It is clear that unconventional hydrocarbon resources will play an increasingly important role in meeting regional and in some cases global energy demand. The Canadian oil sands, with oil in place estimates of 1.7 trillion barrels, are projected to produce about 170 billion barrels of bitumen with current technology making it the second only to Saudi Arabia in both categories. The oil sands were initially exploited using a variety of surface mining and extraction techniques to separate the bitumen from the sand and clay matrices. Surface mining operations, by their nature, disturb large tracts of land that must be reclaimed before the mine is abandoned. In addition, the extraction process requires freshwater and the effluent is stored in tailings ponds sized for sufficient retention time. Water recycled from the tailings ponds provides about half of the water requirements. If mining are the legacy assets in the oil sands region, in situ extraction is the future of the industry as 80% of the resource is too deep to be mined. Steam Assisted Gravity Drainage or SAGD is the first commercial technology to extract bitumen by injecting steam via a horizontal into the reservoir, which heats and mobilizes the oil so that it flows by gravity to a second well and pumped to the surface for processing. Most operators use a treated saline (non-potable) with high recycle rates, so the process uses less water. SAGD has a smaller surface footprint and as the sand and clay particles remain in the reservoir there is no need for tailings ponds. The scale of development is impressive both in terms of capital deployed and production growth but the development of the oilsands is associated with a range of environment and social issues that has attracted the attention of activists and the media. The industry and our regulators within the government of Alberta work hard to identify and mitigate both site specific and cumulative impacts; sophisticated air and aquatic monitoring programs are in place. The operators, both individually and collectively, are working on new technologies and process to improve the rate of reclamation, reduce the amount of water, energy and associated emissions, required to produce a barrel of bitumen. The industry understands that there is an expectation that it has to continually improve and that we need to do a better job of communicating with a broad range of stakeholders on our performance.

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