Alberta Oil SandsAlberta Oil Sands

Carolyn Levi, Mike Matika, Sara SmithCarolyn Levi, Mike Matika, Sara Smith

OutlineOutline

General InformationGeneral InformationReasons for Rapid Reasons for Rapid DevelopmentDevelopmentExtractionExtractionTransportationTransportationEnvironmentEnvironmentMarket Destinations Market Destinations and Relationsand RelationsRecent NewsRecent News

Oil Sands BasicsOil Sands Basics#2 global oil supply after Saudi Arabia#2 global oil supply after Saudi Arabia

AthabascaAthabasca, Cold Lake, Peace River, Cold Lake, Peace River176 BILLION 176 BILLION bblsbbls under current technologyunder current technology335 BILLION 335 BILLION bblsbbls of mineral endowmentof mineral endowmentLarger than the state of Florida (140 800 kmLarger than the state of Florida (140 800 km²²))

3 Main Reasons for Rapid 3 Main Reasons for Rapid DevelopmentDevelopment

1.1. More accessible marketsMore accessible markets↓↓ conventional oil production, conventional oil production, ↑↑ demanddemand

2.2. Reduction in supply costsReduction in supply costsdriven by technological innovationdriven by technological innovation

3.3. Recent high crude oil pricesRecent high crude oil pricesoptimistic price outlookoptimistic price outlook

Extraction TechniquesExtraction Techniques

1.1. Surface MiningSurface Mining

2.2. In Situ (inIn Situ (in--place production)place production)Steam InjectionSteam InjectionSteam Assisted Gravity Drainage (SAGD)Steam Assisted Gravity Drainage (SAGD)VapourVapour Recovery Extraction (VAPEX)Recovery Extraction (VAPEX)Toe to Heel Air Injection (THAI)Toe to Heel Air Injection (THAI)

SeparationSeparation8080--85% mineral matter, 1085% mineral matter, 10--12% bitumen, 412% bitumen, 4--6% water6% water2 2 tonnestonnes of sand = 1 bbl crude oilof sand = 1 bbl crude oil

UpgradingUpgradingNecessary to lower viscosity for transportationNecessary to lower viscosity for transportation““at 11at 11°°C, bitumen has the consistency of a hockey C, bitumen has the consistency of a hockey puckpuck””

TransportationTransportation

RailRailTruckTruckPipelinePipeline

700 000 km pipeline in 700 000 km pipeline in CanadaCanada294 000 km pipeline in 294 000 km pipeline in AlbertaAlbertaMoves at 5 km/hrMoves at 5 km/hr

Gateway PipelineGateway Pipeline$2.5 billion, 1160 $2.5 billion, 1160 kmskms400 000 400 000 bblsbbls per dayper dayNew route New route –– Asia Pacific Asia Pacific marketsmarkets

Alberta Pipeline SystemAlberta Pipeline System

Environmental AspectsEnvironmental Aspects““Developers are required to Developers are required to

restore the region as a whole, restore the region as a whole, an ecosystem landscape at an ecosystem landscape at least as healthy and least as healthy and productive as that which productive as that which existed existed before before development.development.””

““Compared to 1990 levels, oil sand Compared to 1990 levels, oil sand developers have been actively developers have been actively working towards reducing COworking towards reducing CO22emissions by 45% per bbl by emissions by 45% per bbl by year 2010.year 2010.””

““Around 300 Wood Bison call Around 300 Wood Bison call SyncrudeSyncrude home.home.””

In RealityIn Reality……1 bbl (160L) creates more greenhouse gas emissions 1 bbl (160L) creates more greenhouse gas emissions than four cars do in a day.than four cars do in a day.

““For every bbl of synthetic oil produced in Alberta, For every bbl of synthetic oil produced in Alberta, more than 80 more than 80 kgskgs of greenhouse gases are released of greenhouse gases are released into the atmosphere and between 3 and 5 into the atmosphere and between 3 and 5 bblsbbls of of wastewater are dumped into tailing ponds.wastewater are dumped into tailing ponds.””

““This form of oil extraction completely destroys the This form of oil extraction completely destroys the boreal forest, the bogs and the riversboreal forest, the bogs and the rivers…… 30 years 30 years after the opening of the first open pit mine near Fort after the opening of the first open pit mine near Fort McMurray, AB, no land is considered by the AB McMurray, AB, no land is considered by the AB govgov’’tt as having been as having been restored.restored.””

Syncrude SunsetSyncrude Sunset

““The fact remains that the oil sands are the most dirty, wastefulThe fact remains that the oil sands are the most dirty, wastefulway of obtaining energy on the entire planet.way of obtaining energy on the entire planet.““ –– Elizabeth MayElizabeth May

Market DestinationsMarket Destinations

Market RelationsMarket RelationsDomesticDomestic

CanadaCanada’’s greatest buried energy treasures greatest buried energy treasure

ChinaChinaOil demand expected to have an annual increase of 4%Oil demand expected to have an annual increase of 4%Husky Energy Inc./Husky Energy Inc./PetroPetro China InternationalChina International

USAUSACanada provides 1/6Canada provides 1/6thth of USAof USA’’s 10 million s 10 million bblsbbls of of imported oil per dayimported oil per dayBy 2015, net imports are expected to account for 63% of By 2015, net imports are expected to account for 63% of crude oil demandcrude oil demand

Recent NewsRecent NewsRoyal Dutch Shell bought 900 kmRoyal Dutch Shell bought 900 km²² for $465 millionfor $465 million

Greater investment in R&DGreater investment in R&DTesting new technologies on harder rockier soilTesting new technologies on harder rockier soil

ConclusionConclusion

Oil Sands Oil Sands Operations are:Operations are:

ExpensiveExpensiveComplexComplexNecessaryNecessarySustainable?Sustainable?