Canada Oil Sands

Canadas Oil Sands
Third Edition November 2011
CaNadas Oil saNds

Third Edition - November 2011 Writer: Robert D. Bott Editor: David M. Carson First Edition Copyright April 2000, Petroleum Communication Foundation Second Edition Copyright September 2007, Canadian Centre for Energy Information Third Edition Copyright September 2009, Canadian Centre for Energy Information All rights reserved. No portion of this publication may be reproduced in any form without the express written permission of the Canadian Centre for Energy Information. Professional elementary, secondary and post-secondary school educators may, however, use and copy portions of this publication for the limited purpose of instruction and study provided that such copies include this copyright notice. Copyright to all photographs and illustrations, except where noted, belongs to the Canadian Centre for Energy Information and unauthorized copying of this publication is prohibited.
Reviewers Third Edition

Bob McManus Alberta Energy lori adamache, Randy dobko, Nicole spears Alberta Environment stephen Rodrigues Canadian Association of Petroleum Producers Mike Burt In Situ Oil Sands Alliance don Thompson Oil Sands Developers Group
Reviewers second Edition

Janet annesley Shell Canada Limited Randall Barrett Oil Sands Environmental Management Division, Alberta Environment Brad Bellows Suncor Energy Inc. Chris dawson Petro-Canada Randy dobko Environmental Policy Branch, Alberta Environment Bob dunbar Strategy West Inc. dianne Farkouh Athabasca Regional Issues Working Group Kara Flynn Syncrude Canada Ltd. Peter Kinnear Canadian Natural Resources Limited steve Mcisaac Inside Education alberta department of Energy Bill Rennie Japan Canada Oil Sands Limited stephen Rodrigues Canadian Association of Petroleum Producers Pius Rolheiser Imperial Oil Limited Bee schadeck Devon Canada Corporation
Although the Canadian Centre for Energy Information has endeavoured to provide accurate and current information within this publication, the Centre for Energy and the volunteer reviewers do not: make any warranty or representation, expressed or implied with respect to accuracy, completeness or usefulness of the information contained within this booklet; assume any responsibility or liability to any party for any damages resulting from the negligence of the Centre for Energy in preparation of any information, method or process described in this publication; or endorse any product, service or process which may be described or implied within this publication.
Contents
seCtion 1: ResoURCes BeYonD BeLieF
5 The continental and global context 6 The nature of the resource 7 Challenges 8 Opportunities
seCtion 2: A MAssiVe tAsK
11 Mining 12 Extraction 13 In-situ bitumen 13 Steam-assisted gravity drainage (SAGD) 13 Generating steam 14 Cyclic steam stimulation 14 Vapour extraction 15 Firefloods 15 Cold production 15 Processing 16 Upgrading 17 Transportation 18 Economics 20 Energy balance 20 Products and uses
seCtion 3: toWARDs sUstAinABLe DeVeLoPMent
23 Land and biodiversity 24 Water resources 26 Local and regional air quality 27 Greenhouse gases 28 Quality of life 29 Regulation and consultation 30 Research 31 The path ahead
FoR FURtheR inFoRMAtion
32 Publications 34 Websites 35 Key definitions
C A N A D A S O I L S A N D S
THIRD eDITION NOvembeR 2011
Section 1 Resources Beyond Belief

As new sources of conventional crude oil become more difficult and expensive to find and produce, substantial investments are being made to develop the oil sands bitumen resources of Western Canada. Thick and sticky, like blackstrap molasses, oil sands bitumen is more difficult to recover, process and transport. Yet the oil sands in northern Alberta have become a major part of North American energy production and are expected to become much more important in the decades ahead.
C A N A D A' S O I L S A N D S
As of July 2011, there were 92 active mining, in-situ, primary and experimental oil sands projects in Alberta. The Alberta Energy Resources Conservation Board reports that production in 2010 averaged more than 1.6 million barrels per day, which represents about 1.9 per cent of world oil supply and more projects are proposed or under construction. ERCB estimates that production could average almost 3.5 million barrels per day by 2020 if all the current and proposed projects go ahead. This would be equivalent to about 14.1 per cent of the North American daily oil consumption in 2010 (2.2 million barrels in Canada, 19.2 million barrels in the United States, 2.1 million barrels in Mexico and 1.2 million barrels elsewhere in North America.) Canada also produced 424,576 barrels of conventional heavy oil per day in 2010. Upgraded and non-upgraded bitumen and conventional heavy oil thus accounted for more than half of Canadas crude oil production. Without this production, Canada would have been a net importer of crude oil. With it, Canada had a substantial positive energy trade balance of $50.2 billion (including natural gas and coal as well as oil) and was the largest single supplier of crude oil to the United States. Although Canada is a net oil exporter, it imported approximately 778,016 million barrels of crude oil per day in 2010. Many factors have converged to make the Alberta oil sands such an important resource in the 21st century: Experience gained through more than a century of research and four decades of commercial production Continuing development of technologies to reduce costs and environmental impacts High demand, and therefore high prices, for crude oil and refined petroleum products Taxes and royalties that are adapted to the high capital costs and long lead times of oil sands development An infrastructure of roads, pipelines and electrical power lines Managerial talent, technical expertise and skilled labour Scientific research to address the many issues arising from development and improve development processes Regulatory and consultative processes to facilitate sustainable development of both renewable and non-renewable resources Oil sands development has created many opportunities: A large new source of petroleum to meet North American and global demand Employment for Albertans and other Canadians Revenues for energy companies and governments Economic benefits for Aboriginal people and other residents of northeastern Alberta Investments in education, training, scientific research and technological development
But there are also challenges arising from development: Greenhouse gases and other air emissions, water use and land disturbance Consumption of natural gas to extract and upgrade bitumen Strain on infrastructure and labour markets due to rapid growth Inflation and delays due to high demand for crucial goods and services Effects on Aboriginal communities and traditional land uses
Oil sands deposits underlie 142,000 square kilometres of Alberta, an area larger than the island of Newfoundland or the state of North Carolina. The Athabasca oil sands area, by far the largest, is the site of all surface mining projects and most in-situ extraction projects. There are also large in-situ projects in the Cold Lake oil sands area. Development has been slower in the Peace River, Wabasca and Buffalo Head Hills deposits. The Carbonate Triangle is an area where bitumen is trapped in limestone rocks as well as sands or sandstones. Production from the Carbonate Triangle has not been considered technologically or economically feasible to date, but companies have acquired large leases there and presumably see prospects for future development. Approximately 8,000 square kilometres of bitumen resources are being evaluated in northwest and east-central Saskatchewan, and there are significant bitumen deposits on Melville Island in the Canadian Arctic. Conventional heavy oil deposits in Canada are concentrated around Lloydminster on the Alberta-Saskatchewan border, but heavy oil has also been found in British Columbia, offshore Newfoundland and Labrador, and in the Arctic Islands.
Alberta Oil Sands ALBeRtA's Projects oiL sAnDs PRojeCts

Click below to view
OIL SANDS PRODUCING PROJECT
Buffalo Head Hills Deposit
Athabasca Deposit CNRL Upgrader Syncrude Suncor Upgrader Upgrader Fort McMurray Nexen Upgrader
Alberta AREA SURFACE MINEABLE Oil Sands EXISTING PIPELINES Projects PIPELINES UNDER
CONSTRUCTION Click below to view UPGRADERS OIL SANDS PRODUCING PROJECT OIL SANDS AREA SURFACE MINEABLE AREA EXISTING PIPELINES PIPELINES UNDER CONSTRUCTION UPGRADERS
OIL SANDS AREA
Peace River Deposit Peace River Carbonate triangle Wabasca Deposit
Cold Lake Deposit
Cold Lake Scotford Upgrader Suncor Upgrader edmonton Lloydminster to West Coast and U.s. markets hardisty Husky Oil Upgrader
CANADA
CANADA
Calgary
to eastern Canada, U.s. markets and newGrade Upgrader at Regina
to U.s. markets
the continental and global context

The Canadian oil sands resource the total amount of bitumen in the ground is estimated at 1.7 trillion barrels, of which 169.3 billion barrels are considered recoverable reserves, based on current economics and technology. Eighty per cent of these reserves, approximately 135 billion barrels, can only be recovered through in-situ processes. Reserves currently under development, through both mining and in-situ methods, total 25.9 billion barrels. The recoverable oil sands reserves in northern Alberta represent a potential supply larger than the conventional crude oil reserves of Iran, Iraq or Kuwait, and are third only to those of Saudi Arabia and Venezuela. Bitumen and heavy oil resources are found in many other parts of the world, including off Canadas East Coast and in the Arctic Islands, but none of the known deposits come close to the scale of Albertas oil sands and the Orinoco heavy oil region of Venezuela. In addition, there are numerous deposits of oil shales around the world, but extracting hydrocarbons economically from oil shales has proved very difficult. However, new technologies and processes are improving the economical viability of these resources. Relatively abundant coal resources also can be gasified or converted into liquid fuels, but this poses major economic and environmental challenges. Crude oil plays a central role in the North American and world economies. Nearly all motorized transportation (except electric rail) currently depends on gasoline, diesel, jet and marine fuels refined from crude oil. Transportation fuels account for about three-quarters of current crude oil consumption. Many other products, from asphalt paving and roofing to synthetic rubber, are manufactured economically from by-products of crude oil. While alternatives such as ethanol and biodiesel can fill some of the mobile fuel demand, it would take much of the worlds cropland to supply all the transportation energy now obtained from crude oil. Conservation, efficiency gains and economic recessions can also reduce consumption, but demand for crude oil is likely to remain high well into the 21st century.
WesteRn CAnADA seDiMentARY BAsin CRoss-seCtion
the nature of the resource

Like all crude oil, Canadas bitumen resources started as living material. Hundreds of millions of years ago, the remains of tiny plants and animals, mainly algae, were buried in sea beds. As the organic materials became more deeply buried, they slowly cooked at temperatures between 50 and 150 degrees Celsius. Eventually, this process converted the materials into liquid hydrocarbons, as well as sulphur compounds, carbon dioxide and water. The liquid hydrocarbons included both light compounds those with only a few atoms of carbon surrounded by hydrogen atoms and large heavy molecules composed of many more carbon atoms and relatively fewer hydrogen atoms. Light hydrocarbons are similar to those found in gasoline, diesel and jet fuel. Heavy hydrocarbons are like those found in grease and tar. The hydrocarbons then migrated through rocks until they reached the surface or something blocked their progress. Conventional light crude oil is usually trapped in porous rocks under a layer of impermeable (non-porous) rock. In such reservoirs, the oil is not in an underground lake but rather held in the pores and fractures of rock, like water in a sponge. Oil sands are different. Geologists believe that about 50 million years ago, huge volumes of oil migrated eastward and upward through more than 100 kilometres of rock until they reached and saturated large areas of sand and sandstones at or near the surface. Bacteria then feasted on the hydrocarbons, degrading the simplest hydrocarbons first, converting them into carbon dioxide and water, and leaving behind the big hydrocarbon molecules and other substances, such as trace metals, that cannot be digested. The bacteria may also modify some of the simpler sulphur molecules, leaving complex sulphur compounds. As a result, there are more heavy hydrocarbons, complex sulphur compounds and metals in bitumen than in conventional crude oil. This makes extraction and processing more difficult and expensive. While the Athabasca oil sands are one of worlds largest known hydrocarbon resources, the volume of original crude oil digested by the micro-organisms is believed to have been at least two or three times greater than what now remains as bitumen. While bacteria were the major agent in forming Canadas oil sands bitumen, crude oil can also be degraded or altered by other factors such as oxidation, evaporation, underground water flows and loss of light hydrocarbons that migrate more easily through pores and fractures of sand Each grain in rocks. Various Water layer surrounded by combinationsisof such factors Sand particle create the a layer of water and Bitumen film a bitumen and many kinds of film of bitumen heavy oil deposits found around the world. In the Alberta oil sands, each grain of sand is surrounded by a layer of water and a film of bitumen. The water layer prevents the bitumen from being absorbed directly onto the sand surface, which allows for relatively simple extraction. In contrast, in oil shales the hydrocarbon is in direct contact with the mineral making extraction more difficult.
Each grain of sand is surrounded by a layer of water and a film of bitumen
Water layer Water layer Sand particle Sand particle Bitumen film Bitumen film
Challenges
The economic, environmental and social challenges of oil sands arise from the nature of the resource, its location, its vast scale and rapid acceleration of development since the late 1990s. The resource is different from light crude oil and requires different methods and facilities to produce transportation fuels and other commodities previously obtained from conventional crude oil. Until recently, the main producing region had a small population and modest infrastructure. The resource is so large that almost everything about its development has occurred on a huge and often unprecedented scale, although smaller in-situ projects are now becoming more common. Among some stakeholders, the recent pace of development has raised questions about sustainability. Economic challenges include inflation, shortages and delays caused by the high demand for labour, equipment and other key goods and services as multiple projects are under construction. Once production begins, labour requirements and the energy requirements in the production process have been major concerns. Projects need continual maintenance to avoid unscheduled production interruptions. As in other high-growth areas, rapid growth has put heavy burdens on infrastructure such as roads and water treatment, and new construction has had trouble keeping pace. Environmental challenges involve both the impacts of individual projects and the cumulative effects of development. Greenhouse gas emissions from production and upgrading are about 10 per cent higher than from conventional crude; however, if cogeneration is taken into consideration, oil sands crudes would have a carbon footprint similar to conventional crudes. There are also emissions of gases that can cause acid deposition and ground-level ozone or smog. Use and disposal of water are significant issues. Impacts on soils, vegetation and wildlife of the boreal forest not just from mining but also from wells, plants, roads, pipelines, electric power lines and seismic cutlines raise questions about how ecosystems can be protected during operations and reclaimed after production ceases. The soaring demand for labour and services to support the projects and the effects on the existing Aboriginal and non-Aboriginal communities are among the social challenges. The population of the Regional Municipality of Wood Buffalo, which includes Fort McMurray and most of the Athabasca oil sands region, increased by 144 per cent between 1999 and 2010 to almost 104,400. Traffic multiplied on the main highway and through the airport. Local government officials, Aboriginal communities and non-government organizations sought greater input into decisions affecting them.
Photo courtesy of Shell Canada Inc.
extraction and upgrading facilities, like the mines themselves, are on a very large scale.
Photo courtesy of JuneWarren Publishing Ltd.
The impact on ecosystems is of primary concern.
opportunities
The challenges represent opportunities for those who can find more effective and sustainable ways to do things. Lessons from four decades of commercial oil sands operations have already been incorporated into the existing projects and those under development, and new approaches are continually being introduced. As a result, Canadians have become world leaders in unconventional crude oil production, and Canadian expertise is now being applied to other bitumen resources in places such as California and Egypt. The economic opportunities employment, regional development, government revenues and export earnings are numerous. Only about 10 per cent of the Alberta bitumen resource is considered economically recoverable with current technologies, yet those reserves would be sufficient to sustain production of three million barrels per day for more than 150 years. New methods could unlock the resources currently beyond reach, including the deposits in the Carbonate Triangle. Innovation could also make existing projects much more costeffective, productive and environmentally sustainable, for both existing and new projects.
Photo courtesy of Suncor energy Inc.
Companies are also working with scientists, government authorities and forestry companies to reduce cumulative impacts on soils, vegetation and wildlife.
Creative solutions are being found to the labour shortages and supply bottlenecks that slowed projects as oil sands development accelerated. Companies have built camps to house construction workers, and some workers fly in from other provinces and fly home for rest days. With support from industry and government, community colleges and technical schools have expanded programs to train workers, and companies have stepped up in-house training. Companies have also collaborated in efforts to maximize employment opportunities, minimize competition for labour and ensure an adequate supply of skilled trades throughout construction. Construction schedules have been altered and some work postponed to avoid conflicts with other projects. Wherever possible, assembly and fabrication work is done in the Edmonton area or elsewhere outside the oil sands region. Some new upgrading facilities are located in the industrial area near Edmonton, and upgrading capacity has been built at the project sites. New pipelines are planned to carry diluted bitumen from producing areas to upgraders, and upgraded crude oil to refineries. Meanwhile, work has begun on twinning the main highway between Edmonton and the oil sands project area north of Fort McMurray, and a second highway to the Fort McMurray area was paved in 2006. The provincial government has also stepped up support for other infrastructure, water and wastewater treatment, housing, schools and health facilities in Fort McMurray. While existing projects use natural gas to provide most of the energy for operations as well as the hydrogen for upgrading, companies are developing and implementing technologies that reduce or eliminate the need for natural gas. Upgraders already capture much of the energy used for extraction as waste heat and obtain considerable energy from bitumen residues during processing, and this is expected to increase. One project obtains substantially all its heat energy from coke and bitumen combustion and gasification. Technologies are also being tested to extract bitumen underground without the need for steam heat. Other possible energy sources include Albertas large coal resources and nuclear reactors. One project has been proposed to gasify coal in central Alberta as a source of fuel and hydrogen, and there have been preliminary discussions about nuclear power options.
Photo courtesy of Devon Canada Corporation
In 2006, the Alberta government launched a public consultation process to consider economic, social, environmental and First Nations and mtis issues associated with oil sands development.
To this end, the Alberta government established the Nuclear Power Expert Panel to provide a factual report on the issues pertinent to using nuclear power to supply electricity in Alberta. That report is available online at www.energy.gov.ab.ca/Electricity/ pdfs/NuclearPowerReport.pdf. As well, the government conducted public consultation, information on which is provided at www.energy.gov.ab.ca/Electricity/pdfs/AB_Nuclear_ workbook.pdf Each project undergoes environmental assessment before approval, and regulatory authorities also consider the cumulative effects of multiple projects on regional ecosystems. Many research and development projects are underway to reduce environmental impacts. Several methods have been suggested to reduce greenhouse gas emissions. One possibility would be to inject emissions underground, known as carbon capture and storage or carbon sequestration; some of the carbon dioxide might be used to enhance production from conventional oil fields. On a per-barrel basis, greenhouse gases have been reduced 38 per cent and other emissions have been reduced substantially since the 1990s, but the recent rapid expansion of production has made further emissions reductions a high priority for companies and government authorities. Water recycling and use of non-potable groundwater already reduce impacts on freshwater resources, and new technologies may reduce the large water requirements for current oil sands production methods. Companies are also working with scientists, government authorities and forestry companies to reduce cumulative impacts on soils, vegetation and wildlife. On a per-barrel basis, most in-situ oil sands operations disturb less land than conventional oil operations. There are opportunities for people across Canada and internationally in responsible development of oil sands bitumen resources. Production reduces North Americas dependence on imports of crude oil from other parts of the world, and it makes more oil available to meet global demand. A favourable trade balance benefits Canadians. According to a study by the Canadian Energy Research Institute, over the next 25 years 9.4 per cent of total GDP impacts and 22.8 per cent of total employment from oil sands investment and operations in Alberta occurs in provinces outside Alberta. The study also indicates the federal tax impact on Alberta will be $166 billion compared to $22.4 billion for the other provinces.
many project components are fabricated elsewhere and then transported by rail or truck to the oil sands area. The above photo is a coker unit for an upgrading plant.
Section 2 A Massive Task

Conventional crude oil flows naturally or is pumped from the ground, but oil sands bitumen does not flow at room temperature and must be mined or recovered in-situ. Deposits close to the surface are mined; those more than about 75 metres below the surface require in-situ recovery. Current in-situ bitumen production generally comes from deposits more than 400 metres below the surface. Many of the technologies used in oil sands extraction are similar to those in other surface mining and conventional oil and gas operations, but they are deployed on a massive scale and sometimes in unique ways. Industry and government research and development has also led to many entirely new technologies for recovering and upgrading bitumen.
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Mining shovels dig into sand and load it into huge trucks.
Trucks take oil sands to crushers, where it is prepared for extraction. In some operations, a mobile crusher near the shovel may eliminate the need for trucks.
Hot water is added to the oil sands and then fed via hydrotransport to the extraction plant.
Bitumen is extracted from the oil sands during hydrotransport and in the separation vessels.
The tailings are pumped to the settling basin, where most of the water is recycled.
Mining
About 20 per cent of Albertas economically recoverable oil sands bitumen reserves are close enough to the surface to make mining feasible. These are all located in the Athabasca oil sands area north of Fort McMurray. An advantage of mining is that nearly all of the bitumen is extracted from the ore, while in-situ methods leave a substantial amount of the resource underground. A disadvantage is that a great deal of earth and ore must be moved, disturbing significant areas of landscape. To achieve economies of scale, the projects are very large. Each of the operating mining projects also has an upgrader on site or is connected to an upgrader by pipeline. The ore in the current projects lease areas averages about 10 to 12 per cent bitumen by weight. Thus nearly two tonnes of oil sands are dug up, moved and processed to make one 159-litre barrel of upgraded crude oil. The processed sand is then returned to the pit, and the site reclaimed. A big part of the mining operation involves clearing trees and brush from the site and removing the overburden the topsoil, muskeg, sand, clay and gravel that sits atop the oil sands deposit. This can amount to more than two tonnes of additional material that needs to be moved in the course of producing one barrel of upgraded crude oil. The topsoil and muskeg are stockpiled so they can be replaced as sections of the mined-out area are reclaimed. The rest of the overburden is used to reconstruct the landscape. The oil sands are highly abrasive and very hard on machinery. Literally tonnes of steel are worn away from the equipment each year. Regular maintenance is expensive but vital to a profitable operation. When the Suncor and Syncrude projects were built in the 1960s and 1970s, they used giant excavators called bucketwheels and draglines to dig up the oil sands ore and kilometreslong conveyor belts to move it to bitumen extraction facilities. They used this system because, at that time, the largest mining trucks carried less than 60 tonnes in a load. However, the excavators and conveyors were expensive to operate and suffered frequent breakdowns, especially in cold weather. In the mid-1980s, Syncrude started using trucks and power shovels for a portion of its oil sands mining. In 1993, Suncor switched its entire operation to a system that used the worlds largest trucks and power shovels. Each truck by then could carry up to 240 tonnes in a single load. Syncrude began phasing out its draglines and bucketwheels a few years later and retired the last of its draglines in 2006.
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By the late 1990s, the trucks in use were carrying as much as 360 tonnes, and the largest trucks today carry about 400 tonnes. The truck-and-shovel system has proven much more flexible and energy-efficient than the draglines and bucketwheels of yesteryear. The other big innovation in the 1990s was a system called hydrotransport, which uses pipelines instead of conveyors to carry oil sands to the processing plant. The trucks dump the sand into a machine that breaks up lumps and removes rocks, then mixes the sand with warm water. The resulting slurry of oil sands and hot water is transported by pipeline to the extraction plant. As an added benefit, bitumen begins to separate from sand, water and minerals as it travels from the mine to the plant. In the mid-1990s, Syncrude began lowering extraction process temperatures from the 80C that was then the customary temperature. The move to hydrotransport facilitated a reduction in process temperature to 40C, which is currently the norm. As a result, the energy requirement for bitumen extraction has been essentially halved. A new system, still in the trial stage, was introduced in 2006 and is expected to make ore transportation even more efficient. A mobile crusher, connected to a slurry pipeline, is located next to the power shovel so that the ore can be dumped in directly. Trucks would still be needed to carry overburden and to reach less accessible parts of the mines, but this system could considerably reduce the trucking requirement and related air emissions.
extraction
Froth
Water
At the processing plant, the mixture of oil, sand and water goes first to a large separation vessel. Tiny air bubbles, which are trapped in the bitumen as it separates from the sand granules, float the bitumen to the surface where it forms a thick froth at the top of the vessel. This froth is skimmed off, mixed with a solvent and spun in a centrifuge to remove remaining solids, water and dissolved salts from the bitumen. The solvent is recycled. The sand and water, known as tailings, fall to the bottom of the separation vessel. The sand is eventually sent back to the mine site to fill in mined-out areas. Water from the extraction process, containing sand, fine clay particles and traces of bitumen, goes into settling ponds. Some bitumen may be skimmed off the ponds if it floats to the surface. The sand sinks to the bottom and bacteria digest the remaining bitumen, but the fine clay particles stay suspended for some time before slowly settling. Adding gypsum helps to speed the settling process and produces a slurry called consolidated tailings (CT) for disposal in mined-out areas. Water is recycled back to the extraction plant for use in the separation process. As mining operations move further away from the main upgrading plants, some companies have started building satellite extraction facilities. The bitumen froth is then sent to the upgrader by pipeline. This reduces the round-trip distance for moving sand between the mine pit and the extraction equipment.
ReCoVeRY RAtes FoR VARioUs tYPes oF PRoDUCtion
Sand
Frothing
If you shake hot water and oil sands in a test tube, the bitumen forms a froth at the top, water collects in the middle, and sand settles to the bottom. The process is similar to that used in an old-fashioned butter churn.
Production type Conventional light oil Conventional heavy oil In-situ oil sands Oil sands mining
Recovery rate Averages about 30 per cent Up to 20 per cent 25 to 50 per cent 82+ per cent
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in-situ bitumen
More than 80 per cent of the economically recoverable oil sands bitumen is buried too deeply for surface mining. Most of this cannot be produced from a well unless it is heated or diluted. Todays major commercial in-situ projects use steam to heat and dilute the bitumen, although several other methods are being tested or deployed. Current in-situ production technologies recover between 25 and 50 per cent of the bitumen in the reservoir. This is higher recovery than most conventional light crude oil wells. Research to improve the in-situ recovery rates continues. Excluding the use of diesel as fuel for the mining equipment and trucks, mining operations may use less energy and water than in-situ operations on a per barrel basis. In-situ does use substantially less surface area, is reclaimed faster and requires far less reclamation after operations cease. Research and pilot operations are currently underway which will dramatically reduce the energy and water consumption for in-situ oil sands development. There are two principal in-situ steam injection methods used in Canada today. The choice between them depends on the characteristics of the reservoir.
steam-assisted gravity drainage (sAGD)

Most of the other current in-situ projects, particularly in the Athabasca oil sands area, use steam-assisted gravity drainage (SAGD). In this method, pairs of horizontal wells, one above the other, are drilled into an oil sands formation, and steam is injected continuously into the upper well. As the steam heats the oil sands formation, the bitumen softens and drains into the lower well. Pumps then bring the bitumen to the surface.
Oil production
Steam injection
Generating steam
Existing in-situ projects use natural gas-fired boilers to generate Reservoir steam, consuming between 1,000 and 1,200 cubic feet of natural gas to produce each barrel of bitumen or about twice as much as the mining-upgrading projects use to produce a barrel of synthetic crude oil. In 2010, natural gas consumed by oil sands producers was 713.3 billion cubic feet, up 4.5 per cent from 2009. This represents 13.4 per cent of total Canadian marketed natural gas production. This gas use includes natural gas required for electricity generation. However, in-situ developments do not require the use of diesel fuel to run equipment in their operations, like typical mining development and therefore do not have that energy requirement or the associated emissions. Technologies have been developed to use crude bitumen as a fuel if needed for steam generation. Additionally, some projects are using by-products of bitumen upgrading, such as asphaltenes and carbon residue or coke. Most of these methods would increase emissions of air contaminants, such as particulates, oxides of sulphur and nitrogen, and greenhouse gases compared to natural gas; however, new technologies are being developed to capture and store carbon dioxide and manage the other air contaminants.
Steam Chamber
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Cyclic Steam Stimulation

Steam saturates the oil sands formation, softening and diluting the bitumen so it can flow to the well during the production phase.
Cyclic steam stimulation

Cyclic steam stimulation is used at Imperial Oils Cold Lake project, Canadas largest in-situ bitumen producer, and at Canadian Natural Resources Limiteds Wolf Lake Primrose project. In this method, high-pressure steam is injected into the oil sands formation for several weeks. The heat softens the bitumen, while the water helps to dilute and separate the bitumen from the sand grains. The pressure also creates channels and cracks through which the bitumen can flow to the well. When a portion of the reservoir is thoroughly saturated, the steam injection ceases and the reservoir soaks for several weeks. This is followed by the production phase, when the bitumen is pumped up the same wells to the surface. When production rates decline, another cycle of steam injection begins. This process uses vertical, deviated and horizontal wells and is sometimes called huff-and-puff recovery. Shell Canada uses a similar method, with horizontal wells, in the Peace River oil sands area.
STAGE 3 PRoDUCtion Heated oil and water are pumped to the surface. STAGE 2 soAK PhAse Steam and condensed water heat the viscous oil. STAGE 1 steAM injeCtion Steam is injected into the reservoir.
Vapour extraction
One technology that could reduce energy requirements is called vapour extraction or VAPEX. In this method, pairs of parallel horizontal wells are drilled as in SAGD, but instead of steam, natural gas liquids such as ethane, propane or butane are injected into the upper well to act as solvents so the bitumen or heavy oil can flow to the lower well. An industry-government consortium is currently evaluating a VAPEX pilot project at the Dover lease northwest of Fort McMurray, and the technology is also being tested by several operators on their own leases. A number of other in-situ production systems, including solvents, electric currents, microwaves and even ultrasound, have been tried on an experimental scale.
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Firefloods
There has been some production of heavy oil and oil sands bitumen with firefloods in which air or oxygen is injected and part of the resource is ignited to heat the reservoir. Petrobank Energy and Resources Ltd. is using a variation on the fireflood method near Christina Lake, south of Fort McMurray in the Athabasca oil sands region; the system is called toe-to-heel air injection or THAITM. This process uses no natural gas for production and very little water, thereby substantially reducing the GHG emissions and overall environmental footprint of in-situ production.
Injection well
Combustion zone Coke zone
Mobile oil zone
Production well connected to gathering system
Pipe perforated in injection zone Air

Fronta l adva
Toe
nce
Cold heavy oil
Cold production
Pipe perforated from toe to heel
Heel
Conventional production methods using vertical and horizontal wells have also been used, primarily in the Cold Lake oil sands but also in the Athabasca and Peace River oil sands, where deposits are considered too thin to make steam injection economic. This production method is also known as CHOPS (cold heavy oil production with sand). Technologies such as progressive cavity pumps have improved the effectiveness of these cold production methods.
Toe-to-heel air injection

Air or oxygen is injected and part of the resource is ignited to heat the reservoir.
Processing
In-situ bitumen processing involves using water to separate the bitumen from water and sand. In-situ use of surface water has remained relatively constant, but the total volume of groundwater allocated and used is increasing substantially, doubling between 2002 and 2007, with saline ground water use growing and expected to meet up to 40 per cent of total in-situ water requirements in the future. Devons Jackfish project currently uses 100 per cent saline water. In-situ projects that use saline water from deep formations also treat the water after use and then re-inject it into these same formations, so as to not impact the surface or groundwater systems. Up to 90 per cent of the water is recycled, with the remainder injected underground if it cannot be used in operations. Solids may be landfilled, injected underground or used to surface roads. After processing, the bitumen is diluted with condensate (pentanes and heavier hydrocarbons obtained from natural gas processing) and the mixture is shipped by pipeline to an upgrader or refinery.
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Upgrading
Compared to conventional light crude oil, bitumen typically contains more sulphur and a much higher proportion of large, carbon-rich hydrocarbon molecules. All operating mines have integral upgraders and 100 per cent of mineable production is upgraded within Alberta. In 2010, about 15.3 per cent of in-situ production was upgraded in Alberta, with most of the rest being upgraded elsewhere in Canada or shipped to the U.S. for upgrading. Currently only a very small portion of bitumen is shipped to Asian markets. Upgrading is the process that converts bitumen into a product with a density and viscosity similar to conventional light crude oil. This is accomplished by using heat to crack the big molecules into smaller fragments. Adding high-pressure hydrogen and/or removing carbon can also create smaller hydrocarbon molecules. Most of the energy for upgrading is obtained from byproducts of the process. Upgrading is usually a two-stage process. In the first stage, coking, hydro-processing, or both, are used to break up the molecules. Coking removes carbon, while hydro-processing adds hydrogen. In the second stage, a process called hydrotreating is used to stabilize the products and to remove impurities such as sulphur and nitrogen. The hydrogen used for hydro-processing and hydrotreating is produced from natural gas and steam.
If the upgrading process includes coking, the coke is removed from the bitumen and used for industrial applications. Another upgrading process adds hydrogen to the bitumen and breaks up the large hydrocarbon molecules a process called hydrogen-addition or hydrogen-conversion. Hydrocarbons are stabilized by adding hydrogen in the presence of catalysts. After stabilization, the hydrocarbons are separated into naphtha, kerosene and gas oil.
Utilities plants provide steam, nitrogen, oxygen, potable water and electricity.
Sulphur can be recovered to be used in fertilizer and other products.
A range of products including light sweet and sour crude oils and diesel products are blended and shipped to markets.
Upgrading produces various hydrocarbon products that can be blended together into a custom-made crude oil equivalent, or they can be sold or used separately. The Syncrude and Suncor mining projects use some of their production to fuel the diesel engines in trucks and other equipment at their operations. Suncor also ships diesel fuel by pipeline to Edmonton for sale in the marketplace. Upgraders in Canada remove most of the sulphur from bitumen. Since sulphur may be about five per cent of the raw resource, large volumes of this by-product are produced. The Alberta Energy Resources Conservation Board expects annual sulphur production from oil sands projects to rise from about 1.74 million tonnes in 2010 to about 3.07 million tonnes in 2020. Sulphur is used in the manufacture of fertilizers, pharmaceuticals and other products. Unsold sulphur is stockpiled. Those operations that use coking also market or stockpile the coke, which contains some sulphur as well as carbon.
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Co-generation is the simultaneous production of electricity and heat energy from a single facility. All of the oil sands mining operations, and several of the larger in-situ projects, include natural gas or synthetic gas-fired co-generation. The electricity is used to meet the projects own energy needs, such as operating mine machinery and in-situ well pumps, and any excess power is sold to the provincial power grid. The heat energy is used to separate bitumen from sand whether at the extraction plants in the mining operations or by steam injection at the in-situ projects. Co-generation produces fewer air emissions per unit of energy produced compared to other thermal-electric generating facilities. Upgrading can occur at the producing site, adjacent to a refinery or anywhere in between. The choice of location for upgrading depends on several factors: Capital and operating costs of the upgrader at one location relative to another Potential synergies of locating an upgrader near to or in association with other corporate assets such as a refinery Transportation costs Diluent cost and availability crude bitumen has to be diluted to flow through pipelines Pumping costs diluted bitumen requires more energy to pump than conventional or upgraded crude Marketing conditions
Product tanks store refineryready feedstock and diesel fuel that is shipped by pipeline to customers in commercial and industrial markets throughout North America.
transportation
Pipelines are the least expensive and most efficient way to move petroleum products over land. Upgraded synthetic crude oil has a density of about 850 kilograms per cubic metre (about 34 degrees on the America Petroleum Institute gravity scale), similar to the vegetable oil in our kitchens, and is shipped through pipelines just like the conventional light crude oil it resembles. Moving bitumen by pipeline is a challenge due to its high viscosity (resistance to flow, or stickiness). Large-diameter pipelines with powerful pumps help, but producers also lower the density and viscosity of the bitumen by diluting it with a light, low-viscosity petroleum product such as condensate, conventional light crude oil or synthetic crude oil. Some bitumen must be diluted by as much as 40 per cent to flow through a pipeline. The most common diluent for oil sands bitumen is condensate, a mixture of pentanes and heavier hydrocarbons obtained from natural gas processing. Supplies of condensate in Western Canada are limited. Some pipeline systems already include return lines to carry condensate back upstream for re-use. A recent alternative uses synthetic crude to dilute bitumen for shipment; the two fluids are separated before processing at the downstream end. Other proposed solutions involve pipelining imported condensate from the U.S. Midwest or Canadas West Coast for use as diluent. As bitumen production has increased, there have been periodic shortages of condensate and light oil available for dilution. This is one reason why upgraders in Western Canada increased their processing capacity. Bitumen can also be shipped by truck, but again it must be diluted or heated first. Trucks are used mainly to carry production from small or experimental operations to the nearest upgrader or pipeline terminal.
Sand is mined using shovels with buckets that hold 100 tonnes, loading 400 tonne trucks.
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economics
Oil sands development depends mainly on two factors: the cost of producing and transporting the products, and the price buyers are willing to pay. Crude oil prices are determined by global supply and demand and change with the weather, politics and other factors. For Western Canadian producers, refining capacity and competition in the midcontinental U.S. and Canadian markets are also key considerations. Operating costs the labour, natural gas and other goods and services needed to produce a barrel comprise about half of the supply cost for producers. In addition, companies have to earn enough to repay the capital they invested in the project, pay royalties and taxes to government, reclaim the sites and set aside funds for research, maintenance and new developments. The developers have invested billions of dollars in the projects, and they must attempt to earn a competitive return on this investment. Judging by the scale of current and proposed activity, companies generally believe that oil sands projects are worthwhile long-term investments. A number of factors affect the profitability of oil sands projects. Major influences include the exchange rate of the Canadian dollar, fiscal terms and operating expenses such as initial capital costs, crude prices and natural gas, material and labour costs. As well, because of unique challenges, different projects will have differing operating costs. The operating costs for conventional light oil in Western Canada are considerably lower than for upgraded oil sands bitumen, but conventional producers also have to invest continually in exploration for new reserves, which can add substantially to their costs. After a few years of production, the volume produced from a conventional well begins to decline and the operating costs start to rise, whereas this is not the case with oil sands mining. Operating costs in the oil sands mining projects are partly dependent on the price of natural gas used to generate steam and electricity and to produce hydrogen in associated upgrading facilities. If ways can be found to reduce or eliminate natural gas use, then costs could be reduced significantly. Wages and salaries are another major component of operating costs for mines and upgraders as they employ large numbers of skilled workers. The operating costs to produce oil sands bitumen vary considerably. In 2011, the Alberta Energy Resources Conservation Board estimated plant gate supply costs of $47 to $57 per barrel for steam-assisted gravity drainage projects, compared to $63 to $81 per barrel for stand-alone mining projects and $88 to $100 per barrel for integrated mining and upgrading projects. The Canadian Energy Research Institute (Study 122) estimated the cost for new SAGD and stand-alone mining projects at $93 per barrel and integrated mining and upgrading projects at $100 per barrel. The amount of natural gas used to generate steam and the recovery rate are the key factors. The availability of condensate and light oil to dilute bitumen can also affect markets for these products. The price of bitumen generally increases in the spring and summer when a lot of road-building and construction activity requiring asphalt is under way. The spread between the price of heavy and light oils is called the differential. The provincial government, which owns the mineral rights to virtually all of the oil sands resources, has recognized the long-term benefits of development in shaping royalty arrangements for their owners share of revenues from oil sands. Alberta established a stable generic oil sands royalty system in 1997 after decades of negotiating project-byproject arrangements. Under the generic system, the province collected one per cent of
Photo courtesy of Syncrude Canada Ltd.
The high demand for labour in the oilsands region has also alleviated unemployment across the country.
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gross sales revenues on all production and a 25 per cent share of net project revenues after the operator recovered capital costs to build the project. In 2009, the government introduced its New Royalty Framework, consisting of price-sensitive royalty rates linked to the price of West Texas Intermediate crude oil in Canadian dollars. For projects that havent recovered capital costs incurred to construct the project, gross royalty rates start at one per cent when oil is priced at $55 per barrel or less, and increase to a maximum of nine per cent when oil is priced at $120 per barrel or more. For projects that have recovered start-up coats, net royalty rates start at 25 per cent when oil is priced at $55 per barrel or less, and increase to a maximum of 40 per cent when oil is priced at $120 or more. The goals of the new Royalty Regime are as follows: Support sustainable economic development that contributes to a high quality of life for all Albertans now and into the future Support a fair, predictable and transparent royalty regime Align Albertas royalty regime with overall government objectives More information is available at http://www.energy.gov.ab.ca/OilSands/808.asp One economic benefit of oil sands development is the ongoing stable employment and significant maintenance capital expended throughout the entire life of the project, in contrast to the ups and downs of conventional oil operations. This was an important consideration cited by the governments when they implemented the generic royalty and tax regimes. Though the economic effects of oil sands development are concentrated in Alberta, they also spread across the country and internationally through purchases of equipment, materials and services. Companies and workers pay taxes to the federal government, and Alberta is a major contributor to equalization payments that aid poorer provinces. According to the Canadian Energy Research Institute (Study 124), oil sands tax revenue across the country will total $444.2 billion over the next 25 years, $321.8 billion of which will go to the federal government. The high demand for labour in the oil sands region has also alleviated unemployment across the country. People from Atlantic Canada, for example, now account for more than one-quarter of the population in Fort McMurray.
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energy balance
The energy balance is simply the ratio between energy inputs and outputs for a given type of energy production. Energy balances are used as indicators of efficiency when comparing energy types and production methods. Based on National Energy Board data for natural gas inputs and petroleum outputs, the energy balance for oil sands mining-upgrading projects is about 1:12 and it is about 1:6 for in-situ bitumen production. In addition, about 14 per cent of the raw bitumen is consumed to produce energy during upgrading or is converted into by-products such as coke and sulphur. As a result if the raw bitumen from in-situ projects is then upgraded into synthetic crude oil, the energy balance is as low as 1:4. The energy balance for oil sands is roughly comparable to that for ethanol produced from sugar cane in Brazil where one unit of energy input produces about eight units of ethanol fuel energy and it is much better than ethanol produced from corn in North America, where one unit of energy input only produces about 1.3 units of ethanol fuel energy. Since the early 1990s, energy use per barrel in oil sands mining and extraction has been reduced about 45 per cent through the use of new technologies such as hydrotransport, which is more efficient than conveyors or truck transport. New, low-temperature extraction processes further reduce energy use.
Products and uses

Upgraded synthetic crude oil is a conventional light oil equivalent. The most common products made from upgraded synthetic crude oil are transportation fuels such as gasoline, diesel and jet fuel. Others include petrochemicals used in making synthetic rubber and polystyrene. When bitumen is processed in refineries, it also produces transportation fuels and some petrochemicals, as well as the asphalt needed for road paving and roofing. Sulphur, which comprises about five per cent of oil sands bitumen, is a major by-product of oil sands upgrading. The decision to sell or stockpile sulphur for future sale is dependent on world sulphur markets and the availability of storage space. Until recently, Syncrude stockpiled most of its sulphur at the upgrader site, but in 2005 Syncrude sold sulphur from its stockpile for the first time in 10 years, and the company is now producing fertilizer from its sulphur. Suncor and other companies have sold most of their sulphur production on international markets despite low prices and high transportation costs for the commodity. Canada is the worlds largest producer and exporter of elemental sulphur, which is also obtained from sour gas production. By 2018, however, upgraders could generate as much as 3.3 million tonnes of sulphur per year. To address this issue, several countries have been identified as potential markets since sulphur can be used to make fertilizer. Canadian supply to the United States rose 116.5 per cent in 2010 compared to 2009. Other countries to which export increased in 2010 include Australia, South Africa and Israel. Although exports to China decreased 37.7 per cent in 2010 over 2009, the value of sulphur exports to China increased 33 per cent to $178 million. Sulphur is also used in other industries such as pharmaceuticals and synthetic rubber. Some sulphur is currently used in road asphalt and potentially could be used in concrete or other construction materials.
Common products made from upgraded crude oil, other than transportation fuels, include petrochemicals used in making synthetic rubber and plastics.
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Section 3 Towards Sustainable Development

Like many types of resource development, oil sands projects affect land, air and water and the human, plant and animal life they sustain. As ecological knowledge and environmental awareness have grown over the years, companies and government authorities have sought better ways to reduce or eliminate such effects. This helps to ensure the highest possible quality of life for industrys workers and those who reside near its plants, while also reducing impacts on regional and global ecosystems.
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The Alberta and federal governments and the petroleum industry generally subscribe to the concept of sustainable development, defined as development that meets todays needs without compromising the ability of future generations to meet their needs. As the pace of oil sands development began to accelerate in 1999, the Alberta government announced the Regional Sustainable Development Strategy for the oil sands area of northeastern Alberta. The strategy defined sustainable development this way:
"Under sustainable development, renewable resources are managed to ensure their long-term viability and potential future use. Non-renewable resources are managed to maximize their benefits. Sustainable development takes into account the interdependence of trees, minerals, wildlife, water, fish, range lands, public lands, plants and other similar resources... It considers the economic effects of environmental decisions, and the environmental effects of economic decisions."
To implement the strategy, multi-stakeholder task forces brought together industry, different levels of government, non-governmental organizations, Aboriginal communities and local businesses and other interests. They sought coordinated approaches to issues such as health care, infrastructure and air quality as well as the cumulative effects from so much development occurring so rapidly, most of it in one geographical area. In 2006, the Alberta government conducted public consultation through the oil sands Multi-Stakeholder Committee (MSC), to consider economic, social, environmental and First Nations and Mtis issues associated with oil sands development. Phase I of the process set out a vision and principles for oil sands development. Phase II sought public input on implementing the vision and principles, and included separate, parallel First Nations and Mtis consultation focusing on potential adverse impacts of oil sands development on constitutionally protected rights and traditional land uses. Information gathered by the MSC supplemented previous public and interest-group input that has been ongoing since commercial oil sands operations began. The MSC reached consensus on 96 of 120 recommendations regarding Aboriginal consultation, minimizing the impact of oil sands on biodiversity, improving land reclamation, the need for protected areas, planning and monitoring processes, and retention of a larger share of related, value-added processing. It failed to reach consensus on the pace of development, water use, targets for greenhouse gas emissions, limiting the amount of land available for oil sands projects, and royalties and taxes. The Multi-Stakeholder Committee Final Report and the Aboriginal Consultation Final Report were published in 2007 and are available at www.oilsandsconsultations.gov.ab.ca
Photo courtesy of Syncrude Canada Ltd.
Several hundred wood bison graze on the Syncrude site as part of a long-term reclamation project co-managed with the nearby Fort mcKay First Nation.
Aboriginal people, who have inhabited the oil sands region for thousands of years, have a special interest in how development proceeds. While they have gained many opportunities through direct employment and the creation of Aboriginal-owned businesses, they have also expressed concern about the impacts of development on their communities, the environment and traditional land uses. In December 2008, the Alberta government released the Land-use Framework, which sets out an approach on how to better manage public and private lands and natural resources in
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light of achieving Albertas long-term economic, environmental and social goals. The Lower Athabasca Regional Plan will identify and set resource and environmental management outcomes for air, land, water and biodiversity, and guide future resource decisions while considering social and economic impacts. In February 2009, Alberta released Responsible Actions, a 20-year strategic plan for Albertas oil sands, which addresses the economic, social, environmental, research and innovation, and governance needs of Albertas oil sands regions. The plan will form a new provincial and regional approach to managing the oil sands regions. The plan was based on extensive stakeholder consultations described in Investing in our Future: Responding to the Rapid Growth of Oil Sands Development, the Multi-Stakeholder Committee Final Report and the Aboriginal Consultation Final Report. Responsible Actions also builds on existing Alberta government policies, programs and initiatives, particularly the Provincial Energy Strategy and Land-use Framework.
Photo courtesy of Shell Canada Inc.
Scientific studies are underway to determine how much water can be withdrawn from the Athabasca River without negative effects.
Land and biodiversity

As Canadas largest mines, the Athabasca oil sands projects affect thousands of hectares of boreal forest, wetlands, watersheds and muskeg. However, only four per cent of Canadas 310 million hectare boreal forest is underlain by oil sands. Approximately 2.5 per cent of that land, or 0.1 per cent of the boreal forest, is mineable. As at October 2011, 71,500 hectares had been disturbed. During operations, as well as when mining is completed, the developers are required to restore the mine sites to at least the equivalent of their previous biological productivity. Reclamation is an ongoing process with initial reclamation work commencing as soon as three years after the land is first disturbed. This does not mean tree-by-tree restoration, but rather that the region as a whole should form an ecosystem with a productive capacity equal to or greater than that which existed before development. How is this done? Before operations begin, environmental scientists record existing soil types and plant and animal species in a detailed Environmental Impact Assessment or EIA. Trees that must be harvested are sent to nearby lumber or pulp mills. Muskeg and topsoil are removed and stockpiled. Sand from the processing facility is returned to mined-out areas. After an area is mined, topsoil and overburden are replaced, and an annual ground cover such as barley is planted to stabilize the soil. The surface is then replanted with trees, shrubs or grasses. When the area meets the provincial governments standard for reclamation the land is certified and it is officially returned to the Province and is no longer under the control of the oil sands project. Once a certificate is granted the land reverts back to the crown, would be available for public access and would be unavailable to the oil sands project. Syncrude and Suncor have reclaimed 4,900 and 1,300 hectares respectively and have planted more than 8.5 million trees. Another 80 hectares has been reclaimed by Canadian Natural Resources Limited and 16 by Shell Canada. Only Syncrude has received certification for reclaimed land, a 104-hectare area known as Gateway Hill. Applications for certification are generally not submitted until the reclaimed land is no longer integral to a companys operations as the companies want to maintain control over these areas. Several hundred wood bison graze on the Syncrude site as part of a long-term reclamation project co-managed with the nearby Fort McKay First Nation. The bison project is the result of Syncrudes research efforts into reclamation techniques that will also create productive wildlife habitats. Wood bison were chosen as a focus because the species was native to the
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area until their near extinction in the 1800s, and played an important role in the economy and culture of Aboriginal communities. Only Syncrudes 104-hectare parcel of land known as Gateway Hill has been issued a certificate by Alberta Environment to date (2009). Research and development to address land issues is continuing. Among the issues for upgraders are the long-term disposal or utilization options for their stockpiles of sulphur and coke.
Settling ponds allow clay and silt to settle out of the water used in the extraction process. A number of improvements have been made to the design and operation of in-situ oil well casings.
The use of slanted and horizontal wells greatly reduces the land disturbance associated with in-situ bitumen projects. One surface installation, known as a pad, may contain up to 10 well pairs producing from formations with a radius of more than a kilometre. Insulated, above-ground pipelines carry steam and bitumen among facilities and well locations at in-situ projects. When production ceases, regulations require that the wells be sealed with cement and the biological productivity of the site be restored. In-situ reclamation is similar in scale and timing to conventional oil reclamation. Mining and in-situ oil sands projects, related seismic programs, roads, pipelines and electrical power lines disturb substantial areas of boreal forest. The linear disturbances fragment the landscape and affect wildlife habitat. An approach called Integrated Landscape Management, developed by the Alberta Chamber of Resources in the late 1990s, brings together oil companies and forestry companies to reduce their cumulative impacts on landscapes, forest productivity and wildlife through measures such as narrower seismic cutlines and coordinated planning to reduce the number of roads. Meandering cutlines reduce line-of-site corridors for predators, and on-site mulching of wastes speeds reclamation. Research is also underway to improve reforestation of reclaimed sites.
Water resources
The National Energy Board estimates that between two and 4.5 barrels of water are needed to produce a barrel of oil sands bitumen in oil sands mining operations. Most of this, up to 90 per cent in some cases, is recycled, and industry is working to reduce water use overall. Some water is also returned to the hydrosphere through evaporation. In-situ development is required by the provincial environmental and energy agencies to use brackish or nonpotable groundwater for production. Most of the water utilized in oil sands mining comes from surface water bodies, typically large adjacent rivers. Scientific studies were conducted to determine how much water can be withdrawn from the Athabasca River and other watersheds without negative effects on fish and aquatic life. The total annual allocation of water from the Athabasca River for all uses (e.g., municipal, industrial and oil sands) is less than 3.2 per cent of flow. This compares to 37 per cent for the North Saskatchewan River (Edmonton), 60 per cent for the Oldman River (Southern Alberta) and 65 per cent for the Bow River (Calgary). Current oil sands mining projects use about one per cent of the total annual water flow of the Athabasca River. Should all existing, approved and announced oil sands projects proceed, industry would use 2.2 per cent of the Athabasca river flow. Industrys withdrawal of water from the Athabasca River is capped during periods of low river flow to protect the aquatic ecosystem.
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The industry-funded, multi-stakeholder Regional Aquatics Monitoring Program (RAMP) has been assessing regional watersheds, fish populations and aquatic ecosystems in the Athabasca oil sands area since 1997. In 2010, RAMP reported that differences between baseline flow rates and 2009 flow rates were negligible to low at eight test sites, moderate at one test site and high at four. Similarly, differences between baseline water quality conditions and 2010 water quality conditions at test sites were negligible to low at all 17 test sites. Differences in invertebrate populations were negligible to low at six test sites, moderate at six test sites and high at two sites. The federal Fisheries Act requires that developers compensate for loss of fish habitat. The ratio for compensation is at least two-to-one; that is, for each unit of habitat lost, at least two units of equivalent habitat must be created, restored or protected elsewhere in the region. The tailings ponds at oil sands mining projects pose additional challenges. In the extraction process at the mining projects, the water picks up tiny particles of clay. Ponds are used to hold the resulting tailings, a mixture of clay, water and trace amounts of unrecovered bitumen. Oil sands mining developers are using various methods for managing the tailings over the long term. Tailings ponds are not used in in-situ projects. There are two methods of reclaiming tailings ponds, water-capped lakes and solid landscapes. With water-capped lakes, a layer of fresh water is placed over the tailings; this water cap could function as a normal aquatic ecosystem while the clay particles slowly drift to the bottom. Because there is still some debate about whether the settling ponds can become biologically productive ecosystems over the long term, the developers are continuing to study the matter. With solid or dry landscapes, gypsum is used to accelerate the settling time and create consolidated tailings. Without the gypsum, the coarse sand fraction of the tailings settles out faster than the finer clays, which may take some years to form mature fine tailings, a mixture of water and 30 per cent solids. In the consolidated tailings process, the tailings stream is hydrocycloned to separate the coarse sand fraction from the fine tailings and water. The sand is then mixed with mature fine tailings and gypsum to form an unsegregated, stable mixture that consolidates to approximately 80 per cent solids in less than one year. Calcium-rich water released from the concentrated tailings is added to the fine tailings from the cyclone process to accelerate settling and produce more consolidated fine tailings which are in turn mixed with sand and gypsum. In-situ projects have made a continuing effort to reduce water use through increased recycling. Developers are required to use brackish (non-drinkable) water from underground aquifers to meet part of their water needs.
Photo courtesy of enCana
Another issue for in-situ operations is the possibility that casing failures in steaming operations could contaminate water supplies in underground aquifers. In the Cold Lake area, investigations of the impacts of casing failures on groundwater quality found the effects were restricted to the immediate vicinity of a casing failure. Produced fluids released into an aquifer from a casing failure are recovered by pumping back the released fluids. A number of improvements have also been made to the design and operation of in-situ oil well casings. These improvements reduce the number of future casing failures and
Carbon sequestration not only dispose of C02 safely, it reduces greenhouse gas emissions. In some conventional oilfields, the carbon dioxide from oil sands emissions could be used to enhance oil recovery.
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minimize their consequences. For example, by detecting breaks earlier, when they are the size of pinholes, the amount of fluid that may be released into a groundwater aquifer is significantly reduced. In the late 1990s, an extensive investigation of groundwater quality around in-situ heavy oil operations was conducted by Komex International Ltd. and Imperial Oil. The study found that regional groundwater quality had not been affected by in-situ operations. The study also recommended that the monitoring of groundwater quality be enhanced. The enhanced monitoring systems determine groundwater conditions prior to new developments, as well as monitor groundwater quality during the operating life of the development.
Local and regional air quality

Oil sands mining, processing and upgrading produce emissions that affect air quality. New technology and more efficient operations have greatly reduced emissions per barrel of production, but the rapid increase in production has led to increases in some emissions such as oxides of nitrogen (NOx). Alberta authorities have stated that they will be watching closely the cumulative effect of air emissions. Between 1990 and 2010, the annual average NOx concentration increased between 18 and 36 per cent at monitoring stations in the Ft. McMurray area. However, mean annual NOx concentrations in the oil sands regions remain below those in Edmonton and Calgary and are well below regulatory limits. NOx emissions contribute to acid deposition and also combine with volatile organic compounds and particulate matter in the presence of sunlight to form ground-level ozone or smog. According to Environment Canada data, oil sands accounted for 5.5 per cent of Albertas total emissions of NOx in 2010. Companies have committed to use best available technology economically achievable to reduce NOx emissions. For example, new truck engines emit considerably less NOx and gas-fired heaters must comply with strict low-NOx emission standards. Emissions of sulphur compounds and hydrocarbons also affect local air quality. Syncrude and Suncor have reduced these by capturing gases formerly released into the atmosphere or burned in open flares. The gases are captured in flue gas desulphurization units that produce sulphur for use in making gypsum (Suncor) or fertilizer (Syncrude). Upgraders remove up to 99.8 per cent of the sulphur from bitumen by converting it into elemental sulphur or retaining it in the coke byproduct, so it is not released with endproduct combustion. The remaining sulphur is released into the atmosphere as sulphur dioxide (SO2). This may combine with water vapour to form sulphurous acid or sulphuric acid and contribute to acid deposition that affects forests and water resources. According to Environment Canada data, oil sands projects accounted for 35 per cent of Albertas total sulphur dioxide emissions in 2010. The Wood Buffalo Environmental Association monitors air quality in Fort McMurray and the surrounding area. Monitoring includes continuous air quality data and periodic air samples. Air quality in the region generally compares favourably with that of Alberta cities such as Edmonton, Calgary and Fort Saskatchewan. Monitoring results in 2008 showed: The one-hour average readings for sulphur dioxide in Fort McMurray, Fort McKay and Fort Chipewyan were below provincial objectives for ambient air quality There were two exceedances of the one-hour provincial objectives for sulphur
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dioxide in areas close to the oil sands facilities There was one exceedance of the 24-hour provincial objectives for sulphur dioxide There were no exceedances of the one-hour provincial objective for nitrogen dioxide, carbon dioxide, ammonia, ozone or particulate matter There were 614 exceedances of the one-hour average provincial objective for hydrogen sulphide There were 118 exceedances of the 24-hour average provincial objective for hydrogen sulphide The Wood Buffalo Environmental Association also operates the Terrestrial Environmental Effects Monitoring (TEEM), an ecological monitoring program that samples bogs, fens, lichens and other plant growth to monitor nitrogen and sulphur. The Cumulative Environmental Management Association (CEMA) has developed management frameworks for terrestrial ecosystem, land capability, ozone management, landscape design, acid deposition, ecosystems management, trace metals and nitrogen. In all the oil sands areas, including Cold Lake and Peace River as well as Athabasca, monitoring through 2008 showed that air quality was rated good more than 95 per cent of the time.
Greenhouse gases
Oil sands operations also emit large amounts of carbon dioxide and some methane. These are among the heat-trapping greenhouse gases that affect global climate. In 2008, oil sands facilities were the third largest source of reported GHG emissions in Alberta tied with transportation accounting for 15 per cent or 36.6 megatonnes of total GHG emissions (carbon dioxide equivalent) in the province. The utilities sector was the largest source of greenhouse gas emissions in Alberta with 58.6 megatonnes or 24 per cent of total reported GHG emissions. In 2007, Alberta became the first jurisdiction in North America to legislate GHG reductions for large industrial facilities. Any facility, including oil sands, that emits more than 100,000 tonnes of GHG per year is required to reduce their emissions intensity by 12 per cent from 2003-2005 levels starting in 2007. Facilities that fail to meet this target have the option of buying Alberta-based carbon offsets, or paying $15 per tonne over reduction targets into the Climate Change and Emissions Management Fund. The fund supports projects and technologies aimed at reducing GHG emissions in the province. As part of the long-term climate change plan Alberta plans to cut projected greenhouse gas emissions by 50 per cent or 200 megatonnes of carbon dioxide equivalents by 2050. It translates to real reductions of 14 per cent below 2005 levels. To date, more efficient use of energy has been the main strategy to reduce greenhouse gas emissions from oil sands. Research is underway into the possibility of capturing carbon dioxide emissions from oil sands plants and injecting them underground, which is known as carbon capture and storage (CCS) or carbon sequestration. In some conventional oilfields, the carbon dioxide from oil sands emissions could be used to enhance oil recovery. Alberta is the first jurisdiction in North America to direct dedicated funding to implement carbon capture and storage across industrial sectors. CCS is forecast to deliver about 70 per cent of the long-term climate change plans projected 200 megatonnes carbon dioxide equivalentreduction by 2050, with the majority of those reductions coming from activities related to oil sands production.
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Offsets are another option to reduce global greenhouse gas emissions. Offsets are reductions in emissions that are caused by an activity not directly related to the source creating the emissions. Planting millions of trees to absorb carbon dioxide creates an offset for whoever plants the trees. In an emissions-trading system, carbon dioxide offsets can be traded on an emissions market. From a global perspective, what matters is the total amount of greenhouse gases emitted during a products wells to wheels life cycle from extraction to the final use by a consumer. According to two independent studies commissioned by the Alberta Energy Research Institute released in 2009, greenhouse gas emissions from the oil sands are about 10 per cent higher than direct emissions from other crudes in the United States. However, if cogeneration is taken into consideration, greenhouse gas emissions from oil sands are similar to those from the other crudes. The studies, Life Cycle Assessment Comparison of North American and Imported Crude, researched and authored by Jacobs Consultancy Canada Inc. and Comparison of North American and Imported Crude Oil Lifecycle GHG emissions, researched and authored by TIAX LLC, were conducted in 2008. The studies also indicated that greenhouse gas emissions from conventional crudes are rising because of the increasing reliance upon heavier crudes that are more difficult to produce. Conversely, greenhouse gas emissions from oil sands crudes are decreasing because of technological advances.
Quality of life
Tens of thousands of new jobs come from oil sands development. Workers and their families have flocked to the oil sands region and elsewhere in the province. While this growth has been a boon for these individuals, it puts great pressure on public services, housing and infrastructure. Many businesses had trouble finding and keeping staff. During consultations in 2006, some Albertans, including the mayor of Fort McMurray, urged a slowdown in oil sands development so that other sectors could keep pace. In 2008 and 2009, the pace of development did slow due to economic conditions that caused the delay or outright cancellation of some projects. Capital spending in 2009 dropped 38 per cent from $18.1 billion to $11.2 billion. However, in 2010, capital spending increased 53 per cent to $17.2 billion, the third highest on record. However, oil sands projects also created new opportunities for local businesses, including many enterprises owned and operated by Aboriginal people. Splitting contracts into many components makes it possible for smaller companies to bid on them. Oil sands developers use open house events, local media and ongoing consultation to ensure that local people are aware of upcoming business opportunities. The Northeast Alberta Aboriginal Business Association distributes contract information among its members, and the Regional Economic Development Link or Red Link facilitates opportunities through information, communications, promotions, research, networking, and sales. Providing employment and business opportunities is, however, just one of the ways that the industry is transforming the social fabric and economic well-being of the oil sands areas. Aboriginal people make up about 10 per cent of the population in the Athabasca
Photo courtesy of Shell Canada Ltd.
Oil sands projects have created new opportunities for local businesses, including many enterprises owned and operated by Aboriginal people.
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oil sands area, and industry has made a concerted effort to provide opportunities for them. Since the 1970s, the government and oil sands companies have established programs to train and recruit Aboriginal people as employees, contractors and suppliers, and the new projects seek Aboriginal involvement wherever possible. In 2010, there were more than 1,700 Aboriginal people employed in operations jobs in the oil sands. About $5 billion worth of contracts have been awarded to local Aboriginal companies since 1998 - $1.3 billion in 2010 alone. The Canadian Energy Research Institute forecasts that 900,000 new jobs will be created and preserved in the oil sands between 2010 and 2035. This includes direct, indirect and induced employment.
Photo courtesy of Imperial Oil Ltd.
Regulation and consultation

The Alberta Resources Conservation Board and Alberta Environment are the principal regulators of oil sands operations in the province. Alberta Energy and Alberta Sustainable Resource Development also have direct roles in oil sands regulation. The National Energy Board regulates interprovincial and international aspects such as pipelines and exports. Large projects affecting interprovincial air and water resources, and related issues such as fisheries, are typically subject to joint federal-provincial environmental assessment. Provincial and federal energy, environment, health and safety authorities are also involved in many aspects of oil sands regulation. Through the Aboriginal Policy Framework released in 2000, Alberta committed to consult with First Nations when land management and resource development decisions may infringe their existing treaty or other constitutional rights. Beginning in September 2003, Alberta engaged in dialogue with industry and First Nations about consultation and the focus of consultation policy. The provinces First Nations Consultation Policy on Land Management and Resource Development was approved on May 16, 2005. It reinforced the commitment for consultation that was identified in the Aboriginal Policy Framework. The policy outlines the provinces expectations of First Nations and resource companies in striving for increased certainty for all parties with respect to land management and resource development activities. In addition, it outlines the provinces approach to meeting its consultation responsibilities. Following the release of the policy, the province worked with First Nations and industry to develop a Framework for Consultation Guidelines and sector-specific consultation guidelines. The framework was released on May 19, 2006 and the guidelines were implemented on September 1, 2006. In addition, the Athabasca Tribal Council began working with the government to develop specific consultation guidelines for the Athabasca oil sands area where development has been most intense. In 2000, two groups were created to address traditional environmental knowledge in the Athabasca oil sands region. The Cumulative Environmental Management Association formed a standing committee, the Traditional Environmental Knowledge Committee, to provide guidance on how to incorporate Aboriginal expertise into their knowledge base. The Reclamation Advisory Committee meanwhile created a sub-group to address traditional knowledge. Much of the science and understanding used in reclamation and environmental activities previously were based on Western knowledge. The members of the two bodies were aware of the needs and desires of the people indigenous to
education initiatives and consultation efforts help educate surrounding communities about Canada's oil sands.
Photo courtesy of Imperial Oil Ltd.
Through the Aboriginal Policy Framework released in 2000, Alberta committed to consult with First Nations when land management and resource development may infringe their existing treaty or other constitutional rights.
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the Athabasca area, and wanted to incorporate their knowledge to have a greater understanding of what environmental protection and reclamation should encompass. Traditional ecological knowledge includes information from people with an understanding of how past generations lived off of the land. This includes many First Nations people, Mtis and historians of local culture.
Research
The National Energy Board estimates that only about 10 per cent of Canadas oil sands resource can be recovered economically with current technology. The future of this resource will be decided in the laboratory. Government and industry have invested heavily in oil sands and in-situ research and development for decades, and much more will undoubtedly be spent in the future to improve the technological, environmental and economic performance of oil sands developments. To date, the Alberta government and private industry have each invested more than $1 billion in research to reduce the environmental footprint of oil sands development and increase economic recoveries. Several hundred researchers work in industry, university and government laboratories, primarily in the Calgary and Edmonton areas, to find solutions to the scientific and technological challenges facing the oil sands industry. Employees and contractors throughout the industry constantly seek more efficient, cost-effective and environmentally sensitive ways to do things. Some of the immediate challenges facing the scientists and technologists include: reducing emissions of oxides of nitrogen and greenhouse gases; reducing water use and natural gas consumption; improving the efficiency of oil sands mining, bitumen extraction and in-situ recovery; obtaining a higher yield of desirable products from upgrading; reducing equipment maintenance requirements; reducing the need to dilute bitumen for pipeline transportation; and improving tailings management and reclamation methods. Research partners from industry, the academic community and government coordinate their efforts through associations such as the Petroleum Technology Alliance Canada (PTAC), Canadian Oil Sands Network for Research and Development (CONRAD), the Alberta Chamber of Resources Oil Sands Task Force, Black Oil Pipeline Network Steering Committee, the CO2 Synergies Research Network, and Coordination of University Research for Synergy and Effectiveness (COURSE). The Alberta Energy Research Institute's research priorities with regard to oil sands include improving bitumen upgrading; demonstrating clean carbon/coal is a viable fuel for producing electricity; improving oil recovery technologies; developing technologies that reduce greenhouse gas emissions; supporting new technology to reduce fresh water use by the energy industry and advancing and adapting technology for alternative energy sources.
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the path ahead

North Americans have a huge appetite for oil products. Each Canadian and American uses an average of more than 20 barrels (3,178 litres) worth of petroleum-based products and services per year. Today, it is not possible for historic domestic sources of production to meet this demand. Conventional light crude oil production is declining throughout most oil-producing areas of the United States and Western Canada. The United States already imports more than half of its oil supplies. Canada has continued to export more oil than it imports. In fact, Canada has actually increased oil production thanks to oil sands, heavy oil and offshore oil development. Offshore, Arctic and conventional oil resources can maintain Canadian production and revenues for a while, but the oil sands are the nation's principal petroleum source for the long haul. Human ingenuity has already accomplished a great deal by making the oil sands economically competitive with conventional oil. Environmental and social challenges are being engaged. Continuous improvement in science, technology and management are helping to overcome the remaining challenges to meet societys expectations for sustainable development.
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FoR FURtheR inFoRMAtion

Publications
Alberta Energy and Natural Resources. energy Heritage Oil Sands and Heavy Oils of Alberta. Edmonton: 1982. Alberta Energy Research Institute. Life Cycle Analysis of North American and Imported Crude Oils. Two studies commissioned and released by AERI: Life Cycle Assessment Comparison of North American and Imported Crude, researched and authored by Jacobs Consultancy Canada Inc. and Comparison of North American and Imported Crude Oil Lifecycle GHG emissions, researched and authored by TIAX LLC. 2009. AEUB. Crude bitumen Reserves Atlas. Calgary: May 1996. Alberta Oil Sands Technology and Research Authority. AOSTRA A 15-Year Portfolio of Achievement. Edmonton: 1990. Bryson, Connie, ed. Opportunity Oil Sands. Winnipeg: Fleet Publications Inc., 1996. Bott, Robert. True Grit How Syncrude Manages for Success, The Globe and mail Report on business magazine. Toronto: May 1995. Canadian Association of Petroleum Producers. 2005 CAPP Stewardship Progress Report. Calgary: 2006. Canadian Association of Petroleum Producers. Statistical Handbook for Canadas Upstream Petroleum Industry. Calgary: September 2011. Canadian Association of Petroleum Producers. Upstream Dialogue: The Facts on Oil Sands. Calgary: October 2011 Canadian Energy Research Institute. Canadian Oil Sands Supply Costs and Development Projects (2010-2044), Study 122. Calgary: May 2011. Canadian Energy Research Institute. economic Impacts of New Oil Sands Projects in Alberta (20102035), Study 124. Calgary: May 2011. Canadian Energy Research Institute. economic Impacts of Albertas Oil Resources: September 2008 Update, vol. 1. November 2008. Canadian Energy Research Institute. economic Impacts of the Petroleum Industry in Canada. July 2009. Chastko, Paul. Developing Albertas Oil Sands, From Karl Clark to Kyoto. University of Calgary Press, 2004. Comfort, Darlene J. The Abasand Fiasco: The rise and fall of a brave pioneer oil sands extraction plant. Edmonton: Friesen Printers, 1980. De Bruijn, Theo. Challenges for Low Cost Upgrading A Canadian Perspective. Devon, Alberta: National Centre for Upgrading Technology, December 1998. Energy Resources Conservation Board. ST98-2011: Albertas energy Reserves 2010 and Supply/Demand Outlook 20112020. Calgary: June 2011. Energy Resources Conservation Board. ST98-2010: Albertas energy Reserves 2009 and Supply/Demand Outlook 20102019. Calgary: June 2010. Energy Resources Conservation Board. Albertas energy Reserves 2008 and Supply/Demand Outlook 2009-2018. ST982009. Calgary: June 2009 Ferguson, Barry Glen. Athabasca Oil Sands Northern Resource exploration, 1875-1951. Regina: Canadian Plains Research Centre, 1985. Fitzgerald, J. Joseph. Black Gold with Grit: The Alberta Oil Sands. Sidney, British Columbia: Grays Publishing Ltd., 1978. Ignatieff, A. A Canadian Research Heritage: An Historical Account of 75 Years of Federal Government Research and Development in minerals, metals and Fuels at the mines branch. Ottawa: Energy, Mines and Resources Canada, Canada Centre for Mineral and Energy Technology, 1981. McCann, T.J., and Phil Magee. Crude Oil Greenhouse Gas Life Cycle Analysis Helps Assign Values For CO2 Emissions Trading, The Oil and Gas Journal. Tulsa, Oklahoma: February 22, 1999. McKenzie-Brown, Peter; Gordon Jaremko, and David Finch. The Great Oil Age. Calgary: Detselig Publishers, 1993. Mikula, R.J., V.A. Munoz, K.L. Kasperski, O.E. Omotoso, and D. Sheeran. Commercial Implementation of a Dry Landscape Oil Sands Tailings Reclamation Option: Consolidated Tailings. 7th UNITAR International Conference on Heavy Crude and Tar Sands, paper 1998.096. Mink, Frank, and Richard N. Houlihan. Tar Sands, p. 129, Vol. A26, Ullmanns encyclopedia of Industrial Chemistry. Weinheim, Germany: 1995.
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OIL SANDS QUeSTIONS + ANSWeRS
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Mitchell, Robert; Brad Anderson, Marty Kaga, and Stephen Eliot. Albertas Oil Sands: Update on the Generic Royalty Regime. Edmonton: Alberta Department of Energy, 1998. National Energy Board. 2009 Reference Case Scenario: Canadian energy Demand and Supply to 2020. Ottawa: July 2009. National Energy Board. Canadas energy Future: Scenarios for Supply and Demand to 2025. Calgary: 2003. National Energy Board. Canadas Oil Sands: Opportunities and Challenges to 2015. Calgary: May 2004. National Energy Board. Canadas Oil Sands Opportunities and Challenges to 2015: An Update. Calgary: June 2006. National Oil sands Task Force. A New era of Opportunity for Canadas Oil Sands. Edmonton: Alberta Chamber of Resources, 1996. Oil Sands Ministerial Strategy Committee. Investing in Our Future Final Report. Edmonton: Government of Alberta, 2007. (Downloaded March 2, 2007 from http://www.gov.ab.ca/home/index.cfm?page=1551) Prince, J.P., and Govinda Timilsina. Spreading the Wealth Around: The economic Impacts of Albertas Oil Sands Industry. Calgary: Canadian Energy Research Institute, September 2005. Regional Aquatic Monitoring Program. 2010 Technical Report. Fort McMurray: 2011. Regional Municipality of Wood Buffalo. municipal Census 2007. Fort McMurray, 2007. Regional Municipality of Wood Buffalo. municipal Census 2010. Fort McMurray, 2010. Rolheiser, Pius. Riddle of the Sands, Imperial Oil Review. Toronto: Summer 1998. The Royal Tyrrell Museum of Paleontology. The Land before Us The making of Ancient Alberta. Red Deer, Alberta: Red Deer College Press, 1994. Russell, Loris S. Abraham Gesner, Dictionary of Canadian biography. Toronto: University of Toronto Press, 2000. Shell Canada Ltd. 2010 Oil Sands Performance Report. Calgary: 2011 Sheppard, Mary Clark, ed. Oil Sands Scientist The Letters of Karl A. Clark, 1920-1949. Edmonton: The University of Alberta Press, 1989. Statistics Canada. energy Statistics Handbook, Second Quarter 2011. Ottawa: September 2011. Statistics Canada. International merchandise Trade Annual Review 2010. Ottawa: April 2011. Statistics Canada. The Supply and Distribution of Refined Petroleum Products in Canada. Ottawa: July 2011. Suncor Energy Inc. 2011 Summary Report on Sustainability. Calgary: July 2011 Syncrude Canada Ltd. 2009 Sustainability Report. Fort McMurray 2010 Wood Buffalo Environmental Association. 2010 Annual Report. Fort McMurray 2011 Woynillowicz, Dan, Chris Severson-Baker and Marlo Raynolds. Oil Sands Fever: The environmental Implications of Canadas Oil Sands Rush. Calgary: Pembina Institute, November 2005.
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Websites
The Canadian Centre for Energy Information web portal www.centreforenergy.com provides up-to-date information about oil sands and crude oil in Canada. The Centre for Energys general introduction to the industry, Our Petroleum Challenge, can be purchased online and provides information about drilling, pipelining and processing of crude oil and natural gas as well as a glossary of industry terms. Note: Most U.S. references, and some Canadian and international entities, use the American spelling for sulphur and related compounds. When doing searches in libraries or on the Internet, also remember to check for sulfur, sulfide, sulfuric, sulfurous, etc. as well as the Canadian spellings. Alberta Energy www.energy.gov.ab.ca Alberta Energy Research Institute www.aeri.ab.ca Alberta Environment www.environment.gov.ab.ca Alberta Federation of Labour www.afl.org Alberta Geological Survey www.ags.gov.ab.ca Alberta Oil Sands www.oilsands.alberta.ca Alberta Utilities Commission www.auc.ab.ca Canadian Association of Petroleum Producers www.capp.ca Canadian Energy Research Institute www.ceri.ca Canadian Heavy Oil Association www.choa.ab.ca Canadian Natural Resources Limited www.cnrl.com Clean Air Strategic Alliance www.casahome.org Energy Information Administration www.eia.gov Energy Resources Conservation Board www.ercb.ca Environment Canada www.ec.gc.ca In Situ Oil Sands Alliance www.iosa.ca National Energy Board www.neb-one.gc.ca Natural Resources Canada www.nrcan-rncan.gc.ca Oil Sands Developers Group www.oilsandsdevelopers.ca Pembina Institute www.pembina.org Regional Aquatics Monitoring Program www.ramp-alberta.org Regional Economic Development Alliance http://www.albertacanada.com/regionaldev/1218.html Wood Buffalo Environmental Association www.wbea.org
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Key definitions
hydrocarbons are compounds of hydrogen and carbon. The simplest hydrocarbon is methane (CH4), composed of one carbon atom and four hydrogen atoms. Methane is the principal component of natural gas. Crude oil is a naturally occurring liquid mixture of hydrocarbons. It typically includes complex hydrocarbon molecules long chains and rings of hydrogen and carbon atoms. The liquid hydrocarbons may be mixed with natural gas, carbon dioxide, saltwater, sulphur compounds and sand. Most of these substances are separated from the liquid hydrocarbons at field processing facilities called batteries. Conventional light crude oil flows easily at room temperature. Upgraded crude oil is a blend of hydrocarbons similar to light crude oil. It is produced by processing bitumen or heavy oil at a facility called an upgrader. The term synthetic crude oil is sometimes also used for upgraded crude oil. Bitumen is a thick, sticky form of crude oil. At room temperature, bitumen has the consistency of molasses. It must be heated or diluted before it will flow easily into a well or through a pipeline. Bitumen is sometimes called extra-heavy crude oil. A typical dictionary definition of bitumen is a tar-like mixture of petroleum hydrocarbons. A more technical definition in the oil-producing industry is: A naturally occurring, viscous mixture of hydrocarbons that contains sulphur compounds and will not flow in its naturally occurring viscous state. Diluents are light petroleum liquids used to dilute bitumen and heavy crude oil so it can flow through pipelines. oil sands are naturally occurring mixtures of bitumen, water, sand and clay that are found mainly in three areas of Alberta Athabasca, Peace River and Cold Lake. A typical sample of oil sands might contain about 12 per cent bitumen by weight, although bitumen content can vary widely among specific samples and sites. If the oil sands deposits are close to the surface, bitumen can be recovered from the oil sands by open-pit mining and hot-water processing methods. Deeper deposits require in-situ methods such as steam injection through vertical or horizontal wells. (In-situ means in-place in Latin; the oil industry uses this term to indicate the bitumen is separated from the sand underground, in the geological formation where it occurs.) Surface mining is used in the Athabasca oil sands, while in-situ methods are used in all three major oil sands areas. heavy crude oil includes some crude oil that will flow at room temperatures, however slowly, but most heavy oil also requires heat or dilution to flow to a well or through a pipeline. Therefore it is similar to bitumen, although lighter, generally less viscous and usually containing less sulphur. In Canada, the term heavy oil refers to petroleum with a density greater than 900 kilograms per cubic metre (or below 25.7API on the American Petroleum Institute gravity scale). Petroleum is a general term for all the naturally occurring hydrocarbons natural gas, natural gas liquids, crude oil and bitumen although in some usage petroleum refers only to liquid hydrocarbons. natural gas liquids (nGLs) are ethane, propane, butane and condensates (pentanes and heavier hydrocarbons) that are often found in natural gas; some of these hydrocarbons are liquid only at low temperatures or under pressure. NGLs can be used as solvents for in-situ bitumen production, and condensates are the most common diluent for shipping bitumen by pipeline. Resources are substances found in nature that are of some use. Bitumen resources, for example, are all the extra-heavy hydrocarbons in the ground in a given area. Reserves are the recoverable portion of resources. Governments generally define reserves as the amounts available for use based on current knowledge, technology and economics. Securities regulators use a narrower definition that also requires a firm development plan with reasonable timelines. As a result, there can be a wide gap between government reserves estimates and the sum of those reported by companies. Barrel is a common unit for measuring petroleum. One barrel contains approximately 159 litres. There are about 6.3 barrels in one cubic metre. All costs in this booklet are quoted in Canadian dollars unless otherwise noted.
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Suite 1600, 800 6th Avenue SW Calgary, Alberta, Canada T2P 2G3 Telephone: Facsimile: Toll free: E-mail: 403-263-7722 403-237-6286 1-877-606-4636 [email protected]
To purchase and download Centre for Energy publications or obtain more information visit www.centreforenergy.com.

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Canadas Oil Sands

Third Edition November 2011

CaNadas Oil saNds

Reviewers Third Edition

Reviewers second Edition

seCtion 2: A MAssiVe tAsK

32 Publications 34 Websites 35 Key definitions

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Section 1 Resources Beyond Belief

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Alberta Oil Sands ALBeRtA's Projects oiL sAnDs PRojeCts

Buffalo Head Hills Deposit

OIL SANDS AREA

Peace River Deposit Peace River Carbonate triangle Wabasca Deposit

Cold Lake Deposit

to eastern Canada, U.s. markets and newGrade Upgrader at Regina

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the continental and global context

WesteRn CAnADA seDiMentARY BAsin CRoss-seCtion

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the nature of the resource

Each grain of sand is surrounded by a layer of water and a film of bitumen

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Photo courtesy of Shell Canada Inc.

Photo courtesy of JuneWarren Publishing Ltd.

The impact on ecosystems is of primary concern.

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Photo courtesy of Devon Canada Corporation

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Photo courtesy of Suncor energy Inc.

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Section 2 A Massive Task

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steam-assisted gravity drainage (sAGD)

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Cyclic Steam Stimulation

Cyclic steam stimulation

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Combustion zone Coke zone

Mobile oil zone

Production well connected to gathering system

Pipe perforated in injection zone Air

Cold heavy oil

Pipe perforated from toe to heel

Toe-to-heel air injection

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Sulphur can be recovered to be used in fertilizer and other products.

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Photo courtesy of Suncor energy Inc.

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Photo courtesy of Syncrude Canada Ltd.

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Products and uses

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Section 3 Towards Sustainable Development

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