About the oil sands
The economic role of the oil sands
October 2024
Canada is the fourth-largest oil producer in the world, and this is only possible because of the oil sands.
As conventional oil production declined at the turn of the century, innovations in oil sands production took some big steps forward. This bitumen resource, which some had dismissed as too impractical, was now commercially viable—and it was a game changer.
Between 2001 and 2023, Canadian production rose by 2.8 million barrels per day¹. Nearly all this growth came from the oil sands. By 2022, Canada’s oil sands yielded 3.1 million barrels per day¹. Today, the oil sands remain an immense economic driver for Canada and Alberta, and a secure source of energy for the world¹.
1Source: S&P Global Commodity Insights, 2023
$34.1 billion
in federal and provincial income taxes and royalties paid by our industry in 2023
Source: Statistics Canada
214,000+
direct and indirect jobs in Canada
Source: Statista Oil Industry Employment Report, 2024
$155.4 billion
in energy exports in 2023
Source: Statistics Canada
6.9%
Indigenous representation in the oil and gas workforce compared to 3.9% in the Canadian workforce
Source: Indigenous Resource Network
Alberta has three primary deposit areas:
- Peace River
- Athabasca
- Cold Lake
The origins of the oil sands
People have known about Alberta’s oil sands for hundreds of years—long before these lands were known as Alberta. Indigenous people mixed the heavy oil known as bitumen with spruce gum to waterproof their canoes.
Commercial development of the Alberta oil sands didn’t begin until 1967. That’s largely because the qualities that made bitumen ideal for waterproofing canoes—it’s thick and viscous—make it difficult to get out of the ground.
The facts on bitumen
Alberta has 10% of the world’s oil reserves, mostly bitumen. The low-grade crude oil is so thick that it’s almost solid at room temperature (think cold molasses). To further complicate matters, bitumen occurs naturally in a mixture of sand, clay or other minerals and water. Together, this means that traditional drilling techniques can’t be used to extract bitumen.
The 20th century saw much research into ways to recover bitumen. A breakthrough came in 1929 when Dr. Karl Clark of the University of Alberta received a patent for a separation method using hot water and chemical agents.
The sand, water and clay left from mining operations gets deposited in temporary storage ponds. These tailings ponds allow us to recover the water that’s used in our operations so it can be reused.
Getting bitumen out of the ground
Clark’s innovation later formed the basis for steam-assisted gravity drainage (SAGD), the technology used for in situ (in-place) extraction. This is a crucial technology because about 80% of the oil sands are deep underground. These bitumen deposits are extracted using a steam process and two wells. Steam is injected into the first well, heating the underground reservoir so that the bitumen becomes less thick and flows to the second well and is pumped to the surface for processing.
Oil sands can also be mined when the deposits are closer to the surface. This is the case in about 3% of Alberta’s oil sands. Mining operations use hydraulic and electric shovels to dig the ore out of the ground. It’s then transported in large haul trucks to a crusher. Once the ore has been reduced to smaller pieces, hot water is used to separate the bitumen from the sand, clay and water. Finally, the bitumen is sent to a treatment plant for processing.
Minimizing impacts
The sand, water and clay left from mining operations get deposited in temporary storage ponds. These tailings ponds allow us to recover process water and reuse it in operations. Once the sand and clay settle in the ponds, they’re stored and used when the land is ready to be reclaimed.
By law, oil sands producers are required to return land to equivalent or greater capability once operations cease.
Our people, their stories
Passionate, dedicated people are behind every innovation and every step forward.