedition. The first government-sponsored survey of the oil sands was initiated in 1875 by John Macoun, and in 1883, G.C. Hoffman of the Geological Survey of Canada tried separating the bitumen from oil sand with the use of water and reported that it separated readily. In 1888,Robert Bell, the director of the Geological Survey of Canada, reported to a Senate Committee that "The evidence ... points to the existence in the Athabasca and Mackenzie valleys of the most extensive petroleum field in America, if not the world."[8]
Count Alfred von Hammerstein (1870–1941), who arrived in the region in 1897, promoted the Athabaska oil sands for over forty years, taking photos with descriptive titles such as "Tar Sands and Flowing Asphaltum in the Athabasca District," that are now in the National Library and National Archives Canada. Photos of the Athabasca oil sands were also featured in Canadian writer and adventurer, Agnes Deans Cameron's, best-selling book(Cameron & 1908 71)[10] entitled The New North: Being Some Account of a Woman’s Journey through Canada to the Arctic which recounted her 10,000 mile-round trip to the Arctic Ocean. Following this journey and the publication of her book, she travelled extensively as lecturer, with magic lantern slides of her Kodak images, promoting immigration to western Canada at Oxford, Cambridge, St. Andrew’s University and the Royal Geographical Society.[11] Her photographs were reproduced in 2011-2012 in an exhibit at the Canadian Museum of Civilization in Ottawa, Canada.(Gismondi & 2012 71)[12] Cameron was particularly enthusiastic about the Athabaska region and the Athabaska oil sands which included photos of Count Alfred Von Hammerstein's oil drill works along the Athabasca River. "While the Count was unsuccessful drilling for "elephant pools of oil," Cameron’s book and its images... made her a media celebrity."(Gismondi & 2012 71)[12] "In all Canada there is no more interesting stretch of waterway than that upon which we are entering. An earth-movement here has created a line of fault clearly visible for seventy or eighty miles along the river-bank, out of which oil oozes at frequent intervals. […] Tar there is […] in plenty. […] It oozes from every fissure, and into some bituminous tar well we can poke a twenty-foot pole and find no resistance.(1909 & Cameron 71)[10] cited in (Gismondi & 2012 71)[12]
Project oilsand[edit]
Main article: Project Oilsand
In 1926, Karl Clark of the University of Alberta received a patent for a hot water separation process which was the forerunner of today's thermal extraction processes. Several attempts to implement it had varying degrees of success.
The oil sands, which are typically 40 to 60 metres thick and sit on top of relatively flat limestone rock, are relatively easy to access. They lie under 1 to 3 metres of water-logged muskeg, 0 to 75 metres of clay and barren sand. As a result of the easy accessibility, the world's first oil sands mine was in the Athabasca oil sands.
Project Oilsand, also known as Project Oilsands, was a 1958 proposal to exploit the Athabasca Oil Sands in Alberta via the underground detonation of up to 100 nuclear explosives;[13] hypothetically, the heat and pressure created by an underground detonation would boil the bitumen deposits, reducing their viscosity to the point that standard oilfield techniques could be used. The general means by which the plan was to work was discussed in the October 1976 Bulletin of Atomic Scientists issue.[14] A patent was granted for the process that was intended: The Process for Stimulating Petroliferous Subterranean Formations with Contained Nuclear Explosions by Bray, Knutson, and Coffer which was first submitted in 1964.[15][16] With the nuclear detonation option being considered to have served as a forerunner to some of the nascent conventional ideas that are presently in use and proposed to extract oil from the Alberta regions Athabasca oil sands.[17]
Great Canadian Oil Sands[edit]
Main article: Suncor
Commercial production of oil from the Athabasca oil sands began in 1967, with the opening of the Great Canadian Oil Sands (GCOS) plant in Fort McMurray. It was the first operational oil sands project in the world, owned and operated by the American parent company, Sun Oil Company. When the $US240 million dollar plant officially opened with a capacity of 45,000 bpd, it marked the beginning of commercial development of the Athabasca oil sands. In 2013 McKenzie-Brown listed industrialist J. Howard Pew as one of the six visionaries who built the Athabasca oil sands.[18] By the time of his death in 1971, the Pew family were ranked by Forbes magazine as one of the half-dozen wealthiest families in America.[19] The Great Canadian Oil Sands Limited (then a subsidiary of Sun Oil Company but now incorporated into an independent company known as Suncor Energy Inc.) produced 30,000 barrels per day (4,800 m3/d) of synthetic crude oil.[20]
GCOS used surfactants in the separation process developed by Sun Oil Company's Earl W. Malmberg.
Syncrude[edit]
Main article: Syncrude
The true size of the Canadian oil sands deposits became known in the 1970s. The Syncrude mine opened in 1978 and is now the largest mine (by area) in the world, with mines potentially covering 140,000 km2.[21]
1973 oil crisis[edit]
Main article: 1973 oil crisis
Development was inhibited by declining world oil prices, and the second mine, operated by the Syncrude consortium, did not begin operating until 1978, after the 1973 oil crisis sparked investor interest.
1979 energy crisis[edit]
Main article: 1979 energy crisis
However the price of oil subsided afterwards and although the 1979 energy crisis caused oil prices to peak again, during the 1980s, oil prices declined to very low levels causing considerable retrenchment in the oil industry.
Oil sands production in the 21st century[edit]
At the turn of the 21st century, oil sands development in Canada started to take off, with an expansion at the Suncor mine, a new mine and expansion at Syncrude,and a new mine by Royal Dutch Shell associated with their newScotford Upgrader near Edmonton. Three new large steam assisted gravity drainage (SAGD) projects were added – Foster Creek, Surmont, and MacKay River – by different companies, all of which have since been bought by larger companies.[22]
Shell Canada's third mine began operating in 2003. However, as a result of oil price increases since 2003, the existing mines have been greatly expanded and new ones are being planned. According to the Alberta Energy and Utilities Board, 2005 production of crude bitumen in the Athabasca oil sands was as follows:
| 2005 Production | m3/day | bbl/day |
|---|---|---|
| Suncor Mine | 31,000 | 195,000 |
| Syncrude Mine | 41,700 | 262,000 |
| Shell Canada Mine | 26,800 | 169,000 |
| In Situ Projects | 21,300 | 134,000 |
| Total | 120,800 | 760,000 |
As of 2006, oil sands production had increased to 1.126 million barrels per day (179,000 m3/d). Oil sands were the source of 62% of Alberta's total oil production and 47% of all oil produced in Canada.[23] As of 2010, oil sands production had increased to over 1.6 million barrels per day (250,000 m3/d), where 53% of this was produced by surface mining and 47% by in-situ. The Alberta government believes this level of production could reach 3.5 Mbbl/d (560,000 m3/d) by 2020 and possibly 5 Mbbl/d (790,000 m3/d) by 2030.[24]
In 2012, the actual oil production from oil sands was 1.8 MBPD.[25]
Oil Sand Companies
Oil sand companies[edit]
There are currently three large oil sands mining operations in the area run by Syncrude Canada Limited, Suncor Energy and Albian Sands owned by Shell Canada, Chevron, and Marathon Oil Corp.
Major producing or planned developments in the Athabasca Oil Sands include the following projects:[147]
- Suncor Energy's Steepbank and Millennium mines currently produce 263,000 barrels per day (41,800 m3/d) and its Firebag in-situ project produces 35,000 bbl/d (5,600 m3/d). It intends to spend 3.2 billion to expand its mining operations to 400,000 bbl/d (64,000 m3/d) and its in-situ production to 140,000 bbl/d (22,000 m3/d) by 2008.
- Syncrude's Mildred Lake and Aurora mines currently can produce 360,000 bbl/d (57,000 m3/d).
- Shell Canada currently operates its Muskeg River Mine producing 155,000 bbl/d (24,600 m3/d) and the Scotford Upgrader at Fort Saskatchewan, Alberta. Shell intends to open its new Jackpine mine and expand total production to 500,000 bbl/d (79,000 m3/d) over the next few years.
- Nexen's in-situ Long Lake SAGD project is now producing 70,000 bbl/d (11,000 m3/d). Plans to expand it to 240,000 bbl/d (38,000 m3/d) have been made. Expansion plans were delayed in early 2009.
- CNRL's $8 billion Horizon mine is planned to produce 110,000 bbl/d (17,000 m3/d) on startup in mid-2009 and grow to 300,000 bbl/d (48,000 m3/d) by 2010.
- Total S.A.'s subsidiary Deer Creek Energy was operating a SAGD project on its Joslyn lease, producing 10,000 bbl/d (1,600 m3/d). It intended on constructing its mine by 2010 to expand its production by 100,000 bbl/d (16,000 m3/d), however this had not occurred by May 2014 when the company shelved the project while it reviewed the economic viability of the project.[148]
- Imperial Oil's 4.6 billion barrel Kearl Oil Sands Project is projected to start construction in 2008 and produce 110,000 bbl/d (17,000 m3/d) by the end of 2012. Imperial also operates a 160,000 bbl/d (25,000 m3/d) in-situ operation in the Cold Lake oil sands region.
- Synenco Energy and SinoCanada Petroleum Corp., a subsidiary of Sinopec, China's largest oil refiner, had agreed to create the 3.5 billion Northern Lights mine, projected to produce 100,000 bbl/d (16,000 m3/d) by 2009. This project has since been indefinitely deferred (as of 2007).[149]
- North American Oil Sands Corporation (NAOSC), a subsidiary of Statoil, is expected to produce in the Kai Kos Dehseh project around 100,000 bbl/d (16,000 m3/d) by 2015. It is expected to ramp up production to around 100,000 barrels per day (16,000 m3/d) by around 2015.[150]
| Operator | Project | Phase | Capacity | Start-up | Regulatory Status |
| Royal Dutch Shell | Jackpine | 1A | 100,000 bbl/d (16,000 m3/d) | 2010 | Under construction |
| 1B | 100,000 bbl/d (16,000 m3/d) | 2012 | Approved | ||
| 2 | 100,000 bbl/d (16,000 m3/d) | 2014 | Applied for | ||
| Muskeg River | Existing | 155,000 bbl/d (24,600 m3/d) | 2002 | Operating | |
| Expansion | 115,000 bbl/d (18,300 m3/d) | 2010 | Approved | ||
| Pierre River | 1 | 100,000 bbl/d (16,000 m3/d) | 2018 | Applied for | |
| 2 | 100,000 bbl/d (16,000 m3/d) | 2021 | Applied for | ||
| Canadian Natural Resources | Horizon | 1 | 135,000 bbl/d (21,500 m3/d) | 2009 | Operating |
| 2 and 3 | 135,000 bbl/d (21,500 m3/d) | 2011 | Approved | ||
| 4 | 145,000 bbl/d (23,100 m3/d) | 2015 | Announced | ||
| 5 | 162,000 bbl/d (25,800 m3/d) | 2017 | Announced | ||
| Imperial Oil | Kearl | 1 | 110,000 bbl/d (17,000 m3/d) | 2012 | Operating |
| 2 | 220,000 bbl/d (35,000 m3/d) | 20?? | Approved | ||
| 3 | 275,000 bbl/d (43,700 m3/d) | 20?? | Approved | ||
| 4 | 345,000 bbl/d (54,900 m3/d) | 20?? | Approved | ||
| Petro Canada | Fort Hills | 1 | 165,000 bbl/d (26,200 m3/d) | 2011 | Approved |
| debottleneck | 25,000 bbl/d (4,000 m3/d) | TBD | Approved | ||
| Suncor Energy | Millenium | 294,000 bbl/d (46,700 m3/d) | 1967 | Operating | |
| debottleneck | 23,000 bbl/d (3,700 m3/d) | 2008 | Under construction | ||
| Steepbank | debottleneck | 4,000 bbl/d (640 m3/d) | 2007 | Under construction | |
| extension | 2010 | Approved | |||
| Voyageur South | 1 | 120,000 bbl/d (19,000 m3/d) | 2012 | Applied for | |
| Syncrude | Mildred Lake & Aurora | 1 and 2 | 290,700 bbl/d (46,220 m3/d) | 1978 | Operating |
| 3 Expansion | 116,300 bbl/d (18,490 m3/d) | 2006 | Operating | ||
| 3 Debottleneck | 46,500 bbl/d (7,390 m3/d) | 2011 | Announced | ||
| 4 Expansion | 139,500 bbl/d (22,180 m3/d) | 2015 | Announced | ||
| Synenco Energy | Northern Lights | 1 | 57,250 bbl/d (9,102 m3/d) | 2010 | Applied for |
| Total S.A. | Joslyn | 1 | 50,000 bbl/d (7,900 m3/d) | 2013 | Applied for |
| 2 | 50,000 bbl/d (7,900 m3/d) | 2016 | Applied for | ||
| 3 | 50,000 bbl/d (7,900 m3/d) | 2019 | Announced | ||
| 4 | 50,000 bbl/d (7,900 m3/d) | 2022 | Announced | ||
| UTS/Teck Cominco | Equinox | Lease 14 | 50,000 bbl/d (7,900 m3/d) | 2014 | Public disclosure |
| Frontier | 1 | 100,000 bbl/d (16,000 m3/d) | 2014 | Public disclosure |
