From humble beginnings in the 1960s, development of Alberta’s oil sands has grown into a major driver of the provincial economy and a significant contributor to Canada’s crude oil supply. With an estimated 2.5 trillion barrels of oil in the ground, it is one of the largest deposits of oil on earth. But there is one major problem – the oil trapped in the oil sands is much more difficult and expensive to extract than is conventional crude oil.
Nonetheless, oil companies have made tremendous headway in developing ways to extract the oil from the oil sands. Already, more than 1 million barrels of oil are produced each day from the oil sands – about a third of current total Canadian crude oil production. This figure is expected to double to 2 million barrels a day by 2010 when it will account for 57% of all oil production in the country.
To date, over $34 billion has been invested in the oil sands – more than the total annual GDP of neighbouring Saskatchewan. According to the Canadian Association of Petroleum Producers (CAPP), close to $38 billion in investments are planned over the next ten years – a number that changes almost daily as more and more projects are announced. These projects are having a massive impact on investment activity, exports, and employment.
Despite the massive scope of oil sands development, few of us have taken the time to understand what it all means to Alberta and to Canada. How do we get oil from oil sands? Who owns the oil? How much oil is there? What do these projects mean for our environment, the economy and the global supply of oil?
This report seeks to provide an accessible primer on the oil sands, its importance to the economy, and the core public policy issues to which they give rise. A key goal here is to expand awareness of Alberta’s oil sands outside the province and the energy sector.