Canada’s Oil Sands
Canadian Association of Petroleum Producers
Valve Manufacturers Association Orlando, Florida
October 14th, 2011
Martyn Griggs – Manager Oil Sands, CAPP
Presentation Outline
• Global & U.S. Energy Future • Canada Oil Sands – Partner For
American’s Future • Oil Sands Overview
Markets and Pipelines Environmental Performance Technology Solutions Social License
• Summary • Q&A
The Global Energy Context
• Significant energy demand growth: Population, standards of living
• Need all forms of energy: Increasing role for renewables Continuing reliance on
hydrocarbons Increasing role for non-
conventional crude oil & natural gas
• Technology is a key lever for sustainable growth Production Cost competitiveness Environmental performance
Current Policies Scenario
Global Primary Energy Demand
The US Energy Context
• Need for all forms of energy: Increasing role for renewables Continuing reliance on
hydrocarbons Increasing role for non-
conventional crude oil & natural gas
Source: U.S. Dept of Energy, Energy Information Administration Annual Energy Outlook December 2010
Canada is a Global Energy Player
#3 Canada is third in the
world in natural gas production.
#2 Canada is second in
the world in hydro-electricity generation.
#3 Canada is 3rd to Saudi
Arabia & Venezuela in crude oil reserves
#6 Canada is sixth largest
oil producer in the world.
Canada’s Share of U.S. Imports – Crude Oil & Petroleum Products
0%
10%
20%
30%
40%
50%
60%
70%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
% Saudi Arabia% Mexico% Venezuela% Canada
Source: EIA 2010
Canada’s Energy: Partners for America’s Future
Jobs and Economic Growth Creating jobs across North America Robust economic relationships
already established cross-border
Energy Security Currently the largest supplier of
crude oil to the U.S. and growing Largest supplier of natural gas to
the U.S.
Environmental Sustainability GHG emissions, land and water Technological advancements Strong Government regulation
Canada’s Oil Sands: Partners for American Economy
• Our refinery is set up to process heavy crude, and 95 per cent of its feedstock is Canadian heavy crude, which includes oil sands oil. We probably couldn’t survive without it.
Dexter Busby, Director Government and Regulatory Affairs Montana Refining Company, Inc.
• “The oil sands are a national treasure for Canada and the
U.S. The resource is secure and comes from a friendly neighbor. In addition, much of the U.S. dollars spent on Canadian oil come back to America in trade.”
U.S. Senator Lindsey Graham
Preferred Use of Canadian Oil in Future
56% 25% 9% 3% 2%
0% 20% 40% 60% 80% 100%
National
A lot more A little more About the same A little less A lot less
If it were up to you, and America continued to need to import some oil, would you like to see America import a lot more of its imported oil from Canada, a little more, about the same amount as it does today, a little less, or a lot less?
Harris Interactive – April 2011 9
US Jobs and Economic Impacts from Canadian Oil Sands
• 465,000 new US jobs Increased demand for U.S. goods and services will result in the
creation of an incremental 465,000 jobs from 2011 – 2035.
• Output up by $45 billion/year On average, U.S. output of goods and services will increase by
$45 billion/year from 2011 - 2035 due to increased demand from oil sands activity
• US GDP growth from oil sands Demand for US goods and services will generate an incremental
$5.8 billion in 2015 to US GDP, $12.9 billion in 2020, $26.6 billion in 2025 and $42.6 billion in 2035.
Source: Canadian Energy Research Institute 2011
0.8
Alaska
1.2
Hawaii
21 - 40 Over 80
10 - 20 Under 10
Incremental US Jobs from Canadian Oil Sands by State 2011-2035
33.7
0.9 16 0.7
1.1
3.9
0.5 0.6
1.5 1.2
1.0
1.1
2.3
2.3
1.6
1.4
1.1
2.6 2.4
8.9
2.0
6.5
4.8
4.9
3.5
3.3
2.3
3.3
6.5
5.0
5.5
0.8
7.1
8.8
3.2
4.7 37.9
7.7
9.9
19
18.8
85.1
36.6
7.5
26.4
Thousand Person-Years
Source: Canadian Energy Research Institute – May 2011
18
14.5
13.3
10.6
Canada’s Oil Sands: Partners in the American Economy
Global Crude Oil Reserves by Country
Source: Oil & Gas Journal Dec. 2010
25 20 19303746
60
92102
115
137
175
211
260
0
50
100
150
200
250
300
Saud
i Ara
bia
Vene
zuela
Cana
da Iran
Iraq
Kuwait
Abu D
habi
Russ
iaLib
ya
Nigeria
Kazh
akhs
tanQata
rCh
ina
United
Stat
es
billi
on b
arre
ls
Restricted (79%)
Open to Private Sector
Oil Sands 56%
Other 44%
World Oil Reserves Open to
Private Sector
Two Methods of Oil Sands Recovery Ph
oto:
Con
ocoP
hillip
s - S
urm
ont
Schematic: Devon - Jackfish
Drilling: 80% of reserves Mining: 20% of reserves
14 14
Oil Sands Projects in Three Deposits
Peace River
Athabasca
Cold Lake
Edmonton
Calgary
Ft. McMurray
In Situ Projects Mining Projects
Fort McMurray
Cold Lake
Fort Hills
Horizon
Joslyn Creek
Syncrude
Suncor
Muskeg River Albian
Dover
MacKay River
Firebag
Hangingstone
Long Lake
Surmont
Christina Lake (ECA)
Foster Creek
Wolf Lake/Primrose
Hilda Lake Cold Lake
Tucker Lake
Jackfish
Kearl Lake
Jackpine
• Oil sands production now exceeds 1.5 million barrels per day
• $123 billion
built from 1997-2010
Peace River
Peace River
Seal
Northern Lights
White Sands
Industry Capital Spending Cdn $billions
Northern Canada
2009 2010 2011F
$0.2 $0.3 $0.3
Oil Sands
2009 2010 2011F
$11 $17 $19
Western Canada
2009 2010 2011F $20 $32 $32
East Coast Offshore
2009 2010 2011F
$1.7 $1.4 $1.5
Note: Excludes spending mergers & acquisitions
Oil & Gas Investment Spending: 2009: $34 billion 2010: $51 billion 2011: $53 billion (forecast)
Canadian Oil Sands and Conventional Oil Production Forecast (2011-2025)
Atlantic Canada
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
thousa
nd b
pd
Actual Forecast
In Situ
Mining
Conventional Heavy
Conventional Light Pentanes/Condensate
Access to Current and New Oil Markets
Canadian & U.S. Crude Oil Pipeline Proposals
Demand for W. Canadian Crude Oil – 2010 versus 2015 (kbpd)
Access to the West Coast (offshore markets)
Existing • Transmountain shipments
over the dock Jan – July 2011 = 45,000 b/d Peak April 2010 = 143,000 b/d
Future • Transmountain
TMX2 – 80,000 b/d TMX3 – 320,000 b/d Northern Leg – 400,000 b/d
• Enbridge Gateway – 525,000 b/d NEB application filed
Potential Tanker Markets for Canadian Oil Sands Production
Prince Rupert/Kitimat
Los Angeles
Jose/ La Cruz
China Persian
Gulf
Japan
Taiwan
~ 8,600 N Miles
~ 4,500 N Miles
Prince Rupert/Kitimat
Jose/ La Cruz
Los Angeles
Japan
Taiwan
Target Markets
~ 5,400 N Miles
Far East U.S West Coast
• • • •
Japan
Taiwan
Korea
•
•
SantaCruz • •
Competitive travel distances for Canadian supply to both markets
Source: Enbridge Pipelines 21
Full Cycle GHG Emissions
0
20
40
60
80
100
120
SaudiArabia
Mexico Iraq Venezuela Nigeria US GulfCoast
CaliforniaThermal
Oil SandsWtd. Avg
g CO
2e/M
J ga
solin
e
GHG Emissions fromProduction and RefiningGHG Emissions fromGasoline Consumption
Source: Jacobs Consultancy, Life Cycle Assessment Comparison for North America and Imported Crudes, June 2009
98 102 102 106 102 114 107 104 105
Global Energy Related Emissions
GHG emissions from oil sands: just over 1/1000th of global GHG emissions 6.5% of Canada’s GHG emissions
Global Emissions Canada’s 2%
23
United States
China
OECD Europe
Non-OECD Europe & Eurasia
Japan
India
Other
Canada
Australia/New Zealand
Manufacturing, Commercial & Construction
Residential
Transport
Industrial Processes & Waste
Agriculture & Forestry
Oil Sands
Other Fossil Fuel
Electricity & Heat Generation
Reducing GHG Emissions in Oil Sands
• Energy Efficiency Using less energy input Reducing energy waste/losses Capturing waste heat Cogeneration power/steam
• Improved recovery processes Lower temperature extraction Additives to reduce use of both water
and energy (steam) Use of electricity rather than steam Underground combustion rather than
steam
• Carbon capture & sequestration
Most effective at upgraders
0
5
10
15
20
25
Oil Sands GHG Emissions/bbl
29%
g co
2 eq
./mj
1990 2009
Land Use and Reclamation
Oil Sands Tailings – Mining
• Accelerating reclamation • Minimizing future tailings
• Industry Tailings Collaborative Accelerate new technology
implementation
September 2010
Suncor Pond 1
Research on dry and consolidated tailings
Technology Solutions – Less Energy, Greater Recovery and Less Water
• Low energy extraction 35ºC instead of 80ºC = 1/3 less energy
• Underground combustion Petrobank Whitesands – THAI process
• Additives to reduce the need for both water and energy (steam) LASER (Imperial), SAP (Cenovus), N-Solv SC-SAGD (Laricina), SOLVE (Statoil/PTRC)
• Electricity instead of steam to warm the
heavy oil underground ET-Energy, Shell
Syncrude Low Energy Extraction – Aurora Mine
Petrobank THAI process
Solvent/steam processes (Laricina diagram) 27
Reputation / Social License & Oil Sands
Oil Sands Reputation / Social License = Performance + Communications
• “3E” policy framework
• Robust regional planning:
System-wide metrics
Effective monitoring
Transparent data
3rd party validation
• World class regulation
• Technology & innovation
• Collaboration
• Proactive
• Transparent
• Verifiable
• Visible leadership
• Broad portfolio:
mainstream
social media
directly & via 3rd parties
Canada, U.S., Europe, Asia
Summary
• “3Es” Environmental performance Energy security & reliability Economic growth
• Competitiveness & social license are “must haves”
• Reputation = Performance + Communication Technology is key performance
lever We all have a role in
communication / outreach
• We need to work together & we all need to step up!
A great opportunity for Canada and the US…needs innovative, creative, committed, determined people to make it happen!