Canadian Oil Sands: Managing the Delicate Balance
International Energy Agency Conference on Non-Conventional Oil
Calgary, November 25-26, 2002
Alberta’s Oil Sands
Magnitude of the Resource
World Scale Oil Resource (Billions of Barrels)
350
6
Produced
300
Remaining
250
200
150
100
17.5
50
48 265 315
0
Canadian Conventional Saudi Arabia Canadian Oil Sands
Oil Sands Investment
$17B invested in projects since 1995
$7B in current construction
$30B in new investments forecast
$54 B
Canada’s Oil Sands Resource in Perspective
Western Canadian Crude Oil Production
5500
Actual
4500
Future
Potential
(000) Barrels per day
3500
$30B + $7B Under
2500
Construction
Oil Sands
1500
Conventional
500
1985 1990 1995 2000 2005 2010 2015
Source: Actuals - CAPP; F/C - Athabasca Oil Sands Developers - May/2002
The Environment Challenge in Perspective
Stakeholder Market
Support Access
Regulatory Technology/
Approvals R&D
Investment
Environmental
Climate/
Requirements Fiscal Terms
Risks
Skilled
Capital Costs
Trades
Financial
Production/
Market
Support Reliability
Operating Commodity
Costs Prices
Environmental Issues
The Cumulative Effects Challenge
Acidic emissions
Water management
Tailings management
Development and reclamation
Fish and wildlife
Energy intensity
Traditional ecological knowledge
Oil Production Increases 342%
... total annual emissions of sulphur dioxide reduced 73%*
2500 250
2001 Data
2000 200
SO2 Emissions (thousand tonnes/yr)
K Barrels/Day
1500 150
1000 100
500 50
0 0
1990 1995 2000 2005 2010
* vs. 1995
Flows – Athabasca River
Athabasca River Below McMurray
Discharge (m3/s)
1000
100
Apr May Jun Jul Aug Sep Oct
Oil Sands Water Use – Athabasca River
Diversions: Potential Oil Sands Licensees
12
10
Withdrawal, m3/s
8
6
4
2
0
02
05
08
11
17
23
26
29
32
35
38
14
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Future Predicted Future Licensed
Flows – Athabasca River
Athabasca River Below McMurray
Discharge (m3/s)
1000
100
Apr May Jun Jul Aug Sep Oct
Tailings Management
Key Milestones in Tailings Management
• Initially, large tailings ponds with long residence
times
• Ongoing research toward consolidated and
thickened tailings
Result – overall tailings footprint reduced
• Need for tailings ponds eliminated
• In-pit disposal possible
• Trafficable surface, suitable for reclamation
Reclamation
Graph of disturbance/reclamation over life of project
Total Disturbance vs Total Reclaimed Area
14000
Total Disturbed Area (ha)
12000
Total Reclaimed Area (ha)
10000
8000
Area (ha)
6000
4000
2000
0
2002 2007 2012 2017 2022 2027 2032 2037
53% Reduction in CO2E emissions/bbl
2.6%/year improvement
2500 0.1600
0.1400
2000
0.1200
Tonnes C0 2E/Barrel
0.1000
M Barrels/Year
1500
M Barrels/Year
0.0800
Tonnes C02/Barrel
1000
0.0600
0.0400
500
0.0200
0 0.0000
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
2007 Greenhouse Gas Life Cycles Estimates
4500
KG CO2E 1000 litre Transport Fuel
4000
3500
3000
2500
2000
1500
1000
500
0
U.S. Nigerian Mexican*Canadian Canadian Venezuelan
Canadian Brent Arab*
Imported Excravos*
Light Blend Light S.C.O. Bitumen Partial
Crude Blend Upgrader*
Basket
Transport Fuels Combustion Refining Production
Byproduct Combustion** Transportation
* Non- Kyoto Agreement Country. ** Includes upgrader coke product use by others, where applicable.
The Road Ahead
Greater cost reductions
More efficient and economic low energy processes
Fewer environmental impacts
Better cumulative effects management
Even greater investor confidence