Oil sand in Canada (Case Study Sample)

Oil Sand in Canada: Discovering Full Potential
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Introduction
Energy is an important resource in the world in powering the activities and operations humans engage in to promote their welfare and that of the world. The world demand for energy has increased phenomenally over the past century, driven by such factors as a high rate of world population growth and increased economic activity and trade (Timilsina, et al, 2005). This demand has precipitated the need for other sources of energy besides the conventional ones, and the optimum exploitation of the existent ones in order to satisfy this demand. The oil sand in Alberta presents an opportunity to supplement available energy in the world.
The exploitation of oil sands in Alberta presents an opportunity for the government and citizens of the region to promote their own, and the world’s, welfare through the satisfaction of demand for energy, enhancing economic growth and development through enabling the provision of income and powering economic activity. The reason why we need to display interest in this issue is that exploitation of oil sand resources in the Alberta region poses certain dangers to the welfare necessary in human, plant, and animal life, the earth environment, and to future generations. It is therefore necessary for the government and other stakeholders in the region to consider all these aspects in their exploitation activities on the resource, to promote welfare from all these dimensions in a balanced manner. This is especially so given that oil sand exploitation differs from that of more conventional oil in its requirement of higher application of technology that has the potential to harm the above elements of welfare in the society and the world. Limitations for this study in the realization of full potential from the resource include lack of resources and technology to enhance processes and facilities to promote this welfare, and the force of demand for energy in the world, which drives the need to exploit the resource for financial gains (OAO, 2006). The latter renders the concerns for socioeconomic and environmental welfare less important for the society and the government, although it has significant impact on the welfare of human, plant, and animal life, the earth environment, and future generations.
This paper utilizes credible secondary sources of information in its analysis, including journals, websites, and books. Secondary sources of information are valid and reliable since they are the result of much research. The paper reviews literature on the subject from diverse sources to compare different views on the oil sands of Alberta, various challenges in the production of oil from the resource, and measures that authorities and other stakeholders could employ in the attempt to realize full resource potential. This paper discusses the oil sand in Alberta and the strategies available for the authorities to use in realizing full potential of the resource in the provision of energy to satisfy demand in the world. It achieves this through assessing the significance of the resource in the world of energy, and assessing the strategies that could apply in handling the various issues that production of energy from the resource presents. This analysis utilizes credible sources of information.
Oil Sand in Alberta: The Potential
Oil sand, or bituminous sand, is a kind of petroleum deposit that contains a mixture of natural clay soil, sand, and water. The oil sand contains a type of petroleum called bitumen, and features a high level of viscosity that causes it to flow extremely slowly. Oil sands are common in various parts of the world, but they occur in exceptionally huge quantities in the South American country of Venezuela and in Canada. In Canada, the oil sand appears in semi-solid and almost solid forms, largely because of the low temperature environments in reservoirs. It is thick, heavy, and sticky. There is need to raise its temperature through heating, or to dilute it through mixing it with lighter compounds, in order to make it flow. The resource requires additional treatment before it is ready for processing for energy production. Oil sand has received recognition as a source of oil for energy only recently: it is an unconventional source. This is because its nature, as described above, made it difficult in the past, in terms of both technology and economic profitability, to extract oil for use in the provision of energy. Advancements in technology and the rise in the prices of oil made these limitations less significant. In the modern times, there exists technology to extract oil from the resource relatively easily and profitably, given the high prices of oil in the world market. The high demand for oil in the world market has also made efforts to exploit all potential oil resources attractive for governments in the world. The process of exploitation of oil from oil sand however presents a major challenge for the welfare of the world and its population. This is because extraction involves processes such as refinery and injection of steam that result in 200-400% higher emission of greenhouse gases into the atmosphere than that in production from ordinary oil (Timilsina, et al, 2005).
Alberta is one of the three Provinces of the Canadian nation, located in the Western part of the country. The Province’s capital is Edmonton. Northern Alberta is the location of the majority of oil sands in Canada. The oil sand deposit in Athabasca in this region is the biggest and most developed in the world, utilizing highly advanced technology in the production process. Besides the Athabasca-Wabiskaw site, two other major oil sand deposits exist in Alberta: the Cold Lake and the Peace River sites, located to the north and east of the northeastern part of the region respectively. These three deposit sites together cover an area of more than 140,000km2. The sites hold a combined 1.75 trillion barrels of assured sand oil reserves. The authorities in the Province of Alberta estimate that a tenth of this potential, 173b barrels, are recoverable with the current conditions in the market and technological resources. Oil sand deposits in the Province of Alberta make up over four-fifths of naturally occurring bitumen in the world. This represents about two-fifths of the world’s total unrefined bitumen and reserves of extremely heavy crude petroleum. The oil sand deposits in Alberta feature levels of bitumen concentration that are absent in other oil sand deposits in the world. These levels of concentration enable economically viable exploitation for the production of artificial crude oil that can undergo sale on the world market at the prevailing prices. The Athabasca oil sand deposit, located along the Athabasca River, contains the biggest deposit of bitumen, making up four-fifths of the total bitumen deposit in the Alberta region. The deposit is also the only one among the three on which surface mining is applicable. The authorities in Alberta define the area on the deposit on which mining is possible as covering over 3,000 km2, over an area covering 37 small counties. Some of the oil in the Cold Lake deposit area has a lower level of viscosity that enables exploitation through more conventional procedures (Timilsina, et al, 2005). Technology already in place in the three oil sand deposits in the Albertan region is competent enough to employ efficient procedures in oil production.
Alberta holds second position in the world after Saudi Arabia in terms of endowment with assured crude oil deposits. In 2008, the region sold an average of 1.51m barrels of oil in crude form each day to the United States. This represented 15% of the U.S.’ imports of crude oil, used to meet 8% of the demand for oil in the country. In the period between 2008 and 2009, the authorities in Alberta collected about $3b in the form of royalties from energy projects targeting oil sand. The oil sands of Alberta thus hold huge potential in the provision of oil as a source of energy to Canada, its neighbours, and the world. This is both as a source of revenue in the form of taxes and royalties to the government, and as a source of employment to a huge number of people in the country (Roberts & Goodwin, 2010). Realization of this potential is however subject to the effective application of various strategies aimed at promoting the welfare of the society.
Production and Related Issues
Oil sands constitute a huge, but unconventional, source of oil energy. Oil sands, as mentioned above, are an unconventional source of oil, because of the technological limitations and unprofitably low prices that existed in the past. These conditions made exploitation of oil sand uneconomical. Technological developments and high increases in the price of oil have however made the exploitation of oil sand as a resource in the provision of energy possible. The process of extraction of oil from oil sands involves heavy use of technology, especially because the sand has to undergo upgrading to make it suitable for refinery for the production of various oil products. Unlike conventional oil that requires direct drilling to allow the flow of crude oil into a reservoir, oil sand exploration requires the application of strip mining techniques. There is need for the reduction of the level of viscosity the oil sand, through raising the temperature of the environment or applying suitable solvents. Raising the temperature of the oil sand environment involves injection of hot air or steam. This process of upgrading requires the application of huge amounts of water and energy, up to four times higher than that applicable for conventional oil (OAO, 2006). This is necessary for the process of production to feature appropriate levels of efficiency.
The process of upgrading consists of three main stages: the first stage involves t...