Canadian Oil Sands: Development and Future Outlook

The worldwide global demand for oil has grown by 150% since 1965 and 20% in the past 20 years to the current 80 million barrels per day, and is projected to grow by 50% more in the next 20 years [1]. The growth in global demand for oil comes at a time when the supply from relatively cheap conventional sources is declining, and reserves are not being replaced with new discoveries [2]. However, the world has over twice as much supply of heavy oil and bitumen than it does conventional oil. Not including hydrocarbons in oil shale, it is estimated that there are 8-9 trillion barrels of heavy oil and bitumen in place worldwide, of which potentially 900 billion barrels of oil are commercially exploitable with today’s technology [3]. Canada alone has, by some estimates, 175 billion barrels of bitumen reserves that can be processed with today’s technology, making it second only to Saudi Arabia in proven oil reserves in the world [4]. This figure remains controversial; a more cautious estimate has been of the order of 17 billion barrels as recoverable [5]. Regardless of the ‘true’ number, it is most important to assess what impact unconventional oil will have on the world oil supply and in what time frame, given the financial, economic, environmental, engineering and technological constraints. In this regard, the Western Canadian Sedimentary Basin, with its declining conventional oil and gas resources and its replacement requiring large investments in higher-risk but vast oil sands resources, provides a vital case study.