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Canadian Oil Sands - A State of the Industry Review

This review outlines the Canadian Oil Sands industry and provides links to information sources on the economic and environmental impact of the industry, production statistics and project updates. Although this review deals primarily with Canada, it is important to note that oil sands are found elsewhere in the world. Venezuela for example is estimated to have reserves of over 300 million barrels.

Additional information and links to oil sands news, individual mine sites, technology, careers, companies, suppliers and equipment are available throughout OilSands.InfoMine.com

Updated June 2011

Table of Contents

Once a footnote in the story of world oil production, Canada's oil sands are part of the solution to declining conventional oil reserves elsewhere in the world. Canada has approximately 175 billion barrels of oil that can be recovered with today’s technology. Of that number, 170 billion are located in the oil sands. (Source: CAPP). There are an estimated 2.5 trillion barrels of bitumen in the Canadian resources. That is more than enough to supply all of Canada's needs and make a significant contribution to America, China and other oil importers for generations to come.

As with many of Canada's natural resources, oil sands were discovered by Aboriginal people who used the tar-like substance that flowed from the banks of the Athabasca River on hot summer days to waterproof their clothing and canoes. Commercial development of the deposits commenced in the 1960s when Suncor Energy Inc. (then Great Canadian Oil Sands) constructed a mine and upgrader north of Fort McMurray. In the 1970's Syncrude Canada Ltd. commenced operations. In situ production commenced in 1985 when commenced Imperial Oil Limited started the Cold Lake project and Petro-Canada began operations at Wolf Lake. A timeline of oil sands developments can be found in the history section of the Athabasca Oil Sands website.

A good general description of how oil sands are formed can be found on the Center for Energy's website. Here are a few key points on how oil sands are formed:

Oil formation takes place in source rocks, usually very fine-grained rocks known as black shales. Once the oil is formed, continued pressure from overlying rock strata forces the oil to migrate through permeable rock layers until it is trapped in reservoirs of porous sedimentary rock such as sandstone or limestone, or until it escapes at the surface.

As the eons passed, the oil-bearing sediments were covered by more than a kilometre of sedimentary rock. Then, about 50 million years ago, vast amounts of the liquid hydrocarbons migrated more than 100 kilometres eastward and upward until they reached and saturated large areas of sandstone at, and just below, the surface of what is now northern Alberta.

For a technical overview of the deposits see a brief overview of the geology of the heavy oil, bitumen and oil sands deposits produced by researchers from Earth and Atmospheric Sciences department at the University of Alberta.

Laws and Regulations
As with any industry, especially one as potentially lucrative for both government and companies, there are laws and regulations governing how oil sands developers and producers must conduct their business. Some regulations are general in nature such as the Mines and Minerals Act, which governs the management and disposition of rights in Crown owned mines and minerals (among other things) or the Petroleum Royalty Regulation. Others are more industry specific and include:

Visit the Government of Alberta's website for more information on oil sands legislation and guidelines.

The most influential institution dealing with the industry is the Canadian Association of Petroleum Producers (CAPP) which represents companies who explore for, develop and produce more than 98% of Canada's natural gas, crude oil, and elemental sulphur.

On a regional level the Alberta Innovates Energy and Environment Solutions promotes research and innovation in the energy sector. The Wood Buffalo Environmental Association is a collaboration of communities and environmental groups that monitors the air quality in the region.

For a list of other organizations catering to the workforce, visit Fort McMurray Labour Market News.

In the study The Decade Ahead (also see Update to the Decade Ahead), the Petroleum Human Resources Council of Canada estimates that 8,000 new positions will be created during the next ten years leading to shortages in skilled workers and possible supply gaps. There are currently and will continue to be many employment opportunities for those seeking work in Alberta's Oil Sands.

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