Oil Sands

Second only to the Saudi Arabia reserves, Alberta's oil sands deposits were described by Time Magazine as "Canada's greatest buried energy treasure," and "could satisfy the world's demand for petroleum for the next century".

Oil Sands are deposits of bitumen, a molasses-like viscous oil that will not flow unless heated or diluted with lighter hydrocarbons. They are contained in three major areas beneath 140,200* square kilometres of north-eastern Alberta - an area larger than the state of Florida, an area twice the size of New Brunswick, more than four and half times the size of Vancouver Island, and 26 times larger than Prince Edward Island. However, only about two per cent of the initial established resource has been produced to date.

Alberta Energy encourages the responsible development of these extensive deposits through planning and liaison with government, industry and communities to ensure a competitive royalty regime that is attractive to investors, appropriate regulations and environmental protection and the management of Crown rights to oil sands while taking into account some of the barriers - higher technological risk and higher capital costs - faced by oil sands developers.

Alberta's oil sands industry is the result of multi-billion-dollar investments in infrastructure and technology required to develop the non-conventional resource. According to the Canadian Association of Petroleum Producers (CAPP), in 2005 industry investment in Alberta’s oil sands totalled approximately $10 billion.

In 2005 Alberta's oil sands were the source of about 58 per cent of the province's total crude oil and equivalent production and about 39 per cent of all crude oil and equivalent produced in Canada. Over the last three fiscal years, from 2003/2004 to 2005/2006, oil sands development returned $1.865 billion to Albertans in the form of royalties paid to the provincial government.

Annual oil sands production is growing steadily as the industry matures. Output of marketable oil sands production increased to 966,000 barrels per day (bbl/d) in 2005. With anticipated growth, this level of production could reach 3 million barrels per day by 2020 and possibly even 5 million barrels per day by 2030. This degree of activity would support the development of other key industries and see Alberta become a Global Energy Leader.

Development of Alberta's oil sands resources represents a triumph of technological innovation. Over the years, government and industry have worked together to find innovative and economic ways to extract and process the oil sands and energy research is more important today than ever before. Working through the Alberta Energy Research Institute, the Alberta government is committed to a collaborative approach to spur new technology and innovation programs that will reduce the impact of greenhouse gases and other emissions, and reduce the consumption of water and gas.

* using GIS software