Oil Sands Development

Canada's energy future lies in the oil sands. Our country has about 170 billion barrels of oil that can be recovered with today's technology. Of that number, 165 billion are located in the oil sands.

There are two different methods of producing oil from the oil sands: open-pit mining and in situ (latin, meaning "in place"). Bitumen that is close to the surface is mined. Bitumen that is deep within the ground is produced in situ using specialized extraction techniques.

About 80 per cent of oil sands are recoverable through in situ production, with only 20 per cent recoverable by mining.

Open pit mining

Open-pit mining is similar to many coal mining operations – large shovels scoop the oil sand into trucks that then take it to crushers where the large clumps of earth are broken down. This mixture is then thinned out with water and transported to a plant, where the bitumen is separated from the other components and upgraded to create synthetic oil. This technique is sometimes misrepresented as the only method of mining oil sands. Just 20 per cent of the oil sands are recoverable through open-pit mining.

In situ drilling

About 80 per cent of oil sands reserves (which lie under approximately 97 per cent of the oil sands surface area) are recoverable through in situ technology, with limited surface disturbance.

Advances in technology, such as directional drilling, enable in situ operations to drill multiple wells (sometimes more than 20) from a single location, further reducing the surface disturbance.

The majority of in situ operations use steam-assisted gravity drainage, or SAGD. This method involves pumping steam underground through a horizontal well to liquefy the bitumen that is then pumped to the surface through a second well.

Heavy oil and bitumen processing

Since most refineries in Canada were designed to process conventional light crude oils, some heavy oil and about half the bitumen produced are upgraded to create synthetic crude oil. Synthetic oil is usually low in sulphur and contains no residue or very heavy components. Upgrading can occur at or near the producing area or the refinery.

Upgrading uses temperature, pressure and catalysts to crack the big molecules into smaller ones. Adding hydrogen or removing carbon from the oil creates hydrocarbon molecules like those in light oil. Upgraded oil is used as a replacement for conventional crude oil to make gasoline, diesel, jet fuel and heating oil.

Upgrading is usually a two-stage process:

  1. Coking or hydrocracking - used to break up the molecules. Coking removes the carbon, while hydrocracking adds hydrogen.
  2. Hydrotreating - used to stabilize the oil and remove impurities such as sulphur.

About 30 per cent of Canadian oil production is refined in Canada. Approximately 48 per cent of Canada's oil sands are upgraded locally.

Bitumen and some heavy oils are too viscus to flow through pipelines, as mandated by pipeline operators. Pipeline users would then have to dilute the product with condensate or other natural gas liquid before it could be transported. Once mixed with a diluent, the dilbit does not separate, but is a new mixture.