Introduction

This overview contains a brief review of the environmental regulatory aspects relating to oil sands project
development in Alberta. If you have any additional questions with respect to environmental issues associated with oil sands activities, please contact Dufferin Harper in our Calgary office at 403-260-9710 or at dufferin.harper@blakes.com. For permission to reprint this document, please contact Amanda Mueller in our Calgary office at 403-663-2222 or amanda.mueller@blakes.com.

Description of the Alberta Oil Sands

Oil sands are composed primarily of sand, bitumen, mineral-rich clays and water. Bitumen, in its raw state, is a heavy, viscous, crude oil. According to the Alberta government, Alberta's oil sands have 170.4 billion barrels of proven reversible reserves. These reserves are the second-highest source of proven crude oil reserves in the world, second only to Saudi Arabia.

Approximately 20% of the potentially recoverable bitumen is shallow enough to be mined, leaving approximately 80% of the resource to be exploited using in-situ techniques. The in-situ techniques currently in use employ steam to heat the bitumen, allowing it to flow into a well and transported to the surface. The two most common methods of in-situ production are cyclic steam stimulation (CCS) and steam-assisted gravity drainage (SAGD). The steam used in both processes is normally generated using natural gas, and natural gas is the primary input cost of both methods.

Bitumen is currently sold in two principal forms: either as a bitumen blend, in which the bitumen is mixed with a diluent (a very light hydrocarbon liquid, the density and viscosity of which is lower than bitumen) so that it will flow in pipelines; or, after upgrading, as a synthetic crude oil. Bitumen blend has many characteristics similar to conventional heavy oil. Synthetic crude oil, depending on the level of upgrading it has undergone, has many characteristics similar to conventional medium or light oil.

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