Oil sands in Alberta hold an estimated 175 billion barrels of recoverable resource. 20% of recoverable resource (35 billion barrels) is less than 50 metres deep and lends itself to mining recovery. 80% of recoverable resource (140 billion barrels) is greater than 50 metres deep and will require in-situ methodology for extraction. (click here for more info on SAGD)

Enerplus is one of the only conventional oil & gas trusts with a significant interest in the oil sands.

What are oil sands and heavy oil?
The oil sands is a mix of naturally occurring bitumen, a thick, sticky oil, and abrasive sand. Oil sands in the Athabasca deposit is composed of sand, oil, clay, and water. The oil in the oil sands is called bitumen and it looks very much like tar because it is black, thick and heavy.

Geologists speculate that the oil sands formed millions of years ago from the remains of tiny creatures buried in the seabed of an ancient ocean that covered Alberta. Warm temperatures, combined with the slow accumulation of thick layers of silt and sand, pressure cooked these remains and converted them into oil. This oil eventually migrated, saturating large areas of sand near the surface. Bacteria then fed on the lighter hydrocarbon chains in the oil, leaving behind only the molasses-like bitumen.

Conventional crude oil is oil that flows naturally or that can be pumped without being heated or diluted. Crude oil is commonly classified as light, medium heavy or extra heavy, referring to its gravity as measured on the American Petroleum Institute (API) Scale. Extra heavy oil (bitumen) has an API gravity of less than 10°. Heavy oil is oil that is not recoverable in its natural state through a well by ordinary production methods. Heavy oil can be produced with horizontal production wells. Extra heavy oil is produced using sand production and worm hole technology.

Viscosity is the property that defines a fluids ability to flow. The viscosity of bitumen at virgin reservoir conditions (~12°C) is 1.7 million cP; [viscosity varies from 1.0 to 1.7 million cP] in other words, the consistency of a warm hockey puck.

Bitumen Viscosity vs. Temperature

Where are oil sands found?
Alberta, Canada sits atop the largest known deposit of oil sands in the world. The sands are sourced in three main areas; The Athabasca, Cold Lake, and Peace River, which combined cover a 140,800 square kilometre area. The deposits are buried at varying depths beneath the earth's surface and are mostly covered by muskeg, sandstone, and shale, which together are known as "overburden" (a phrase used in mining recovery) . The proven reserves of these deposits are over 174 billion barrels based on current economics and commercial technologies.

How are oil sands and heavy oil used?
Heavy oil and bitumen are used to make the same petroleum products as conventional forms of crude oil; however, more processing is required. Bitumen lends itself more towards diesel and jet fuel than gasoline and lighter products associated with conventional oil.

How are oil sands and heavy oil found?
Shallow oil sands are identified by thick viscous oil seeping from the ground. It is found with 10,000+ drill holes and to some extent seismic is used to delineate the thickness and extent in more detail of some of the high quality deposits. Deeper deposits have been identified using Automated 2-D Electrical Imaging, a geophysical technique that plots electrical conductivity variations in the earth.

How are oil sands and heavy oil produced?
Steam is often used to facilitate production by softening the bitumen, diluting and separating it from sand grains, and enlarging or creating channels and cracks through which the diluted oil can flow. The two most successful methods are cyclic steam stimulation and steam assisted gravity drainage (SAGD). Mining is also utilized to produce in a more shallow project.

How are heavy oil and bitumen processed?
Heavy oil and bitumen consist of large hydrocarbon molecules, which contain proportionately more carbon atoms than hydrogen atoms. Upgrading processes add hydrogen atoms and/or remove carbon atoms, which converts the bitumen into a product similar to conventional light crude oil.

At the extraction plant, the oil sands slurry (oil sands and water) enters a primary separation vessel where "froth" (a mix of air, water and bitumen) rises to the top, sand sinks to the bottom, and a blend of water, sand, bitumen and clay floats in the middle before going through a second separation process to extract additional bitumen. The bitumen froth is further processed to remove more water and solids, then diluted, and finally passed through centrifuges, or inclined plate settlers, to eliminate the last of the water and solids. The extraction process recovers more than 90 percent of the bitumen fed to the plant. (This is applicable to mining and not to SAGD.)

Upgrading
The nature of bitumen requires that its large molecules be split, or "cracked" into smaller fragments. Adding hydrogen (hydro-cracking) or removing carbon (coking) creates smaller hydrocarbon molecules that are easier to process.

The bitumen upgrading process removes most of the sulphur before the product is shipped to refineries, creating a sweet synthetic crude oil. The petroleum products are sent to a hydrotreater, where chemical impurities and trace metals are removed. This prevents the synthetic crude oil from changing its chemical composition while en route to the refineries. (SAGD may involve shipping raw bitumen with diluent directly to the refineries without upgrading.)

Environment
The EUB, Alberta Environment, and Alberta Sustainable Resource Development work to ensure that air, soil, and water quality are protected in the oil sands regions. Each organization has enforcement activities to protect the integrity of the environment. The EUB ensures that companies comply with Alberta Environment regulations at their oil sands operations.

Under the Alberta Environment Department’s Environmental Assessment Process - a legislated process designed to assess potential effects of proposed projects on the environment in a clear and consistent manner - an environmental impact assessment (EIA) report gives legislators the tools they need to weigh the potential affect of a proposed development on the environment.

One of the biggest challenges of the mining industry is to reduce the disturbance to the boreal forest and the ecosystems within it.

Reclamation
When the oil sands companies are finished mining, they must return that area of land to a natural area that will support wildlife. Returning the area back to nature is called reclamation. The leftover tailings sand is used to fill in the mine pit. Topsoil and overburden that was originally removed is placed on top of the sand. Grasses, shrubs and trees are planted on the overburden to return the area into forest, grassland, wetland or a combined forest/grassland/wetland area.

Oil sands timeline
1875: John Macoun carries out the first government sponsored geological study of the oil sands.
1925: Karl Clark of the Alberta Research Council demonstrates the first separation method using hot water and caustic soda.
1936: Abasand Oils Ltd. obtains gas, fuel oil and asphalt from the oil sands by means of a separation method that uses hot water and solvents.
1940's: Shell first explores Athabasca oil sands.
1962: Alberta government announces an oil sands policy to provide for the orderly development of oil sands in such a manner that it would supplement, not displace, conventional crude oil policy.
1967: The world's first oil sands operation, Great Canadian Oil Sands plant, is completed at a cost of $240 million and begins processing bitumen into synthetic crude oil.
1986: Technological advances reduce the cost of producing a barrel of upgraded crude oil.
1990: Upgrading of bitumen and heavy oil into low sulphur begins.
1991: Husky Oil Lloydminster Upgrader comes on stream.
2001: First year that bitumen production exceeded conventional crude production in Alberta.

Fact:
It takes 2 tonnes of oil sands that is mined to extract enough oil to make one barrel. One barrel contains 42 U.S. gallons, 35 imperial gallons or 159 litres.