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
Produced
300 250 200 150 100
6
Remaining
17.5
50
48
0
265 Saudi Arabia
315 Canadian Oil Sands
Canadian Conventional
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
(000) Barrels per day
Future Potential
3500
2500
$30B + $7B Under 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 Support Regulatory Approvals Environmental Requirements Market Access Technology/ R&D Investment Climate/ Fiscal Terms Skilled Trades Production/ Reliability Commodity Prices
Risks
Capital Costs Financial Market Support Operating Costs
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
2001 Data
250
1500
150
1000
100
500
50
0 1990
* vs. 1995
0
1995
2000
2005
2010
SO2 Emissions (thousand tonnes/yr)
2000
200
K Barrels/Day
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
20 02 20 05 20 08 20 11 20 17 20 23 20 26 20 29 20 32 20 35 20 14 20 20 20 38
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
Area (ha)
8000 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
M Barrels/Year
1500
0.1000
M Barrels/Year Tonnes C02/Barrel
1000 0.0800
0.0600
0.0400 500 0.0200
0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
0.0000
Tonnes C0 2E/Barrel
2007 Greenhouse Gas Life Cycles Estimates
KG CO2E 1000 litre Transport Fuel
4500 4000 3500 3000 2500 2000 1500 1000 500 0 Canadian Brent Light Blend Arab* Light
Nigerian Mexican*Canadian Canadian Venezuelan U.S. S.C.O. Bitumen Partial Imported Excravos* Blend Upgrader* Crude Basket Production Transport Fuels Combustion Refining Transportation Byproduct Combustion** * 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