The survival and growth of Alberta's bitumen industry during the continuing world oil price uncertainty will, to a large extent, depend on the development of improved technologies and enhanced cost effectiveness. It is first necessary to identify key parameters that impact production costs and to determine their relative cost sensitivities. Research can be focused on these targeted areas and production strategies can be developed which could potentially provide significant cost reductions.

This paper describes how energy models developed at the Alberta Research Council are used to identify key areas and to determine their cost sensitivity. Current technologies for in situ extraction of bitumen from Alberta's deposits are reviewed, and the implications of different world oil price scenarios are analyzed. The economic impact of a number of promising operating strategies and processes are presented and analyzed.