When Suncor Energy Inc. and its predecessor, Great Canadian Oil Sands, began developing the oilsands in northern Alberta in 1963, the project was hobbled by the difficulties and the expense of extracting crude oil from what is essentially a huge oily sand deposit.

More than four decades later, about 60 companies are operating in the oilsands, and CIBC World Markets predicts that as conventional crude dries up, Alberta will become the most important source of new oil in the world by 2010.

Oilsands, also called tarsands, lie beneath a 140,800-square-kilometre chunk of northern Alberta — an area larger than the state of Florida.

In world terms, Canada is second only to Saudi Arabia when it comes to proven oil reserves and Alberta's oilsands are the country's largest source.

There's enough oil in established reserves to fill nine million Olympic-sized swimming pools, attracting the attention of U.S. politicians who see Canada as a friendly source of oil.

Bitumen is the technical name for the heavy, tar-like oil found in the ground in the oilsands regions of Athabasca, Peace River and Cold Lake.

It's trapped in a mixture of sand, water and clay and needs to be extracted, treated and upgraded before it can be used as oil. That's not cheap, costing $18 a barrel in 2004, making oilsands deposits more attractive the higher oil prices climb.

If bitumen is near the surface it can be mined in open pits. Giant vehicles dig up two tonnes of oilsands for every barrel of oil produced.

However, about 93 per cent of the bitumen is too deep in the earth to be mined.

There are a number of techniques. One of the oldest involves injecting steam into the deposit to heat the oilsands and reduce the thickness of the bitumen. The hot bitumen migrates towards a drilled L-shaped well, bringing it to the surface, while the sand is left in place.