Stakeholder: Industry – Oil
Information from:
http://www.investopedia.com/terms/o/oilsand.asp
http://www.oilsandstoday.ca/ENERGYECONENVIRON/Pages/EconomicC
ontribution.aspx
Sand and rock material which contains crude bitumen (a heavy, viscous
form of crude oil). Oil sands are found primarily in the Athabasca region of
northern Alberta, Canada. Bitumen is extracted and processed using two
methods:
1. Mining - Large areas of land are cleared of trees and brush, then the top
soil and clay are removed to expose the oil sand. This surface mining
method uses large trucks and shovels to remove the sand, which can have a
volume of anywhere from 1-20% of actual bitumen. After processing and
upgrading, the end result is sent to refineries, where it's made into gasoline,
jet fuel and other petroleum products.
2. In Situ - This relatively new method is mainly used to get bitumen in oil
sand that is buried too deep below the earth's surface to be recovered with a
truck and shovel. In situ technology injects steam deep beneath the earth to
separate the viscous bitumen from the sand and pump it up to the surface.
The bitumen then goes through the same upgrading process as it would in
the mining method.
Alberta Oil Sands
The Alberta government estimates that there are 1.7 to 2.5 trillion barrels of
oil trapped in the oil sands, but some industry groups and organizations
dispute this claim. The end product from oil sand is very similar to, if not
better than, that of conventional oil extraction (using oil rigs). But the
intensive mining, extraction and upgrading process means that oil from oil
sands typically costs several times more money to produce than
conventional methods.
1. The mining method is considered to be very damaging to the
environment, as it involves leveling hundreds of square miles of land, trees
and wildlife. Oil companies using this method are required to return the area
to its original environmental condition once the mining is completed, adding
further to costs.
2. The in situ method is more costly than the mining method, but it's much
less damaging to the environment, requiring only a few hundred meters of
land and a nearby water source to operate. It's estimated by the Alberta
government that 70-80% of oil in the oil sands is buried too deep for open
pit mining; therefore, in situ methods will likely be the future of extracting
oil from oil sands. The most common form of in situ is called Steam
Assisted Gravity Drainage (SAGD).
Benefits of Oil Extraction
The oil sands industry has nation-wide benefits
New oil sands development is expected to contribute over $2.1
trillion (2010 dollars) to the Canadian economy over the next 25 years
– about $84 billion per year (CERI 2011). According to Statistics
Canada, $84 billion is enough to feed more than 90% of Canadian
households for a year.
The oil sands industry will pay an estimated $783 billion in
provincial ($122 billion) and federal ($311 billion) taxes and
provincial royalties ($350 billion) over the next 25 years. Source:
CERI 2011.
Employment in Canada as a result of new oil sands investments
is expected to grow from 75,000 jobs in 2010 to 905,000 jobs in 2035
with 126,000 jobs being sourced in provinces other than Alberta.
Source: CERI 2011.
It is estimated the oil sands industry will purchase about $117
billion in supplies and services from Canadian provinces outside
Alberta over the next 25 years – about $5 billion/year. Source: CERI
2011.
For every direct job created in Alberta’s oil sands industry,
approximately one indirect and one induced job will be created in the rest of
Canada. Source: CERI 2011.