Oil sands, a bituminous mixture, are a potential source of hydrocarbon base products such as heavy crude oil and heavy bituminous base oil. Oil sands are a mixture of bitumen, water and other solids such as silica sands. The sand is mined to extract bitumen first before they are upgraded to synthetic crude and heavy bitumen.

Oil Sands are Different from Other Unconventional Energy Sources

The International Energy Agency defines conventional oil in its 2011 World Energy Outlook as “a mixture of hydrocarbons that exist in liquid phase under normal surface conditions.” Unconventional oils are demarcated as oils that are obtained by unconventional production techniques because they cannot be recovered through pumping in their natural state from an ordinary production well without being heated or diluted.

The U.S. Department of Energy divides unconventional oil into four types, i.e., heavy oil, extra heavy oil, bitumen and oil shale. Some analysts also include gas-to-liquids (GTL) processes for converting natural gas to oil and coal-to-liquids (CTL) processes for converting coal to oil in the unconventional oil category. (For related reading about unconventional sources, see Coal Seam Gas: An Unconventional Alternative?) These unconventional oil-processing techniques broaden the feedstock of unconventional oils to include unconventional natural gas, such as tight gas, shale gas, coal bed methane and methane hydrates. (Learn more about shale gas in the article Is Shale Gas Losing Its Sheen?) Oil sands, although coming under the unconventional basket, are classified under a separate category of bitumen.

Where Oil Sands Stand in the Hydrocarbon Value Hierarchy

Statoil has come out with an informative hydrocarbon hierarchy that shows how petroleum products are stacked in terms of their monetary value. Oil sands fall under the second leg of the heavy/extra heavy crude oil category.

Some of the newly found unconventional oil sources such as oil sands are solid in nature and require a seamless heating procedure to make them less viscous. Unlike conventional crude oils, these heavy residue oils require complex technological processes to extract marketable petroleum products that still fetch lower values compared to conventional ones.

Challenges lie in finding the resources, extracting them and making them more value added. Addressing the cost benefit and return on investment is a key question relating to oil sands from a financial perspective.

Specific to oil sands, they are a mixture of quartz sand, clay, water, trace minerals and a small (10–18 percent) share of bitumen with their sulfur content in excess of 7 percent. Bitumen is made up of organic components ranging from methane — the simplest organic molecule — to large polymeric molecules.

This mixture is extremely complex and filled with bitumen, and requires extensive synthetic processing to extract synthetic crude oil. The synthetic crude oil is highly viscous in nature and hence diluting agents are used to make them flow through pipelines. Diluting agents such as gas-processing condensates including the diluents (pentanes) are added to the product to meet pipeline density and viscosity limitations.

Worldwide Presence of Oil Sands

The province of Alberta, Canada has the globe’s largest deposits of bitumen. Alberta’s major bitumen production obtained from oil sands is currently upgraded to synthetic crude oil and other products before shipment to refineries.

Besides Canada, 21 other countries have bitumen resources, including Kazakhstan (in the North Caspian Basin), Russia (in the Timan-Pechora and Volga-Ural basins), Venezuela, and Africa including the Republic of Congo, Madagascar and Nigeria. In the United States, oil sands are deposited in at least a dozen states, including (in relative order) Alaska, Utah, Alabama, California, Texas, Wyoming, Colorado and Oklahoma. However, the United States and other nations’ oil sand reserves are currently considered to be far smaller in volume than Canada’s reserves and may also be less easily recoverable due to different physical and chemical compositions. Extra-heavy oil (non-bitumen) is recorded in 166 deposits worldwide, the largest in eastern Venezuela’s Orinoco Oil Belt. The deposits are found in 22 countries, with thirteen of the deposits located offshore.

Techniques Used to Extract Oil Sands

There are two primary methods followed in the extraction of oil sands: surface mining and drilling methods (also called in situ method).

While both of these methods are widely used, the type of surface where oil sands are available determines the method of extraction.

Where the oil sands are present relatively closer to the surface of the earth, surface mining is used. Under this method, the entry area is smoothed by removing uneven structures, trees, etc. The oil sand is then mined through with large trucks and shovels. It is interesting to note that only about 20% of the oil sands are extractable using the surface mining technique in Canada.

In other parts of the world, oil sands reside deep inside the earth, and hence the drilling or in situ method is deployed to dig out oil sands. Under this method, steam is injected into the earth so that the bitumen in oil sands melts to become a liquid. The bitumen is then pumped out of the earth. It is similar to the conventional drilling technique used in the extraction of crude oil.

Both techniques raise concerns on the potential damage caused to the environment at large. During surface mining, tremendous heat is pumped onto the surface to shovel out the bituminous mixture from the earth. This causes an environmental imbalance to the Earth according to environmentalists.

Carbon Footprint and Oil Sands

Carbon emissions haunt the future viability of oil sands. Complex methods are used to extract and process these heavier oils before they can be refined into petroleum products. Energy-intensive additives are introduced to the processes, which are detrimental to the environment. In addition, other factors such as product quality, yield pattern, etc., are impacted by the use of these additives. By nature, these mixtures are extra heavy residues and compounded by complex processing, hence they are high carbon risk components.

What the Future Holds for Oil Sands

Despite these shortcomings and the complexities involved in obtaining value added products, oil sands are a source to be reckoned with in the future. With global demand increasing and conventional resources disappearing, new alternatives need to be explored without causing damage to the environment. With technological advancements, oil sands will hold its place in the energy resources space in the decades ahead.