Oil sands contain deposits of bitumen, a heavy, viscous oil. There are two methods currently used to extract bitumen from the ground: open pit mining and in situ (Latin for “in place”). Open pit mining resembles conventional mining techniques and is effective in extracting oil sands deposits near the surface. However, the bulk of Canada’s estimated oil sands deposits (80 percent) are too deep below the surface to use open pit mining.

 

The second method, in situ can reach these deeper deposits. In situ extraction involves the use of steam to separate bitumen from the surrounding sands and lift it to collection pools near the surface. To date, Canadian oil sands producers have employed each method almost equally, but future production will likely shift to emphasize in situ extraction. Once extracted, oil sands producers must add lighter Hydrocarbons to the bitumen to allow it to flow through pipelines. Upgraders then process the bitumen into “synthetic crude.” Some oil sands projects have integrated upgrading capacity, while others must send their raw bitumen production to another facility.

The Athabasca oil sands deposit, in northern Alberta, is one of largest oil sands deposits in the world. There are also sizable oil sands deposits on Melville Island in the Canadian Arctic, and two smaller deposits in northern Alberta near Cold Lake and Peace River.

All of the largest oil sands projects in the Athabasca area utilize open-pit mining. The Syncrude Project, operated by Canadian Oil Sands Limited, produced 280,000 bbl/d in 2004. The Suncor’s project has a total production capacity of 280,000 bbl/d, though a fire in 2005 caused a prolonged shutdown of the operation, with 2005 production averaging only 171,000 bbl/d. The Athabasca Oil Sands Project (AOSP), operated by Shell Canada, began production in 2002 and currently has a capacity of 155,000 bbl/d. AOSP suffered from a fire in January 2003 that shut production down for three months.