North American Oil Sands: History of Development, Prospects for the Future

When it comes to future reliable oil supplies, Canadas oil sands will likely account for a greater share of U.S. oil imports. Oil sands account for about 46 of Canadas total oil production and oil sands production is increasing as conventional oil production declines. Since 2004, when a substantial portion of Canadas oil sands were deemed economic, Canada, with about 175 billion barrels of proved oil sands reserves, has ranked second behind Saudi Arabia in oil reserves. Canadian crude oil exports were about 1.82 million barrels per day mbd in 2006, of which 1.8 mbd or 99 went to the United States. Canadian crude oil accounts for about 18 of U.S. net imports and 12 of all U.S. crude oil supply. Oil sands, a mixture of sand, bitumen a heavy crude that does not flow naturally, and water, can be mined or the oil can be extracted in-situ using thermal recovery techniques. Typically, oil sands contain about 75 inorganic matter, 10 bitumen, 10 silt and clay, and 5 water. Oil sand is sold in two forms 1 as a raw bitumen that must be blended with a diluent for transport, and 2 as a synthetic crude oil SCO after being upgraded to constitute a light crude. Bitumen is a thick tar-like substance that must be upgraded by adding hydrogen or removing some of the carbon. Exploitation of oil sands in Canada began in 1967, after decades of research and development that began in the early 1900s. The Alberta Research Council ARC, established by the provincial government in 1921, supported early research on separating bitumen from the sand and other materials. Demonstration projects continued through the 1940s and 1950s. The Great Canadian Oil Sands company, established by U.S.-based Sunoco, later renamed Suncor, began commercial production in 1967 at 12,000 barrels per day. In the United States, a number of obstacles, including the remote and difficult topography, scattered deposits, and lack of water, have resulted in an uneconomic oil sands resource base.