Achieving Balance The Canadian Oil Sands Story
Oil Sands
Oil Sands Projects in Three Deposits
In Situ ProjectsMining ProjectsIn Situ ProjectsMining Projects
FortMcMurray
Cold Lake
Fort Hills
Horizon
Joslyn Creek
Syncrude
Suncor
Muskeg RiverAlbian
Dover
MacKay River
Firebag
Hangingstone
Long Lake
Surmont
Christina Lake (ECA)
Foster Creek
Wolf Lake/Primrose
Hilda Lake
Cold Lake
Tucker Lake
Jackfish
KearlLake
Jackpine
Peace River
Peace River
Seal
Peace River
Peace River
Seal
Northern Lights
White Sands
Oil Sands ProductionTechnologies
5
Mining
20% of the oil sands resource is less than 200 feet deep3% of the oil sands land area
Source: Canadian Centre for Energy Information
Mining
7
Drilled Oil Sands
Source: Canadian Centre for Energy Information
80% of the oil sands resource is more than 200 feet deep97% of the oil sands land area
Steam Assisted Gravity Drainage (SAGD)
In Situ:• No mines• No tailings pond• No water from the
Athabasca River• Smaller footprint
Cyclic Steam Process
8
Example of SAGD project
Photo: ConocoPhillips - Surmont
Schematic: Devon - Jackfish
Why are oil sands so important?
Global Energy NeedsGlobal economic growth will require more energy of all kinds
Energy supply mix:Increasing role for renewablesContinuing reliance on hydrocarbonsDeclining conventional means increasing role for non-conventional crude oil & natural gas
Source: EIA ‐
International Energy Outlook 2008
World Energy Demand 1980 - 2030
0
100
200
300
400
500
600
700
800
1980 1990 2000 2010 2020 2030
R e n e w a b le sN u c le a rC o a lN a tu ra l G a sO il
Global Crude Oil Reserves by Country
Source: Oil & Gas Journal Dec. 2008
2 13 03 64 4
6 0
929 91 0 2
1 1 5
1 3 6
1 7 5
2 6 4
0
5 0
1 0 0
1 5 0
2 0 0
2 5 0
3 0 0
Sa udi A ra b ia Ca na da Ira n Ira q Kuw a it V e ne z ue la A bu Dha bi Rus s ia Liby a Nige r ia Ka zha khs t a n Unit e dSt a t e s
billi
on b
arre
ls
Includes 170 billi
on barrels
of oil s
ands reserves
OtherAccessibleReserves
OtherAccessibleReserves
OtherAccessibleReserves
State ownedor controlled
Accessible
Canada’sOil Sands
World OilReserves
OtherAccessibleReserves
53%
47%
AccessibleOil Reserves
Total Canadian Oil Production7th largest global producer and growing
The Canada-U.S. energy relationship is deeply integratedCanadian & U.S. Crude Oil Pipeline Proposals
Environmental Stewardship in Canada’s oil sandsAir, Land, Water
Guiding Principles for Oil Sands Development
PeopleWe will provide a safe environment for our employees, contractors and the communities where we operate.We will provide employment and business opportunities for regional communities, including Aboriginal peoples.We will consult with directly-affected stakeholders though all stages of our operations.
AirWe will design and operate our facilities to ensure that regional air quality continues to exceed provincial air quality objectives.We will continue to reduce greenhouse gas emissions per barrel of production by improving our energy efficiency and by developing new technologies.
Guiding Principles for Oil Sands Development
WaterWe will continue to reduce the amount of fresh water required per barrel of production by improving water recycle rates, using non-potable water sources where feasible, and by developing new technologies.We will safeguard the quality of regional surface and groundwater resources.
LandWe will mitigate our impact on the land while maintaining regional ecosystems and biodiversity.We will progressively reclaim all lands affected by oil sands operations, returning them to self-sustaining landscapes.
Managing Climate Change
The expected growth in oil sands production will add to GHG emissions in Canada, but improvements are ongoing
GHG intensity reduced by 33% from 1990 to 2007Government regulations to limit GHG emissions will continue improvementsSignificant investments in carbon capture and storage will play a role
GHG emissions from oil sands are:5% of Canada’s GHG emissions0.5% of United States GHG emissionsless than 0.1% of global GHG emissions
United States22%
China20%
Europe17%
Eurasia9%
Japan4%India4%Canada2%Australia
1%
Other21%
Global Energy Related Emissions By Country
Canada’s Greenhouse Gas PoliciesAlberta Government
Legislation passed, July 2007Requires immediate 12% reduction in emission intensity for large emittersCompliance mechanims:
Physical Reductions$15/tonne CO2 levy into Technology FundOffsets
$4 Billion investment$2 Billion to Carbon Capture
Shell’s Quest CCS Project$2 Billion to Public Transit
Federal GovernmentReductions of 20% from 2006 by 2020Focus on technologyCompatible with USUp to $1 billion for CCS
0
20
40
60
80
100
120
140
S au d i M e x ic o Iraq V e n e zu e la N ig e ria U S G u lfCo ast
Califo rn iaT h e rm al
O il S an d sM in in g -
U p g rad e dB it u m e n
In sit u o ilsan d s -D ilu e n t
B it u m e n
In sit u o ilsan d s -
U p g rad e dB it u m e n
In sit u o ilsan d s -
B it u m e n
g CO
2e/M
J ga
solin
e
GHG Emiss ions f romProduct ion a nd R e f in ing
GHG Emiss ions f rom Ga so lineC onsumpt ion
Full Cycle GHG Emissions
Source: Jacobs Consultancy, Life Cycle Assessment Comparison for North America and Imported Crudes, June 2009
App
rox
55%
of 2
008
oil s
ands
pro
duct
ion
App
rox
40%
of 2
008
oil s
ands
pro
duct
ion
App
rox
5% o
f 200
8 oi
l san
ds p
rodu
ctio
n
No
curr
ent p
rodu
ctio
n(li
kely
futu
re s
cena
rio)
98102 102 102 106 104
114108 105
116 113 Range of CommonU.S. Imported Crude Oils
U.S.Domestic
Common U.S.Conventional Oil Imports
Oil Sands
On a life cycle basis, oil sands have similar GHG emissions toother sources of oilFull cycle emissions or “wells to wheels” is the appropriate measure to use in setting carbon policies
Land
Footprint and ReclamationIn situ operations have a much smaller footprint, with road and pipeline infrastructure being the most obvious impact
Impact about 15% of lease surface areaOil Sands mining area is limited
Mineable area represents one-tenth of 1% of Canada’s boreal forestAfter 40 years of development, the area disturbed by mining is about 530 square kilometres - an area about 1/10th the size of metropolitan TorontoCompanies must restore land to productive status - land reclamation is a condition of approvalReclamation underway but it takes years - 12% of mined area to date is actively being reclaimed and 7.5 million seedlings have been plantedAlberta holds $820 million in reclamation security bonds from industry
ConocoPhilips Surmont In Situ Project
Syncrude Mine Reclamation
Water use from Alberta Rivers
23Source: Alberta Environment: state of the basin website
Water – Regulated and Monitored
Tailings Containment and Settling Ponds
Sour
ce:
OSD
G
Research on dry and consolidated tailings
CO2 injection into tailings – CNRL HorizonTailings Reduction Operations - Suncor
Drilled Oil Sands – Water Use
In sit
u Oil S
ands
Produc
tion
Saline Water
1985 1990 1995 2000 2005
Volu
me
(Milli
ons
m3 /yea
r)
Source: GEOWA, 2009 and CAPP, 2008
New Technology - Reducing Impacts
Less energy = less GHGLow energy extraction 35ºC instead of 80ºC = 1/3 less energy
Less water:THAI process uses underground combustion rather than steamUsing solvent to reduce the need for both water and energy (steam)Using electricity instead of steam to warm the bitumen underground
Saline (non-potable) water:Some new projects use 100% saline waterOther in situ oil projects significantly increasing saline water use
Syncrude Low Energy Extraction – Aurora Mine
Petrobank THAI process
Devon’s Jackfish In Situ project
Cambridge Energy Research AssociatesGrowth in the Canadian Oil Sands: Finding the New Balance
Council on Foreign RelationsThe Canadian Oil Sands: Energy Security vs. Climate Change
Alberta Energy Research Institute/Jacobs Eng.
Comparison of life cycle GHG among crude oil types
Canadian Energy Research InstituteEconomic Impacts of the Petroleum Industry
$1.7 trillion in economic benefit created
Third Party Studies
Economic Benefits and Jobs Across North America
Economic Benefits of Oil Sands (in Canada over the next 25 years)
Economic impact generated= $1.7 trillion (GDP)
Employment created= 11.4 million person-years
112,000 jobs rising to 500,000 jobs over 20 years
Government Revenues= $491 Billion
Federal Tax = $188 billionProvincial Tax = $118 billion
Alberta = 80% of totalAlberta Royalties = $185 billion
$7.4 billion per year
F e d e ra l T a x e s
P ro v in c ia l T a x e s
P ro v in c ia lR o ya ltie s
Impact of Oil Sands on US Economy and Jobs
National Impacts($US Billion)
2010 2015 2020 2025
U.S. Gross Domestic Product 11.5 34.0 40.4 42.2
National Impacts(Person Years)
2009- 2010
2011- 2015
2016- 2020
2021- 2025
U.S. Employment (Thousand) 172 343 88 22
CERI 2009
Oil Sands Benefits by State
Illinois55% of Illinois’ oil comes from Canada
In Illinois, oil Sands creates:$1.45 billion (2010-2025) in additional GDP14,600 person years employment (2011-2015)
Minnesota83% of Minnesota’s oil comes from Canada
In Minnesota oil sands creates:$588 billion (2010-2025) in additional GDP6800 person years employment (2011-2015)
Examples of Oil Sands partnerships Across North America
Integrated trade means that funds used to purchase crude oil from Canada are more likely to be spent in the U.S.Oil Sands Heavy Hauler Trucks
The 200th Caterpillar 797 hauler delivered April 2009The engine is made in Lafayette, Indiana; the largest frame component is cast in Amite, Louisiana, the cab is made in Joliet, Illinois welded together and the engine is installed in Decatur, Illinois; huge Michelin tires are made in Lexington, South CarolinaThe dump body and final assembly takes place at the mine site near Fort McMurray, Alberta
Oil Pipeline ConstructionBillions of dollars of pipelines being built
eg. Enbridge Clipper and TransCanada KeystoneUsing steel and creating jobsMajor regional economic stimulus
Refinery expansions underwaySeveral expansions and modifications are underwayProviding significant jobs and local benefits
Achieving Balance
Providing Energy Security
Ensuring Environmental Stewardship
Generating Economic Benefits
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