Page 28 - Sphere No.14 (Jul 2005)

Oil sands consist of a tar-like bitu-
men, originally formed as crude oil,
algae and microscopic creatures that
were “cooked” under immense pressure
over a period of hundreds of millions of
years. Relatively recently in geological
terms, the oil moved up to sandstone
levels nearer the surface where it was
reduced to bitumen by bacteria.
Until very recently, it was so hard to
extract oil from these bitumen deposits
and convert it into petroleum that large-
scale production did not seem viable.
But things have changed. Technological
advances and the global need for proven
energy sources are driving the rapid
development of Alberta’s oil sands
The likely rewards are enormous. The
Energy and Utilities Board of Alberta
estimates that there are around 1.5 tril-
lion barrels of bitumen in the province –
double the proven oil reserves of the
Middle East. It’s not all recoverable with
currently available technology but the
levels of accessible bitumen are still
huge. With around 300 billion barrels
currently available for extraction,
Alberta’s oil sands can supply more
energy than all the wells in Saudi
Arabia. That is enough oil to meet the
whole of North America’s projected
demand for the next 40 years.
The fast-increasing level of invest-
ment in Alberta’s oil sands reflects their
significance for the future of energy
supplies. Canada’s National Energy
Board forecasts that investment will
exceed US$48 billion by 2012.
Turning sand into oil
It is clear that the Alberta oil sands are
going to play a very significant role in
meeting global demand for energy in
the coming years. But they will not give
up their riches easily. Obtaining oil from
bitumen deposits is an expensive and
complex process. There are two princi-
pal methods of extraction, mining and
in-situ, both of which are being used in
the development of the Alberta reserves.
Mining was the first commercial pro-
duction technique used in areas of oil
sands and it still accounts for the largest
proportion of oil extracted from bitu-
men. It involves the construction of mas-
sive open-pit mines, plus the associated
extraction facilities, to separate the bitu-
men from the sand. Huge mechanical
shovels – some as tall as a seven storey
building – are used to dig up to 100
tonnes of sand, bitumen and rubble in a
single scoop. After the bitumen is sepa-
rated from the sand and other matter, it
is converted into synthetic crude oil.
This process works well in oil sands
reserves where the bitumen deposits are
relatively close to the surface. Much of
the bitumen is buried too deep for min-
ing, however, and other techniques
must be used. A newer technology, in-
Above: New construction work for
Husky’s first oil sands project. Right:
Once the bitumen has been blended
with a diluting solution, it can be
stored in conventional tanks. Below:
Husky facility for converting heavy
oil, such as that obtained from
bitumen, into high quality oil.
“We are very encouraged by the long-term potential of our oil sands resources.
They will play a significant role in Husky’s medium and long-term growth strategies.”
John C.S. Lau, President and CEO, Husky Energy Inc.