How Much Money Does The Alberta Oil Sands Make

What is crude oil?

Crude oil, also known as petroleum, is an energy-rich liquid consisting mainly of hydrocarbons. In Canada, Alberta's oil sands have the largest reserves of crude oil, but there are also large deposits off the coast of Atlantic Canada. Crude oil activities include exploration, drilling production, field processing, as well as storing and transporting oil.

Key facts

Canada is the fourth largest producer and third largest exporter of oil in the world
97% of Canada's proven oil reserves are located in the oil sands
98% of Canada's oil exports go to the U.S.
GHG emissions per barrel of oil produced in the oil sands have fallen 36% since 2000

Learn more about crude oil in Canada

International context

Find out how Canada's crude oil ranks on an international scale:

World production

World production* – 98.1 MMb/d (2019)
Rank	Country	Percentage of total
1	United States	19%
2	Saudi Arabia	12%
3	Russia	12%
4	Canada	6%
5	Iraq	5%

* includes crude oil, NGL, additives and other hydrocarbons (including the receipts of additives)

World exports

World exports* – 48.8 MMb/d (2018)
Rank	Country	Percentage of total
1	Saudi Arabia	15%
2	Russia	11%
3	Canada	8%
4	Iraq	8%
5	UAE	6%

* includes crude oil, NGL, additives and other hydrocarbons (including the receipts of additives)

World proved reserves

World proved reserves – 1,683 billion barrels (at the end of 2019)
Rank	Country	Percentage of total
1	Venezuela	18%
2	Saudi Arabia **	16%
3	Canada (97% of which is oil sands)	10%
4	Iran	9%
5	Iraq	9%

** Saudi Arabia and Kuwait reserves include the Saudi-Kuwaiti "neutral zone," with total proved reserves of 5 billion barrels

World shale oil resources

World technically recoverable shale oil* resources – 419 billion barrels (2015)
Rank	Country	Percentage of total
1	United States	19%
2	Russia	18%
3	China	8%
4	Argentina	6%
5	Libya	6%
13	Canada	2%

* Shale formations are a subset of low permeability tight oil formations

Supply and demand

In 2019, Canadian supply and demand of crude oil slightly increased from 2018.

Canadian production*: 4.7 MMb/d
Imports: 0.8 MMb/d
Exports: 3.8 MMb/d
Crude oil shipped to domestic refineries: 1.7 MMb/d

* includes condensates and pentanes plus

Canadian resources

The remaining established reserves* in Canada was recorded at 167.7 billion barrels of crude oil.

Text version

In 2019, Canada's proven reserves of crude oil totals 167.7 billion barrels. 162 billion are oil sands and 5.7 billion barrels are conventional.

* Reserves known to exist and recoverable under current technological and economic conditions
**Reserves also include proved reserves of pentanes plus (a crude-oil equivalent that is associated with oil production)

Oil sands

The oil sands accounted for 63% of Canada's oil production in 2019 or 2.95 million barrels per day. The oil sands have an estimated $325 billion of capital investment to date, including $10.2 billion in 2019.

Extracting bitumen

There are two methods of extracting bitumen from the oil sands: the mining method and the in situ method.

The mining method

50% of current production and 20% of oil sands reserves
In 2019, seven mining projects in Alberta produced approximately 1.61 million barrels a day:
- Syncrude Mining Project (354 Mb/d)
- Suncor Base Mine (290 Mb/d)
- CNRL Horizon Mine (234 Mb/d)
- Athabasca Oil Sands Project – Muskeg River (159 Mb/d) and Jackpine Mine (130 Mb/d)
- Imperial's Kearl Mine (280 Mb/d)
- Fort Hills (164 Mb/d)

Learn more about the open-pit mining process

Text version

The mining process, which can be used in formations of 75 meters or less, represents 50% of current oil sands production and 20% of oil sand resources.

The in situ method

50% of current production and 80% of resources
More than 20 projects in Alberta – largest in 2019 were Firebag and MacKay River (Suncor) at 217 Mb/d, Christina Lake (Cenovus) at 159 Mb/d, Foster Creek (Cenovus) at 159 Mb/d and Cold Lake (Imperial Oil) at 142 Mb/d.

Learn more about the in-situ production process

Text version

The in situ method, which can be used in formations that are deeper than 75 meters, represents 50% of current oil sands production and 80% of oil sand resources.

Bitumen upgrading

Upgrading is a method of processing the bitumen that is extracted from the oil sands. The crude bitumen from oil sands may be transported to upgraders for processing to make it lighter – "synthetic crude oil".

Bitumen may also be blended with diluent (e.g. condensates), and sold directly to refineries capable of processing heavier oils.

In 2019, 46% of the raw bitumen produced was sent for upgrading in Alberta
Major companies with upgrading capacity include Syncrude, Suncor, Shell, Canadian Natural Resources, Husky and Nexen-CNOOC
Total upgrading capacity in Canada of 1.33 million barrels per day

Learn more about upgrading and petroleum products in Canada

Environmental considerations

There are numerous environmental challenges that the oil sands face to Canada's air, water and land conservation.

Greenhouse gases

The oil sands account for 12% of Canada's total GHG emissions and 0.2% of global emissions. From 2000 to 2018 the emission intensity of oil sands operations dropped by approximately 36% as a result of technological and efficiency improvements, fewer venting emissions and reductions in the percentage of crude bitumen being upgraded to synthetic crude oil.

Water

Water management is a key challenge of the oil sands extraction process. The mining method uses 2.6 barrels of fresh water required per barrel of bitumen and the in situ method uses an average of 0.2 barrels of fresh water required per barrel of bitumen.

Oil sands producers recycle around 75% of the water used in established mines and approximately 86% for in situ production.

Land

Oil sands development is subject to environmental standards that are among the most stringent in the world. The Government of Alberta requires that companies remediate and reclaim 100% of the land after the oil sands have been extracted.

Reclamation means that land is returned to a self-sustaining ecosystem with local vegetation and wildlife.

Text version

The surface area of Canada's oil sands resources is 142,200 squared kilometers and is largely found in Alberta. The total mineable area is 4,800 squared kilometers, and the total area being mined is 953 squared kilometers. For comparison, Canada's total area is 10,000,000 squared kilometers, and the Canadian boreal forest is 2,700,000 squared kilometers.

Shale oil and light tight oil

Light tight oil (also called shale oil) is found in sedimentary rock characterized by very low permeability, typically shale rock. Light tight oil and shale oil are extracted by using horizontal drilling combined with multi-stage hydraulic fracturing – the same techniques used for shale gas extraction.

Resources in Canada and the U.S.

There is currently great potential for shale oil and light tight oil resources in Canada and the U.S. Tight oil resources are largely found in a belt ranging from central Alberta to southern Texas. The Permian (largely in West Texas), the Bakken (North Dakota, Montana, Saskatchewan, Manitoba) and the Eagle Ford (south Texas) tight oil formations are the largest sources of tight oil production in North America.

Prospective resources have also been identified throughout the Rocky Mountain region, the U.S. Gulf Coast and the northeastern U.S./Eastern Canada (including Anticosti Island and western Newfoundland and Labrador).

Learn more about shale and tight resources in Canada.

Production

Oil sands production has exceeded conventional oil production since 2010. In 2019, oil sands production was 2.9 million barrels per day compared to 1.7 million barrels per day of conventional oil production (including tight oil).

Text version

Oil sands production has generally been increasing since 2006, peaking at 2.9 million barrels per day in 2019. Conventional crude oil production also peaked in 2019 at 1.74 million barrels per day.

The 5 largest companies (Suncor, Canadian Natural Resources Limited, Imperial Oil, Husky and Cenovus) are responsible for over half of crude oil production in Canada.

Crude oil is produced across the country from coast to coast to coast. In 2019, Alberta had the highest amount of crude oil production in Canada.

Text version

In 2019, Alberta leads the provinces in crude oil production with 80.5% of Canada's total production, Saskatchewan produced 10.5%, and Newfoundland and Labrador produced 5.6%.

Text version

From 2011 to 2016 in western Canada, the number of oil wells completed has decreased from over 10,000 to less than 2,150. The number of completed wells has recovered somewhat since then, rising to 4,580 in 2017 and 4,685 in 2018, before declining again to 3,244 in 2019. The average metres drilled per well has increased steadily since 2003, from an average of 1,202 metres drilled in 2003 to 2,605 in 2019.

Trade

Canada produces more oil than it consumes and as a result, is a significant net exporter of crude oil.

In 2019, Canada was the largest foreign supplier of crude oil to the U.S., accounting for 48% of total U.S. crude oil imports and for 22% of U.S. refinery crude oil intake.

Canada exported 3.7 million barrels per day to the U.S. in 2019, 98% of all Canadian crude oil exports.

Text version

Exports of Canadian crude oil have been increasing since 2010, reaching 3.8 million barrels per day in 2019. Imports were 0.9 million barrels per day in 2006, but this number steadily declined between 2006 and 2014. After a slight increase in the previous two years, imports fell again in 2017 and 2018, to 0.68 and 0.63 million barrels per day. Throughout 2018 and 2019, imports of crude recommenced their growth, increasing to 0.82 and 0.84 million barrels per day, respectively. Due to the regional nature of Canadian refining markets, Canada also imports some crude oil.

Imports of crude oil and equivalents into Canada come from a wide range of countries.

Text version

Source countries of imports of crude oil to Canada in 2019 were: United States, 79%; Saudi Arabia, 12%; Russia, 2%; United Kingdom, 1%; Norway, 1%.

Prices

There are many different types of crude oil around the world, each with their own price:

West Texas Intermediate (WTI): Reference price for light crude oil delivered at Cushing, Oklahoma (a major pipeline hub) and used as the benchmark price for North American crudes.
Brent: Reference price for light crude oil delivered at the Sullom Voe terminal in the U.K. and used as a benchmark price for North Sea crudes, and for light crude traded around the world in coastal markets.
Canadian Light Sweet: Reference price for light crude oil (similar quality to WTI) delivered at Edmonton.
Western Canada Select (WCS): Reference price for heavy crude oil (e.g. blended bitumen) delivered at Hardisty, Alta. WCS is representative of the price of oil from the oil sands. It takes more energy to produce refined products (e.g. gasoline) from heavy crudes, therefore WCS trades at a discount to lighter crudes.
Maya: Reference price for heavy oil produced in Mexico (similar quality to WCS).

Explore crude oil pricing in Canada.

Text version

The monthly average prices of Brent and West Texas Intermediate crude oil, showing the differential between them. Between 2008 and 2020, the monthly average price of Brent had a range of 18.4 dollars to 132.7 dollars. Similarly, the monthly average price of West Texas Intermediate had a range of 16.7 dollars to 133.9 dollars.

Text version

The prices of Maya and Western Canada Select crude oil, showing the differential between them. Between 2008 and 20198, the monthly average price of Maya had a range of 13.6 dollars to 121.4 dollar whereas the monthly average price of Western Canada Select had a range of 3.50 dollars to 114.9 dollars.

Moving crude oil in Canada

Oil pipelines, as well as trucks, tanker ships and railways, transport crude oil between production areas, refineries, and export/import border points.

By pipeline

Canada has an extensive network of 840,000 kilometres of pipelines carrying crude oil to domestic and U.S. refineries. The current crude oil pipeline capacity exiting Western Canada is estimated at 3.9 million barrels per day.

Learn more about pipelines across Canada.

Key existing pipelines in Canada

Text version

Map showing some of the major crude oil pipelines across Canada. Source: National Energy Board

Enbridge

Mainline: Alberta to the U.S. Midwest and Ontario. The world's largest pipeline system for crude oil and petroleum products, serving Canada and the U.S. with an estimated capacity of 2,850,000b/d
Norman Wells Pipeline: from the Northwest Territories to Alberta
Line 9: from Sarnia to Montréal, returned to eastward flow and capacity expanded to 300,000b/d in 2015
Southern Lights: diluent from Chicago to Edmonton
Express-Platte: capacity to transport 280,000 b/d from Hardisty, Alta. to the U.S. Midwest

Kinder Morgan

North America's largest pipeline company and largest transporter of refined products
- Trans Mountain Line: capacity to transport 300,000b/d from Edmonton to British Columbia (crude oil and petroleum products)
- Puget Sound System: via the Trans Mountain Line ships crude oil from Abbotsford, BC to Washington State with a capacity of 180,000b/d
- Cochin Pipeline: transports diluents from Illinois to Fort Saskatchewan with a capacity of 95,000b/d

Pembina

Second-largest oil pipeline system in western Canada
- 9 pipelines for conventional and unconventional oil
- Bitumen Line: from Fort McMurray to Edmonton

Portland-Montreal Pipe Line

Crude oil ships from Portland, Maine to Montréal

TransCanada Pipeline

Keystone Pipeline (2010): capacity to transport 591,000b/d of oil from Hardisty, Alta. to the U.S. Midwest

By rail

In 2018, as production increases in Western Canada began to outpace pipeline capacity, shipments of crude oil by rail increased to fill the gap, more than doubling from their 2017 levels. Amidst the economic disruption beginning in Q1 2020, crude shipments surged beyond their 2019 peak, reaching a high of 412 Mb/d in February 2020. This upswing was promptly reversed in Q2, when shipments plummeted to their lowest level since 2016.

The estimated rail loading capacity out of western Canada in 2019 was approximately 2.8 million barrels per day.

Text version

The volume of crude oil exported by rail in the United States increased from nearly 16,000 barrels per day in the first quarter of 2012 to approximately 160,000 barrels per day in 2014. After the volume experienced declines in 2015 and 2016, a significant increase to approximately 232,000 barrels per day was noted in 2018. Rail exports of crude remained elevated throughout 2019, before surging again to a new peak average volume of 388,000 barrels per day in the first quarter of 2020. This figure plummeted to 85,000 barrels per day in the second quarter due to adverse conditions in the broader Canadian economy.

Sources

World production and exports: International Energy Agency Online Data Services

World proved reserves: Oil and Gas Journal (Worldwide Look at Reserves and Production)

Canadian resources: Canadian Association of Petroleum Producers Statistical Handbook table 2.6 (Crude Oil Remaining Established Reserves), table 2.1a (Crude Reserves); Alberta Energy Regulator ST98 (Alberta's Energy Reserves and Supply/Demand Outlook) table R4.5 (Conventional crude oil reserves as of each year-end), R3.2 (Reserve and production change highlights), table 1 (Resources, reserves and production summary)

Wells completed and metres drilled in Western Canada: Canadian Association of Petroleum Producers Statistical Handbook table 1.2 (2017 Drilling activity)

Canadian & provincial production: Statistic Canada tables 25-10-0014-01 and 25-10-0063-01 and NRCan analysis

Canadian supply and demand: Statistic Canada tables 25-10-0014-01, 25-10-0063-01, 25-10-0041-01 and 25-10-0039-01 and Statistic Canada International Merchandise Trade Database

Trade: Statistic Canada tables, 25-10-0041-01 and 25-10-0039-01 and Statistic Canada International Merchandise Trade Database, United States Energy Information Administration (Imports by Country of Origin, Refining and Processing, total crude oil and products, consumption/sales)

Prices: United States Energy Information Administration tables (Spot Prices for Crude Oil) and Sproule

Oil sands: Canadian Association of Petroleum Producers Statistical Handbook Table 4-16B (Canada Oil Sands Expenditures), Statistics Canada tables 34-10-0036-01, 25-10-0014-01 and 25-10-0063-01, Alberta Energy Regulator ST98 (Alberta's Energy Reserves and Supply/Demand Outlook) table S3.1 (Crude bitumen production), Canada's Oil Sands Innovation Alliance, CanOils Database and NRCan analysis

Light tight Oil/Shale Oil: United States Energy Information Administration (World Shale Gas Resources, Technically Recoverable Shale Oil Resources)

Reserves by provinces: Alberta Energy Regulator ST98 (Alberta's Energy Reserves and Supply/Demand Outlook) table R4.1 (Reserves and production changes in crude oil), table R4.5 (Conventional crude oil reserves as of each year-end), Canadian Association of Petroleum Producers Statistical table 2.1a (Crude Reserves) and Canada Energy Regulator

Environmental considerations: NRCan compiled using Environment and Climate Change Canada National Inventory Report 1990-2017: Greenhouse Gas Sources and Sinks in Canada, CAIT Climate Data Explorer, Alberta Government( Oil Sands Information Portal), Alberta Energy Regulator, Statistics Canada, NRCan Boreal forest website, Alberta Government Lower Athabasca Regional Plan and Canadian Association of Petroleum Producers (Frequently used statistics)

Pipelines: compiled by NRCan

Transportation: Statistic Canada Table 23-10-0216-01, Canadian Association of Petroleum Producers (Crude Oil Forecast, Markets & Transportation), Oil Sands Magazine (Crude-By-Rail Loading & Offloading Terminals), Canada Energy Regulator (Canadian Crude Oil Exports by Rail – Monthly Data) and various sources

Key Facts: CanOils Database