INDEPTH: OIL
Alberta's oilsands
CBC News Online | March 14, 2005
Alberta’s oilsands deposits are Canada largest source of oil, with reserves estimated at between 1.7 trillion and 2.5 trillion barrels.
In 2000, the development of Alberta oil, especially at the Athabasca sands, helped the provincial government eliminate its net debt, set income tax at a flat rate of 10 per cent and do away with provincial sales tax.
Found in the Athabasca, Peace River and Cold Lake regions of Northern Alberta, the oil is trapped in a mixture of sand, water and clay.
The actions of water and bacteria have transformed the light crude into bitumen, a much heavier, carbon-rich and extremely viscous oil.
The oilsands near the surface are extracted through open pit mining, mainly with shovels and trucks.
But about 90 per cent of oilsands cannot be pulled out that way. Oil must be extracted using in situ (Latin for "in place") technology.
This is how it works: steam is injected into the deposit to heat the oilsands and lower the thickness of the bitumen. The hot bitumen migrates towards producing wells, bringing it to the surface, while the sand is left in place.
While this process is not cheap, with oil prices above $50 US a barrel, more and more producers are expanding into the oilsands.
Suncor's March 2005 application to expand its Alberta oilsands operation follows the approval of Canadian Natural Resources' Horizon project and Petro-Canada's investment in the Fort Hills project.
According to Statistics Canada, the oilsands industry, buoyed by high energy prices, will be the largest contributor to growth in the mining, and oil and gas sector with an increased investment of $2.4 billion in 2005, compared to 2004.
This expected increase in oilsands investment comes despite rising capital costs, labour shortages and the rising price of meeting Canada's Kyoto Protocol commitments.
In fact, environmentalists worry that clean-burning gas from the Mackenzie Gas Project will be diverted to refine the dirty oil of Alberta's oilsands.
They say this will increase Canada's greenhouse gas emissions at a time when Ottawa is supposed to be cutting them. Production from the Alberta oilsands is set to quadruple in the next 25 years, and producers will use natural gas for refining.
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