Oil Sands: Damned If We Do, Damned If We Don’t

August 3, 2008

Author’s Disclaimer: I am employed by a petroluem company involved in developing the oil sands. This company shall remain nameless.

Oil sands open-pit mining

Northeastern Alberta, Canada contains some of the largest crude oil reserves in the world. Oil sands are a mix of naturally occurring bitument, a thick, sticky oil, and abrasive sand. The challenge is to recover the oil in an economic manner, but still protect the environment. The amount of oil is too large not to be developed.

Alberta has the largest known deposit of oil sands in the world. They cover a 140,800 square kilometre area. Currently 1.1 million barrels of oil are extracted each day. By 2015 it is expected that rate will increase to 2.7 million barrels per day.

The Province of Alberta benefits greatly from this resource. In 2004 the government collected $718 million (CDN) in royalty payments from oil sands production. The entire resource is owned by the province. Freehold mineral owners in the remote northeaster area of the province are essentially non-existent.

The oil sands reserves considered recoverable using today’s technology are designated at 175 million barrels. This is second only to those of Saudi Arabia (260 billion). That’s less than the 1.7 to 2.5 trillion barrels actually in the oil sands, if only the right technologies can be used.

Crude oil provides 36% of the primary energy the world uses for industry, transportation, heat, light, and air conditioning, and petrochemical products. Many of the petrochemical products are medical supplies. Gasoline and jet fuel are the most common transportation related products.

Oil sands are produced today using,

Surface Mining: near surface oil sands are developed using enormous truck-and-shovel mining systems. Hot water is used ot separate the bitumen (oil) from sand and clay.

In-Situ Mining: bitumen is obtained from deeply buried formations by injecting steam or other chemicals underground. This makes the thick bitumen thin and separates it from the sand. It is then pumped to the surface.

Upgrading: before the heavy oil (bitumen) is sent to refineries it has to be “upgraded” first into light oil. The conventional refineries can then process it into fuels, lubricants and other products.

Regulatory and environmental approvals required for these developments are stringent and numerous. Are there people opposed to developing these resources? Sure there are, but until demand for fossil fuels goes away how can we not use the oil.

Right now most of the recovered oil is sent to refineries in Canada and the United States. China and the Asian market are also clammering for more and are investing heavily in the area.

Further Reading:
Oil Sands Discovery Centre

Canada’s Oil Sands

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