Chapter 4 - The Alberta Oil Sands: Reserves and Supply Outlook

Abstract

Alberta's oil sand deposits are among the largest crude oil resources in the world. Production of the resource has significant challenges; however, because of the massive size of the resource and the potential it offers, it continues to gain in global importance. In the current economic environment, large volumes of Alberta oil sands are economically recoverable. The estimated supply costs for active and potential oil sand projects are substantially below current global crude oil prices, as represented by WTI crude. Although Alberta's oil sands represent one of the highest marginal cost crude oils that can be produced, the vastness of the bitumen resource has attracted crude oil producers from around the globe. The combination of a credible resource base and current crude prices is generating investment in extraction projects; as a result, this has further influenced investment across North America, with expansions, reversals and new crude oil transportation pipelines, bitumen upgraders, and downstream refineries. The established reserves of Alberta crude bitumen have been compared to the reserves of Saudi Arabia in size. Crude bitumen production in Alberta has more than doubled in this time and is expected to reach over 3 million barrels a day over the next decade as the pace of oil sands development accelerates. This chapter presents a detailed analysis of potential production from this vast resource, with consideration of reserves, markets and the economic viability of crude bitumen production within Alberta.