The Athabasca Oil Sands (also known colloquially as the Athabasca Tar Sands although there is no actual tar) are large deposits of bitumen, or extremely heavy crude oil, located in northeastern Alberta, Canada - roughly centered around the boomtown of Fort McMurray. These oil sands, hosted in the McMurray Formation, consist of a mixture of crude bitumen (a semi-solid form of crude oil), silica sand, clay minerals, and water. The Athabasca deposit is the largest reservoir of crude bitumen in the world and the largest of three major oil sands deposits in Alberta, along with the nearby Peace River and Cold Lake deposits. Together, these oil sand deposits lie under 141,000 square kilometres (54,000 sq mi) of sparsely populated boreal forest and muskeg (peat bogs) and contain about 1.7 trillion barrels (270 × 10
^9 m 3 ) of bitumen in-place, comparable in magnitude to the world's total proven reserves of conventional petroleum.With modern unconventional oil production technology, at least 10% of these deposits, or about 170 billion barrels (27 × 10
^9 m 3 ) were considered to be economically recoverable at 2006 prices, making Canada's total oil reserves the second largest in the world, after Saudi Arabia's. The Athabasca deposit is the only large oil sands reservoir in the world which is suitable for large-scale surface mining, although most of it can only be produced using more recently developed in-situ technology.History
The Athabasca oil sands are named after the Athabasca River which cuts through the heart of the deposit, and traces of the heavy oil are readily observed on the river banks. Historically, the bitumen was used by the indigenous Cree and Dene Aboriginal peoples to waterproof their canoes. The oil deposits are located within the boundaries of Treaty 8, and several First Nations of the area are involved with the sands.
The Athabasca oil sands first came to the attention of European fur traders in 1719 when Wa-pa-su, a Cree trader, brought a sample of bituminous sands to the Hudson's Bay Company post at York Factory on Hudson Bay where Henry Kelsey was the manager. In 1778, Peter Pond, another fur trader and a founder of the rival North West Company, became the first European to see the Athabasca deposits after discovering the Methye Portage which allowed access to the rich fur resources of the Athabasca River system from the Hudson Bay watershed.
In 1788, fur trader Alexander MacKenzie (who later discovered routes to both the Arctic and Pacific Oceans from this area) wrote: "At about 24 miles (39 km) from the fork (of the Athabasca and Clearwater Rivers) are some bituminous fountains into which a pole of 20 feet (6.1 m) long may be inserted without the least resistance. The bitumen is in a fluid state and when mixed with gum, the resinous substance collected from the spruce fir, it serves to gum the Indians' canoes." He was followed in 1799 by map maker David Thompson and in 1819 by British Naval officer Sir John Franklin.
Sir John Richardson did the first geological assessment of the oil sands in 1848 on his way north to search for Franklin's lost expedition. The first government-sponsored survey of the oil sands was initiated in 1875 by John Macoun, and in 1883, G.C. Hoffman of the Geological Survey of Canada tried separating the bitumen from oil sand with the use of water and reported that it separated readily. In 1888, Dr. Robert Bell, the director of the Geological Survey of Canada, reported to a Senate Committee that "The evidence ... points to the existence in the Athabasca and Mackenzie valleys of the most extensive petroleum field in America, if not the world."
In 1926, Dr. Karl Clark of the University of Alberta perfected a hot water separation process which became the basis of today's thermal extraction process. Several attempts to implement it had varying degrees of success, but it was 1967 before the first commercially viable operation began with the opening of the Great Canadian Oil Sands (now Suncor) plant using surfactants in the separation process developed by Dr. Earl W. Malmberg of Sun Oil Company.
Oil sands production
Commercial production of oil from the Athabasca oil sands began in 1967, when Great Canadian Oil Sands Limited (then a subsidiary of Sun Oil Company but now an independent company known as Suncor Energy) opened its first mine, producing 30,000 barrels per day (4,800 m 3 /d) of synthetic crude oil. Development was inhibited by declining world oil prices, and the second mine, operated by the Syncrude consortium, did not begin operating until 1978, after the 1973 oil crisis sparked investor interest. However, the price of oil subsided afterwards, and although the 1979 energy crisis caused oil prices to peak again, introduction of the National Energy Program by Pierre Trudeau discouraged foreign investment in the Canadian oil industry. During the 1980s, oil prices declined to very low levels, causing considerable retrenchment in the oil industry, and the third mine, operated by Shell Canada, did not begin operating until 2003. However, as a result of oil price increases since 2003, the existing mines have been greatly expanded and new ones are being planned.
According to the Alberta Energy and Utilities Board, 2005 production of crude bitumen in the Athabasca oil sands was as follows:
As of 2006, output of oil sands production had increased to 1.126 million barrels per day (179,000 m 3 /d) (bbl/d). Oil sands were the source of 62% of Alberta's total oil production and 47% of all oil produced in Canada. The Alberta government believes this level of production could reach 3 Mbbl/d (480,000 m 3 /d) by 2020 and possibly 5 Mbbl/d (790,000 m 3 /d) by 2030.
Future production
As of December 2008, the Canadian Association of Petroleum Producers revised its 2008-2020 crude oil forecasts to account for project cancellations and cutbacks as a result of the price declines in the second half of 2008. The revised forecast predicted that Canadian oil sands production would continue to grow, but at a slower rate than previously predicted. There would be minimal changes to 2008-2012 production, but by 2020 production could be 300,000 barrels per day (48,000 m 3 /d) less than its prior predictions. This would mean that Canadian oil sands production would grow from 1.2 million barrels per day (190,000 m 3 /d) in 2008 to 3.3 million barrels per day (520,000 m 3 /d) in 2020, and that total Canadian oil production would grow from 2.7 million barrels per day (430,000 m 3 /d) to 4.1 million barrels per day (650,000 m 3 /d) in 2020. Even accounting for project cancellations, this would place Canada among the four or five largest oil-producing countries in the world by 2020.
In early December 2007, London based BP and Calgary based Husky Energy announced a 50/50 joint venture to produce and refine bitumen from the Athabasca oil sands. BP would contribute its Toledo, Ohio refinery to the joint venture, while Husky would contribute its Sunrise oil sands project. Sunrise was planned to start producing 60,000 barrels per day (9,500 m 3 /d) of bitumen in 2012 and may reach 200,000 bpd (30,000 m 3 /d) by 2015-2020. BP would modify its Toledo refinery to process 170,000 bpd (27,000 m 3 /d) of bitumen directly to refined products. The joint venture would solve problems for both companies, since Husky was short of refining capacity, and BP had no presence in the oil sands. It was a change of strategy for BP, since the company historically has downplayed the importance of oil sands.
In mid December 2007, ConocoPhillips announced its intention to increase its oil sands production from 60,000 barrels per day (9,500 m 3 /d) to 1 million barrels per day (160,000 m 3 /d) over the next 20 years, which would make it the largest private sector oil sands producer in the world. ConocoPhillips currently holds the largest position in the Canadian oil sands with over 1 million acres (4000 km 2 ) under lease. Other major oil sands producers planning to increase their production include Royal Dutch Shell (to 770,000 bbl/d (122,000 m 3 /d); Syncrude Canada (to 550,000 bbl/d (87,000 m 3 /d); Suncor Energy (to 500,000 bbl/d (79,000 m 3 /d) and Canadian Natural Resources (to 500,000 bbl/d (79,000 m 3 /d). If all these plans come to fruition, these five companies will be producing over 3.3 million bbl/d (500,000 m 3 /d) of oil from oil sands by 2028.
Development
The key characteristic of the Athabasca deposit is that it is the only one shallow enough to be suitable for surface mining. About 10% of the Athabasca oil sands are covered by less than 75 metres (246 ft) of overburden. The mineable area as defined by the Alberta government covers 37 contiguous townships (about 3,400 km 2 /1,300 sq mi) north of the city of Fort McMurray. The overburden consists of 1 to 3 metres of water-logged muskeg on top of 0 to 75 metres of clay and barren sand, while the underlying oil sands are typically 40 to 60 metres thick and sit on top of relatively flat
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