Kalina ScherbelDecember 4, 2003

North American Tar Baby:

Draining the Alberta Oil Sands

OVERVIEW

Oil sand & bitumen

Location

Abundance

Comparisons to the world market

Positive Implications

WHAT ARE OIL SANDS? Also known as tar sands Sand and other rock material which

contains a heavy oil called bitumen Oil sand is composed of approximately

70% sand and clay, 10% water, and anywhere from 0% to 18% oil.

The sand is a silica quartz and is extremely abrasive

Each grain of sand is surrounded by a film of water, which is then surrounded by oil

The sands are held firmly together by grain to grain contact.

BITUMEN: A STICKY SUBJECT heavy black viscous oil

thick, sticky form of crude oil much like cold molasses

must be rigorously treated to convert it into an upgraded crude oil before it can be used by refineries to produce gasoline and diesel fuels

is processed to make gasoline, fuel for our homes, and petroleum chemical products like plastics, fleece and even toothpaste

WHERE ARE THEY LOCATED?

HOW MUCH IS THERE?

An estimated 1.6 trillion barrels of oil was approximated as the initial deposit

Covers approximately 140,800 square kilometers (84,480 square miles)

178 billion barrels are recoverable with today’s technology 740,000 barrels are produced daily

315 billion barrels may someday be recovered with advanced technology

Alberta's oil sands comprise one of the world's two largest sources of bitumen; the other is in Venezuela

HOW ACCESSIBLE IS IT?

Approximately 10% of the oil is close enough to the surface to extract using surface mining techniques

The remaining oil, that comprises the bulk of it, will have to be extracted using in situ processes or vapor recovery extraction

HOW DOES IT COMPARE WORLDWIDE?

$28 to $31 per barrel of crude oil from oil sands $25 to $32 per barrel from the world supply

HOW DOES IT COMPARE TO THE DOMESTIC MARKET?

Domestic oil currently ranges from $20 to $24 per barrel

WHAT ARE THE ENVIRONMENTAL IMPLICATIONS?

Land Open pit mines The mine plan must

commit to return the area to it's former environmental condition

reclamation returns the disturbed land to a biological state that is just as, or even more, productive than it was before it was disturbed

Air sulfur dioxide, carbon

dioxide, nitrogen oxides, and water vapor

programs in place that measure the impact of sulfur dioxide emissions on the surrounding vegetation

Water water is recycled and

reused within the plant sites to reduce the amount of water being drawn out, and to prevent pollution of surrounding fresh water lakes and rivers

BEFORE

AFTER

HOW BIG OF AN ASSET IS CANADIAN OIL TO THE U.S.? Oil sands supply approximately 9% of the daily US crude

oil supply Each delayed or cancelled oil sands project means more

dependence on Russia, Mexico, or OPEC members, increasing the possibility of disruptions because of political unrest or terrorist activity

Common business practices, buried pipelines, and provisions in the North American Free Trade Agreement that govern energy mean this country is the most secure source of oil for the U.S

CLOSER TO HOME…

IN SUMMARY…

ECONOMICALLY BENEFICIAL FOR U.S.

AND CANADA

POLITICALLY SOUND

LOCAL RESOURCE

ABUNDANT