Valence Ships New Lithium-Ion Batteries as Promised
Ultra Low-Sulfur Diesel Regulations Take Effect in US

Regulator: Canadian Oil Sands Production May Triple by 2015

Projected growth in natural gas consumption in oil sands production.

The production of Alberta oil sands could nearly triple by 2015 to three million barrels per day, according to a new report by Canada’s National Energy Board (NEB): Canada’s Oil Sands—Opportunities and Challenges to 2015: An Update. Oil sands production output was 1.1 million barrels per day in 2005. The new report increases the NEB’s 2004 oil sands production estimate by almost 40%.

With the rapid increase in production come a number of increasingly significant challenges: availability and cost of resources required for production (natural gas and water), the environmental impact, distribution infrastructure (pipelines), labor constraints, and rising capital and operating costs, according to the report.

Greenhouse gases. Oil producers have reduced their greenhouse gas emissions through improvements in technology, but higher overall production output is causing total emissions to rise.

The production of bitumen and SCO [Synthetic Crude Oil] emits higher GHG emissions than the production of conventional crude oil and has been identified as the largest contributor to GHG emissions growth in Canada.

In the best case scenario, greenhouse gases emitted will drop to 0.073 tonnes per barrel by 2015 from a current level of about 0.076 tonnes GHG per barrel. In that same best case scenario, total GHG emissions will increase to about 67 megatonnes (Mt) in 2015, up from a current level of about 40 Mt.

Although carbon dioxide capture and sequestration, including its use for Enhanced Oil Recovery, is a possibility, according to the report, there is uncertainty over long-term storage policies, technologies, and transportation infrastructure (i.e., pipelines for the gas).

Water. Water is both a supply and an environmental concern. Oil-sands mining operations use large amounts of water, and a variety of regional multi-stakeholder groups agree that the Athabasca River does not have sufficient flows to support the needs of all planned oil-sands mining operations.

Both mining and in situ operations use large volumes of water for extracting bitumen from the oil sands. Between 2 to 4.5 barrels of water are withdrawn, primarily from the Athabasca River, to produce each barrel of synthetic crude oil (SCO) in a mining operation. Currently, approved oil sands mining projects are licensed to divert 370 million cubic metres (2.3 billion barrels) of freshwater per year from the Athabasca River.

Planned oil sands mines would push the cumulative withdrawal to 529 million cubic meters (3.3 billion barrels) per year. Despite some recycling, almost all of the water withdrawn for oil sands operations ends up in tailings ponds.

Stakeholders agree that the Athabasca River does not have sufficient flows to support the needs of all planned oil sands mining operations. Adequate river flows are necessary to ensure the ecological sustainability of the Athabasca River. In winter, river flows are naturally lower with low rates of precipitation, and therefore, water withdrawal during this period is of particular concern.

Natural gas. Natural gas is used both for electricity generation and for the processing of the sands. For integrated mining projects, the intensity of use (natural gas per barrel) increases as the upgraders move to producing higher-quality product—the processing of which requires more hydrogen.

Efficiency improvements in SAGD and CSS operations are also anticipated through technological innovation, such as low-pressure SAGD or solvent aided production. However, going forward, as existing projects expand and new projects are initiated, it is likely that operators will be facing declining quality of bitumen reservoirs, with a resultant increase in energy required.

Ongoing efficiency improvements, technological innovation and gas substitution (gasification of bitumen or coke), will result in an improvement in average gas intensity (factoring in both mining, with lower requirements, and in situ production) to about 0.9 thousand cubic feet (Mcf) per barrel by 2015, down from a current 1.1 thousand cubic feet. However, total use will climb to about 2.1 billion cubic feet per day in 2015, up from about .7 billion cubic feet per day in 2005, and about 1.1 billion cubic feet this year.

The NEB is an independent federal agency that regulates several aspects of Canada’s energy industry. As part of its mandate, the NEB monitors the supply of all energy commodities in Canada and publishes reports on energy, called Energy Market Assessments.



Harvey D.

The NEB is confirming what many suspected that direct Tar Sands Activity is a highly polluting business.

Direct GHG at 73 Kg/barrel reached 80.3 million tons rate in 2005 and will reach 241 million tons yearly rate in 2015.

Waste water pumped yearly in tailings ponds will go from 1.875 billion barrel in 2005 to 5.475 billion barrels in 2015. This will create an expanding gooey Great Lake in northern Alberta. Who will clean it up? How much will it cost? What will be the effect of this goo on wild life and environment and the people living in the area.

What will happen down stream when the Athabasca River is completely drained for Tar Sands activities. Where will extra water come from?

Natural Gas usage will go down from 1.1 to 0.9 million cu. ft. per barrel. However, the total will go up about 250% by 2015. This is a lot of NG on an annual basis. (you do the maths) This huge increase in NG consumption will cause the price to go up thoughout North America.

This type of activity is presently too dirty and too energy consumming for an export product. At best, it should be limited to satisfy the essential local market, until such time as a cleaner and more efficient way is found to extract oil from sands. It is presently worse than importing polluting garbage for a living. Even third world countries no longer accept that.

fyi CO2

Unfortunately if the Sands were in the US- we'd be knee deep in it already- since it's so good for the economy (sic) never mind the long term costs.
Yankee politicians (oil lobbyists, etc.) keep trying to get 2% of our current oil consumption in 10 years if we drill in ANWR.


your natural gas usage numbers are incorrect:"0.9 million cubic feet per barrel by 2015" is very high number per barrel.
you made a mistake on " 0.9 million cubic feet per barrel by 2015" Mcf is thousand cubic feet, not million cubic feet See page vi for yourself.

1 cubic feet of natural gas = 1031 British Thermal Units (BTUs) * 900,000 cubic feet = 927,900,000 BTU
Gasoline = 125,000BTU/gallon *19 gallons per barrel of oil = 5,250,000 BTU


Yikes! Corrected, thank you. The gross consumption figure remains the same: 2.1 Bcf/d (Billion cubic feet per day.)


that's bad news. More use of oil sands will not only destroy thousands of hectares of landscape, it will also lead to a (additional) decrease of the oil price. And this is very negative for the real alternative energy sources.

Mark R. W. Jr.

While developing oil sands and shale is a good idea (as it would lessen dependence on foreign oil), we'll have to consider better ways to extract oil from the stuff that is both resource-effective, cost-efficient, and more environmentally safer.

Any ideas?


I say develop the technology and techniques and then keep them for a rainy day.

Continue working on alternative energy sources and keep these type of resources as an emergency method to keep from being crippled but otherwise we should not make use of it yet.


I read a ton of news about how this process is projected to become a new financial windfall for the Canadian economy, but absolutely NOTHING about any efforts made to refine it. It's almost like the entire reality of the last fifty years of major refining industries doesn't even occur to them.

"Natural resources are plentiful, and here to be used up by man."

Might have worked in 1950. It's just embarassing now.

Though technically, is there anything that can be done to polish what seems like a pretty lousy process to begin with?


The Canadians are failing miserably with respect to cutting greenhouse gases. This won't help.

But hey. What has the future ever done for me?

Rafael Seidl

Tar sand mining technology has hardly been standing still. The hydrocarbons are too valuable for that. Open-pit mining is only used for very shallow deposits. Deeper down, steam is injected to reduce the viscosity of the tar so it can be pumped to the surface. Some 85-90% of the hydrocarbons brought up are extracted, the remaining fouled liquid is recycled up to 17 times. Only then is it dumped in a huge tailing pond, for inertial separation of the heaviest tars and the water.

In spite of these improvements, three serious problems remain:

(1) the water is drawn from local rivers and/or underground aquifers, and much of it is lost as low-grade steam in various process steps

(2) valuable natural gas rather is used to produce the steam, rather than renewables like wood or else geothermal heat

(3) the tailing ponds are a direct threat to wildlife, and pose a risk due to seepage etc.

The industry will need to address all three of these, not just to avoid PR damage but simply to sustain their rapidly growing operations. Nevertheless, Canada would be wise to demand signficant investment in mitigation technology development now that the oil price and profits are high. If oil were to go back down below e.g. $40, the companies will have little or no commercial incentive to comply. If that seems an outlandish scenario, review the size of the relative peaks and troughs of past oil price booms.

Harvey D.

Up to now, the majority of the Oil extracted has been with the open-pit mining method in shallow deposits. Extraction from deeper deposits cannot be done economically by open-pit mining and will be done using the In Situ method.

In Situ extraction may be less disturbing for the (above ground) environment but uses huge amount of water, steam, and energy. If the energy required is produced with natural gas, it produces less pollution but the price is too high. If coal fired plants are used, the price for energy is much lower but the pollution created could make the In Situ process as polluting as the open-pit mining method. Since production cost is next to God to most of us and coal is available locally you can put your money on COAL.

Regardless of which method is used, it is dirty fuel source for our gas guzzlers.

Paul Dietz

Any ideas?

It's been proposed to use CANDU nuclear reactors to produce the heat to mobilize the tar.


I read on here that this is one of the reasons Canada cannot meet Kyoto.
Ironic that they miss the targets to satisfy the needs of US SUVs.


Actauly alot of the oil they are making is going to china not america.

And yes they have improved the process a great deal bringing the costs down quite a bit.

As for all other issues... 1 trillion dollars... thats what this project is worth so unless you have 1 trillion bucks your not gona stop it.

Rafael Seidl

Using coal instead of natural gas might be a good idea if the hot CO2-rich exhaust can be used to reduce the viscosity of the tar sand prior to steam injection and in-situ hydrocracking.

Using nuclear energy to produce oil seems a complete non-sequitur to me. If you must pollute the planet with radioactive waste, at least produce high-value electricity with it and use it directly.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.


Post a comment

Your Information

(Name is required. Email address will not be displayed with the comment.)