Year: 2004
Abstract:
We live in a world with a relentlessly growing demand for energy. Global geopolitical pressures and economics play important roles in the sourcing and development of energy and new strategic supplies. The availability of economical and secure supplies of energy, in particular crude oil, is especially important to the U.S. which consumes approximately 25% of the world's energy production.
Ongoing instability in the Middle East has been a catalyst for the U.S. to seek crude oil supplies from sources closer to home such as Venezuela, Mexico and Canada. The Canadian oil sands industry, primarily located in the province of Alberta in western Canada, is one of the most secure sources of supply.
Over the last few decades, Canadian oil sands production has grown from relatively modest test-well quantities to an amount approaching 1 million bpd. Oil sands are naturally occurring mixtures of several organic materials, mostly bitumen, water, sand and clay. A typical sample of oil sands contains approximately 12% bitumen by weight with a density greater than 960 kilograms per cubic meter, an API gravity of about 8 and a sulfur content of 4-6%.
Alberta possesses three known large oil sands regions--Athabasca, Cold Lake, and Peace River. Advances in technology have made the production of bitumen (the hydrocarbon material found in oil sands) economically feasible and made it possible for these oil sands to be reclassified as proven reserves that measure 174.4 billion barrels. While these proven reserves are immense, their value is questionable if they cannot be developed and brought to market on a cost-effective basis.
