Survey of Energy Resources 2007
Natural Bitumen and Extra-Heavy Oil Country Notes
Canada has three major oil sands deposits in Alberta, the Athabasca deposit, centered on the city of Fort McMurray, the Cold Lake deposit, north of Lloydminster, and the Peace River deposit, in northwest Alberta.
In the Athabasca area, where 80% of oil sands exist, the mineable portion of the Wabiskaw-McMurray formation (Cretaceous age) is estimated to contain 16 billion cubic metres in-place. A further 253 bcm of in-place bitumen resource is associated with the in-situ projects.
The Canadian Association of Petroleum Producers (CAPP) estimates of established reserves at year-end 2004 were 28 bcm, which is consistent with Alberta Energy and Utilities Board (EUB). Cumulative production is about 0.7 bcm. About 20% of established reserves are mineable and 80% require in-situ recovery. The ultimate potential (with improved economics and technology) of bitumen reserves is 55 bcm, including 8 bcm from surface mineable recovery methods.
Mineable Reserves. The surface-mineable oil sands area is defined by the amount of overburden that has to be removed to reach bitumen ore. Overburden of 75 m or less is considered to be surface-mineable. The EUB has designated over 850 000 acres where the overburden is less than 75 m. All other oil sands deposits that are below 75 m of depth are classified as in-situ. Due to low gravity and high viscosity, these oil sands require enhanced recovery schemes, such as thermal stimulation, in order for the bitumen to become mobile and produceable by pumping.
The quantity of volume in-place that is economic to produce is based on economic strip ratio criteria, a minimum bitumen saturation of 7 mass per cent bitumen, and a minimum saturated zone thickness of 3.0 m. The EUB also applies factors that sterilise volumes from being mineable, such as corridors along rivers, surface facilities, tailings ponds, and waste dumps. Mining and extraction operations result in an average loss of 18% of bitumen in-place volume.
Active projects shown in the table above have produced 0.5 bcm at end-2004. The Suncor mining project began operation in 1967, produced less than 8 000 m3/d for most of the period through the end of the 1980s, and then grew to production of 35 000 m3/d in 2004. The Syncrude project began operation in 1977 and has produced over 32 000 m3/d since 1995. The Albian project, led by Shell Canada, began operation in January 2004 and reached its design capacity of 25 000 m3/d in mid-2005.
In-Situ Reserves. Established reserves are based on economic cutoff limits and recovery factors. Commercial projects, given production history, were assigned thermal recovery factors from 25-40%, depending on the producing formation. A relatively small quantity, 0.2 bcm, has been produced by in-situ projects.
Prior to the extraordinary increase in world crude oil prices since 2002, thermal production of bitumen from oil sands was stagnant, at approximately 48 000 m3/d. Supply was dominated by cyclic steam projects of Imperial Oil at Cold Lake, and Canadian Natural Resources at Primrose, both projects initiated before the 1986 collapse in world oil prices. The 1996 agreement between Alberta and Ottawa on a generic oil sands regime, and the recovery of world prices which began in early 1999 encouraged the owners of oil sands to begin cautiously advancing in-situ projects. Since 2002, project proposals have grown dramatically.
The following table summarises the largest commercial and proposed projects.
Oil sands production will become an increasing part of Canada's crude oil supply, despite some challenges such as: capital cost escalation, operating costs, labour and infrastructure availability.
Record high oil prices have raised international awareness of Alberta's oil sands resources. Proposed projects for surface mining and in-situ reserves have mushroomed in the heated market for crude supply. Recent projections suggest that oil sands output could increase to between 240 000 m3/d and 480 000 m3/d by 2015, depending on the economic conditions.