Environmental Engineering Reference
In-Depth Information
Chapter 10
N
ORTH
A
MERICAN
O
IL
S
ANDS
:
H
ISTORY
OF
D
EVELOPMENT
,
P
ROSPECTS FOR THE
F
UTURE
*
Marc Humphries
Energy Policy
Resources, Science, and Industry Division
Abstract
When it comes to future reliable oil supplies, Canada's oil sands will likely account for a
greater share of U.S. oil imports. Oil sands account for about 46% of Canada's total oil
production and oil sands production is increasing as conventional oil production declines.
Since 2004, when a substantial portion of Canada's 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 about 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 (GCOS), established by U.S.-based Sunoco, later
renamed Suncor, began commercial production in 1967 at 12,000 barrels per day.
The U.S. experience with oil sands has been much different. The U.S. government
collaborated with several major oil companies as early as the 1930s to demonstrate mining of
and in-situ production from U.S. oil sand deposits. However, a number of obstacles, including
the remote and difficult topography, scattered deposits, and lack of water, have resulted in an
uneconomic oil resource base. Only modest amounts are being produced in Utah and
*
Excerpted from GAO Report RL34258, dated December 11, 2007.
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