OIL SANDS & NORTH AMERICAN ENERGY SECURITYFebruary 21, 2012Florida International University
Janet Annesley, Vice President
Canada is a Global Energy Player
#3Canada is third in the world in natural gas production.
#1Canada has the world’s largest uranium reserves.
#2Canada is second in the world in hydro-electricity generation.
#3Canada is 3rd to Saudi Arabia & Venezuela in crude oil reserves
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
performanceCurrent Policies Scenario 4
Global Crude Oil Reserves by Country
Source: Oil & Gas Journal Dec. 2010
25 20 1930
374660
92102
115
137
175
211
260
0
50
100
150
200
250
300
Saud
i Arabia
Vene
zuela
Cana
da Iran
Iraq
Kuwait
Abu Dha
bi
Russia
Libya
Nige
ria
Kazh
akhs
tan
Qatar
China
Unite
d States
billi
on b
arre
ls
Includes 1
70 billion barre
ls
of oil s
ands rese
rves
Restricted(79%)
Open to
Private Sector
Canada’s
Oil Sands56%
Other 44%
World Oil Reserves Open to Private Sector
5
Top 10 World Crude Oil Producers in 2010
0 2 4 6 8 10 12
Kuwait
UAE
Nigeria
Mexico
Canada 2010
China
Iran
USA
Saudi Arabia
Russia
Million Barrels per Day
Sources: U.S. Dept. of Energy, Energy Information Administration & CAPP
2025
Oil Sands Projects in Three Deposits
In Situ ProjectsMining ProjectsIn Situ ProjectsMining 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
Peace River
Peace River
Seal
Peace River
Peace River
Seal
Northern
Lights
White Sands
Two Methods of Oil Sands RecoveryP
hoto
: Con
ocoP
hilli
ps -
Sur
mon
t
Schematic: Devon - Jackfish
Drilling: 80% of reserves Mining: 20% of reserves
8
Canadian Oil Sands and Conventional 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
thou
sand
bpd
Actual Forecast
In Situ
Mining
Conventional Heavy
Conventional LightPentanes/Condensate
9
Potential Tanker Markets for Canadian Oil Sands Production
Prince Rupert/Kitimat
Los Angeles
Jose/La Cruz
3,840
ChinaPersian
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
1,400 N
Miles
Far East U.S West Coast
• •••
Japan
Taiwan
Korea
•
•
SantaCruz
• •
1,790
Competitive travel distances for Canadian supply to both markets
Source: Enbridge Pipelines12
Global Energy Related Emissions
GHG emissions from oil sands: just over 1/1000th of global GHG emissions 6.5% of Canada’s GHG emissions 29% reduction in intensity from 1990
Global Emissions Canada’s 2%
14
United States18%
China24%
OECD Europe17%
Non-OECD Europe & Eurasia
9%
Japan4%
India5%
Other19%
Canada
Australia/ New Zealand2%
Manufacturing, Commercial & Construction
11.5%
Residential5.9%
Transport27.5%
Industrial Processes & Waste9.9%
Agriculture & Forestry8.4%
Oil Sands6.5%
Other Fossil Fuel16.1%
Electricity & Heat Generation
14.2%
Sources:1. U.S. Dept. of Energy/EIA2. Environment Canada
Sources:1. U.S. Dept. of Energy/EIA2. Environment Canada
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 andRefiningGHG Emissions fromGasoline Consumption
Source: Jacobs Consultancy, Life Cycle Assessment Comparison for North America and Imported Crudes, June 2009
98 102102 106102 114 107104105
15
North American GHG Emissions (2009): Coal-Fired Power and Oil Sands
15 megatonnes50 megatonnes
100 megatonnes
FL
GA
TX
NC
MI
AL
MO KY
IN OH
NE
NM
ND
CO
SC
KS
IA
TN
WV
WY
VA
MN
UT
OK
WI
AZ
AR
AK
LA
IL
NV
OR
MT
SD
NJ
NY
NH
MS
Legend
U.S. Coal fired power generating plants
Canadian coal-fired power generating plants
Canadian oil sands
Sources: U.S. DOE/EIA & Environment Canada
Reducing Greenhouse Gas 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 c
o2
eq
./m
j
1990 2008
Water Use and Quality
Mining 2-4 bbl of water per bbl of oil 80-90% recycle Currently use 0.5 per cent of
the annual flow of the Athabasca river
To protect during low flow periods withdrawals are restricted
• Drillable (Insitu) 0.25-0.5 bbls of water per bbl
of oil 90-95% recycle No water from Athabasca
River Shift to using saline water
from sub-surface aquifers• Newer projects are using
100% saline water for steam
• Enhanced monitoring systems Science based, transparent,
credible Recent federal and provincial
government reviews to enhance monitoring
19
Environmental & Social Performance
• Focus on both crude oil / oil sands & natural gas
• Reputation = Performance + Communication Continuous performance improvement More effective messaging (breadth, channels, transparency) Improved industry collaboration
• Key concerns expressed regarding oil & gas development: Local / regional environmental & social impacts (air, land,
water, biodiversity) Global climate change Role of fossil fuels in future energy system
Royal Society of Canada ReportEnvironmental & Health Impacts of Canada’s Oil Sands Industry
• Science-based, independent analysis of the environmental aspects of Canada’s oil sands
• Addresses many of the issues and perceptions of oil sands development: Reclamation is not keeping pace, but
sustainable reclamation is achievable Water use does not threaten viability of
the Athabasca River No impact on Athabasca water
quality/ecosystem and no evidence of impact on human health in downstream communities
Tailings technologies are emerging, but tailings inventory is growing
GHG emissions per barrel are reducing but growing production creates a challenge in meeting international commitments
Minimal impacts on regional air qualityDecember 2010
Responsible Canadian Energy
• Oil Sands Report Principles &
Performance Measurement &
Reporting Transparency
Oil Sands Advertising -Communicating with the Public
To demonstrate that industry takes these issues seriously and what is being done by “real people” to address them.
Summary
• “3Es” Environmental performance Energy security & reliability Economic growth
• Competitiveness & social license are “must haves”
• Reputation = Performance + Communication Technology is key
performance lever
• We need to work together & we all need to step up!
A great opportunity for Canada and the U.S.……needs innovative, creative, committed, determined people to make it happen!