Oil is on the way from Canada
Canada calls you big time
Economy
OVERVIEW & HIGHLIGHTS
Everything is big here. The specialized trucks used by the oil sands industry are among the largest in the world; the size of the mine sites defies all imagination. The engineered structures for oil sands development, which are constantly travelling up Highway 63, fill the width of the highway.
And then there is the spirit of the people involved with creating, engineering, constructing, managing and operating a seemingly complex, intricate process of dreams and ideas. There’s nothing small about how they dream.
There are big opportunities here, too—almost unmatched in any other economic market in Canada. Of a total $86 billion worth of oil sands projects announced between 1997 and 2011, $54 billion in oil sands projects are expected to be completed by 2011. (This estimate includes the $17 billion worth of projects that have already been completed since 1997, $7 billion projects presently under construction and $30 billion of projects that are forecast to be completed by 2011.) Within the years up to 2011 in which the above oil and gas capital expenditures are expected to flow throughout this region, the many projects will result in 17,000 new jobs.
By 2011, Alberta’s oil sands are expected to generate nearly two million barrels of crude oil per day—representing more than half (57%) of Canada’s projected total crude oil production.
Combined, this will represent 60,000 jobs by 2020. And for every one job created at the plants, three are created in the region, so the bustle isn’t exclusive to the oil sands. Construction projections alone predict an average of $4 billion worth of projects in this region every year up to 2009.
Overall, 62 projects are being considered for review, are being reviewed, or have been approved by the Alberta Energy and Utilities Board. Almost half of those projects are for co-generation plants that will eventually provide electricity to the plants. In addition, new pipelines are being built to move bitumen to upgrader facilities both locally and in Fort Saskatchewan, as well as moving natural gas to energy markets throughout North America.
Combined projects predict four million barrels per day (bpd) of oil will be produced right here, which is more than the 2.1 million barrels per day which Canadians currently use.
Syncrude and Suncor are already supplying more than 25% of Canada’s energy demand. The Athabasca, Cold Lake and Peace River Oil Sand Deposits hold more oil than Saudi Arabia, with 300 billion barrels of recoverable bitumen. In effect, our oil sands hold the position of being North America’s number one supplier, with enough resources to provide 50% of Canada’s energy needs by 2010.
With exploration arrives new technology and alternate methods of extracting bitumen. In-situ SAGD (Steam Assisted Gravity Drainage) technology is providing companies with a way of producing bitumen without using the truck and shovel method of open-pit mining. This allows the extra thick overburden to remain in place.
SAGD involves drilling two horizontal wells, one to inject steam and a second to collect the bitumen released by the heat. This technology allows recovery of bitumen with less environmental impact than traditional mining methods, disturbing less than 20% of the surface land areas over the deposit being developed.
All this activity has opened up once-isolated hamlets, which have now become hubs for new oil and gas projects. As a result, there is a shadow population of roughly 8,000 camp workers who ride the recurrent wave of construction deriving from the oil and gas projects.
Mining bitumen in Wood Buffalo is all about partnerships and ongoing commitment towards joining in third-party ventures with either the Athabasca First Nations, the Fort McKay First Nations, Chipewyan Prairie First Nations, Mikisew Cree or the Fort McMurray First Nations.
This vast region of northeast Alberta is a land of rich resources. In addition to the oil sands, there is also increasing forestry activity, evidenced by logging trucks heading down the highway. All of this industry is supported by a vibrant and prosperous small business economy that ably serves the people of Wood Buffalo, almost half of whom aren’t directly employed with the oil and gas industry.
PRODUCING COMPANIES
Albian Sands
The newest producing oil sands project is at Muskeg River Mine, approximately 85 kms north of Fort McMurray. The mine is operated by Albian Sands Energy Inc., but owned by Shell (60%), and Chevron Canada and Western Oil Sands (each with 20% ownership).
The mine will produce 155,000 bpd of bitumen, which after upgrading, will provide refiners with transport fuel feedstock.
The $5.7 billion Athabasca Oil Sands Project joint venture has two primary components, one of which includes the Muskeg River Mine. The new joint venture of Albian Sands is responsible for the employment, construction and operation of this project. The second component is the Scotford Upgrader situated further south in Fort Saskatchewan.
Albian Sands recently started recovering the more than 1.65 billion barrels of recoverable bitumen, which holds a thick, high-quality ore zone close to the surface, making it ideally suited to mining. About 500 Albian Sands employees will be mining and extracting a projected 155,000 bpd of bitumen for the next 30 years.
Expansion plans for the Muskeg River Mine are in a preliminary stage and are tentatively slated to begin 2005 to 2010. Further oil sands development includes Phase I of Jackpine Mine, which when fully producing will add another 200,000 bpd of bitumen.
The expansion is scheduled to begin in 2010. Phase II of Jackpine Mine is also in a preliminary planning stage, with a startup in 2010 to 2015. This will inject an additional 100,000 bpd into Albian’s oil sands market base.
Suncor
Suncor is one of the world leaders in mining and upgrading crude oil, with probable reserves of 302 million bpd. Since 1967, Suncor has produced over 700 million barrels of oil and has enough reserves to sustain production for the next 50 years.
Suncor’s Project Millennium is a $3 billion expansion of its oil sands business that has increased production capacity to 225,000 bpd. Construction of Stage One of Suncor’s Firebag In-Situ Oil Sands Project is underway and is expected to supply Suncor’s upgrader with 35,000 barrels of bitumen per day, supporting Suncor’s plan to increase production to 260,000 barrels of oil per day in 2005. Future phases at Firebag are expected to increase production to 140,000 barrels of bitumen per day before the end of the decade.
Suncor’s newest venture, Voyageur, is an expansion that is expected to increase oil sands production to the range of 500,000 to 550,000 barrels of oil per day in 2010 to 2012. This 10-year development is expected to stimulate economic growth and provide long-term economic and social benefits in The Regional Municipality of Wood Buffalo, as well as the rest of Alberta and Canada. Suncor’s projected capital spending for oil sands growth will be around $1 billion a year for the next 10 years.
Responsible development is an integral part of the company’s growth strategy. Suncor recognizes the need to reduce environ-mental impacts associated with ongoing development and use of hydrocarbon energy. Suncor also works closely with regional stakeholders, including Aboriginal and environmental groups and all levels of government, to address concerns related to its oil sands operations.
Syncrude
Syncrude is Canada’s largest single source of crude oil and the world’s largest producer of oil from oil sands. In 2001, the company produced 81.4 million barrels of sweet crude oil—the equivalent of 223,000 bpd—and supplied Canada with 13% of it petroleum needs.
Syncrude is currently in the middle of its multi-billion dollar Syncrude 21 expansion, which will significantly improve environmental and economic performance while increasing production to 350,000 bpd by 2005. The more than $5 billion Stage Three is one of the world’s largest construction projects, and includes both an Upgrader expansion and the addition of a second production train at the Aurora Mine.
Throughout the Syncrude 21 expansion, the company remains committed to improving energy efficiency and reducing impact on the environment. In fact, during Stage Three more than $1 billion will be invested in technologies to save energy and reduce emissions. Many of those initiatives are the direct result of breakthroughs in oil sands technologies. Each year Syncrude invests more than $30 million on research and development, making it one of Canada’s top 50 R & D spenders.
In addition, Syncrude spends in excess of $1 billion annually on goods, services and salaries. In 2001, more than $450 million was spent locally in the Wood Buffalo region.
Syncrude is one of the largest private sector employers in Alberta, with 4,000 employees and a further 1,500 contractors. As well, Syncrude is Canada’s largest industrial employer of Aboriginal people, with 10% of its immediate workforce and 13% of its total extended workforce comprised of Aboriginal people.
[Source: Alberta Economic Development ] |
