Alberta’s Oil Sands…….

A Canadian Success Story

Jim Carter

Western Canadian Arbitrators Round Table

Energy Forum

Calgary, Alberta

May 15, 2012

Global Energy Demand Continues To Grow

Source: http://www.eia.doe.gov/oiaf/ieo/highlights.html

2

260

211

175

137

115

101.5

92

60

46

Saudi Arabia

Venezuela

Alberta/Canada

Iran

Iraq

Kuwait

Abu Dhabi

Russia

Libya

World Oil Reserves

(billions of barrels - established)

Alberta (171)

46

37

30

25

20

19

13

10

Libya

Nigeria

Kazakhstan

Qatar

China

USA

Brazil

Mexico

Source: Oil & Gas Journal, January 2011

Only 21% of the world’s proven oil reserves are accessible to

private sector investment (not state controlled); 53% of the

world’s open and accessible reserves are in Alberta’s oil

sands.

3

Sources of U.S. Oil Imports (2010)

Total U.S. Demand: 19.15 million bbl/d

Total Imports: 9.16 million bbl/d

ALBERTA

Sources: US Energy Information Administration

National Energy Board (Canada)

Note: Total does not add up to 100% due to rounding

4

Oil Sands Development and

Canada’s Economy: 2010-2035

• The development of Alberta’s oil sands will deliver economic benefits throughout Canada:

� $91.3-$132.7 billion per year

in GDP gains (2010-2035

average)

The range of these

results depends on the

ability to secure pipeline

access to new markets

for growing oil sands

production

average)

� 482-707 thousand jobs per

year (2010-2035 average)

� $27.9-$37.9 billion per year

in worker wages (2010-2035

average)

SOURCE: Economic Impacts of Staged Development of Oil Sands Projects in Alberta (2010-2035), Canadian Energy Research

Institute (CERI), June 2011

Canada’s Offshore Oil & Gas

Atlantic Canada - Newfoundland

and Labrador

• Producing oil projects – Hibernia

(1997), Terra Nova (2002) and

White Rose (2005), North

Amethyst (2010)

• Hebron Project in 2017Hebron Project in 2017

• Produce 270,000 bpd = 35% of

Canada’s conventional light crude

production and 10% of all

Canadian crude oil

Nova Scotia

• 1 producing natural gas field –

Sable (1999)

• Deep Panuke in 2012

Source for Graphics: Canadian Centre for Energy Information Publication, 20046

What are the Oil Sands?

• Naturally occurring mixture of sand, clay, water and bitumen –a very heavy oil

• Bitumen is separated from the sand and upgraded to refinery-ready crude oil

7

Mineable oil sands only exists under 0.1

per cent of Canada’s total boreal forest

3,200,000 km2 – Boreal Forest

715 km² disturbed to date

72 km² reclaimed to date8

Source: Alberta Government Presentation, July 2011

Oil sands production technologies have significantly evolved…

Mining – 20% of the oil sands resource is less than 200 feet deep

Source: Canadian Centre for Energy InformationSource: Canadian Centre for Energy Information

In-Situ – 80% of the oil sands resource is more than 200 feet deepCyclic Steam ProcessSteam Assisted Gravity Drainage

(SAGD)In-situ operations:• Do not have mines• Or tailings ponds• And they do not take water from the river

9

Air/GHG emission Limits

Water intake & discharge limits

Regional Air Quality Monitoring

All aspects of Environmental Impacts are Regulated/Monitored

Mandatory/ Required reclamation

Regional Water Quality Monitoring

limits

10

98 102 102 102 106 102 104

Wells-To-Wheels Carbon Emissions

Source: Jacobs Consultancy, Life Cycle Assessment Comparison for North America and Imported Crudes, June 200911

Oil Sands and GHGs in Canada

The oil sands in a carbon

constrained world…

• Oil sands = 6.5% of Canada’s 2009 GHG emissions

Other

3%Oil Sands

(Production and

Upgrading)

Agriculture

8%

Buildings

11%

0% 0%0%

Canada GHG Emissions

• Oil sands producers reduced average per barrel GHG emissions by 29% between 1990 and 2009

Upgrading)

6.5%

Other Oil and

Gas Production

and Refining

17%

Transportation

25%

Electric

Generation

17%

Industrial

14%

12Source: Alberta Government Presentation, July 2011

Increasing Energy Efficiency in Extraction Processes…

…are now the norm.

13

New Technologies will Decrease Carbon Footprint…

THAITM Solvent Recovery

Electro Thermal

Dynamic Stripping

Geothermal

14

CCEMC - Mandate

CCEMC is enabled through the Government of Alberta’s

regulatory approach

CCEMC is an Alberta based not-for-profit corporation with a

mandate to reduce greenhouse gas emissions and improve

the ability to adapt to climate change by investing in the

discovery, development and deployment of clean technology

• Large regulated emitters must meet performance targets

• Three options to comply – achieve target, offset or pay

• Compliance is annual

• The Fund is managed by the government

• Funds are segregated

• CCEMC – a delegated administrative organization

regulatory approach

15

In business for 2+ years – funding is refreshed annually

• Announced funding for 32 clean technology initiatives in 15

months

• More than $167M allocated

• More than $823M in project value (leverage 4:1)

• Emissions reduction estimated at 1.7MT/yr or 17 MT/10 yr

CCEMC Performance

• Emissions reduction estimated at 1.7MT/yr or 17 MT/10 yr

• Expect >$1B worth of projects by end of this year

• SME RFP currently under review – May

• New RFPs to be announced this spring

o Energy efficiency

o Renewable energy

16

Portfolio by Strategic Area

• Alberta is investing more in Carbon Capture and Storage, on a

per capita basis than any other jurisdiction in the world

• CCS expected to achieve 139MT (70% of 2050 reduction

targets)

• $1.6B invested in Three Projects

Alberta – CCS Investments

• $1.6B invested in Three Projects

o Quest Project (Shell, Chevron, Marathon)

o Alberta Carbon Trunk Line (Enhance/NorthWest Upgrading)

o Swan Hills SynFuels - Insitu Coal Gasification

• 4MT target starting in 2015

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Thank you

19

EXTRA SLIDES

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Oil Sands Mining Projects – Summary

Project Status Production Capacity (bbl/day)

Projects in Operation 1,210,000

Projects Under Construction 290,000

Projects with Regulatory Approval 1040,000

21

Projects with Regulatory Approval 1040,000

Projects Under Regulatory Review 420,000

Projects Announced/Disclosed 530,000

Total Production Capacity 3,490,000

*Project information valid as of June 2011. Public sources used.

Oil Sands In-situ Projects – Summary

Project Status Production Capacity (bbl/day)

Projects in Operation 875,000

Projects Under Construction 495,500

Projects With Regulatory Approval 905,955

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Projects With Regulatory Approval 905,955

Projects Under Regulatory Review 689,500

Projects Announced/Disclosed 2,463,000

Total Production Capacity 5,488,955

*Project information valid as of June 2011. Public sources used.

…In-Situ Projects are “doable” in smaller sizes than mining projects – smaller

players creating diversity