Oil Sands - EnerFAQs

Oil sands are a mixture of sand, clay, water, and bitumen. Bitumen is a viscous hydrocarbon, similar to heavy crude oil. Oil sands deposits that are less than 75 metres deep can be surface mined and the oil sands processed to extract the bitumen. However, about 80 per cent of oil sands deposits are buried too deep to mine and the bitumen can only be recovered by in situ (Latin for “in position”) techniques, such as drilling wells.

Alberta has the largest known oil sands deposits in the world. The following map of Alberta shows where active oil sands deposits are located. It also shows what portion is close enough to the surface to be mined. Within the 381 000 square kilometres of boreal forest, about 90 000 square kilometres contain active oil sands deposits. Of that, only 20 per cent of the deposits are close enough to the surface to be mined, and only a small portion of the area has been developed.

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Before companies can start a project, they must apply to us for approval. Even before that application is filed, however, companies must consult Albertans, indigenous peoples, and stakeholders (such as landowners and municipalities) to ensure that they have an opportunity to understand how the project might affect them. The consultation process is extensive, and companies must demonstrate that they have made every effort to address outstanding concerns. In situations where unresolved issues or conflicts exist, stakeholders may submit a statement of concern to us about the project application, and the statement of concern may lead to a hearing. See the answer to the next question for more information about this process.

Project applications are comprehensive. We require companies to conduct environmental impact assessments for all new oil sands mines, and any commercial in situ project or bitumen processing plant, producing more than 2000 cubic metres of crude bitumen or its derivatives per day (about 12 500 barrels per day).

We review the technical aspects of the application and ask questions—called supplemental information requests—to gather additional information that our experts need to assess the proposed project.

If someone believes that they will be directly or adversely affected by a proposed project, they have a right to be heard by the AER. We share project applications on our Public Notice of Application page for 30 days (unless otherwise specified), which helps anyone who is concerned about a project find and understand the development plans.

The AER encourages anyone with concerns to submit a statement of concern for us to consider during our review of the application. If the statement of concern is relevant, complete, and submitted on time, we will consider the concerns while we decide to approve or reject the company’s application.

The AER may decide to hold a hearing on an application. If we do hold a hearing, a panel of our hearing commissioners will conduct it. Learn more about the hearing process at www.aer.ca.

Participant funding may be available to cover relevant costs incurred by participants during a hearing.

A hearing results in a formal written decision. If we approve an oil sands project, our decision may set out additional conditions that must be met to address the unique impacts of the particular project.

We can cancel our approval if an operator does not follow legislative requirements, rules, and approval conditions throughout the construction and ongoing operation of a project.

More information on hearings and statements of concern is available on the website. You can also see EnerFAQs Having Your Say at an AER Hearing and Expressing Your Concerns – How to File a Statement of Concern About an Energy Resource Project.

Yes. Once a project is approved, it must meet strict regulations and approval conditions during construction and operation. Every year, we conduct hundreds of inspections of oil sands projects. When companies fail to meet our stringent regulatory requirements, we take action. In carrying out our enforcement activities, we can

• conduct more inspections,
• require detailed plans of action,
• issue enforcement orders,
• shut down operations,
• levy administrative penalties, and
• prosecute companies.

In addition, we keep Albertans informed about industry’s record of meeting our requirements. Our Compliance Dashboard gives anyone a better picture of how the AER responds to and investigates incidents, enforces the rules, and penalizes companies when the rules are not being followed. We also share AER compliance activities on our website.

See EnerFAQs Inspections and Enforcement of Energy Developments in Alberta for more information.

About 80 per cent of the bitumen deposits in Alberta are buried too deep to mine and can only be recovered by drilling wells. This is referred to as “in situ” recovery (Latin for “in position”).

Some bitumen flows sufficiently to be recovered without the need for heat or the injection of fluids. Most in situ bitumen recovery, however, uses steam to heat the bitumen in the reservoir, which allows it to flow to wellbores. This is referred to as “thermal in situ” recovery. Sometimes small amounts of solvent are injected along with the steam to further increase the flow of bitumen.

Two main thermal in situ recovery technologies are used: cyclic steam stimulation (CSS) and steam-assisted gravity drainage (SAGD).

CSS injects steam into a vertical or horizontal well with sufficient pressure to fracture the reservoir, allowing the steam to move rapidly out into the reservoir to deliver heat to the bitumen and allow it to flow more easily. The bitumen is then produced to surface using the same well.

SAGD injects steam into a horizontal well to deliver heat to the surrounding bitumen so that it can flow more easily. Gravity then causes the bitumen to flow down to a second horizontal well positioned below the steam injection well so that it can be produced to surface.

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Water is heated to create steam at the surface, and the steam is injected into a reservoir to heat bitumen and reduce its viscosity so that it can flow to a wellbore. Managing water use is an important consideration for in situ production that results in efficient and sustainable in situ oil sands development.

Directive 081: Water Disposal Limits and Reporting Requirements for Thermal In Situ Oil Sands Schemes consolidates various aspects of water management requirements for thermal in situ oil sands development. The directive sets out water disposal limits, which require operators to recycle produced water efficiently and ensure that all make-up sources are effectively used.

Our annual Water Use Performance Report discloses how much water energy companies in Alberta use—including how much water is being recycled for activities including oil sands (mining and in situ). This report is part of our industry performance program, which measures, evaluates, and reports on the energy development activities we regulate.

We also publish monthly and annual in situ water use information in our Thermal In Situ (TIS) Water Publication. This interactive dashboard allows users to filter and analyze the information in different ways.

In thermal in situ recovery, steam is injected into a reservoir at high pressure to heat the bitumen and reduce its viscosity so that it can flow to a wellbore. The rock above and around the reservoir—known as caprock—must act as a barrier to ensure that operations are safe and fluids are contained; caprock is critical to protecting the environment.

When they apply for our approval, operators must show that they have assessed the geology of the caprock and that it will prevent steam and reservoir fluids from escaping. As well, legacy wellbores in the area must be examined for thermal compatibility, as they are a potential conduit to the surface.

We conduct a detailed technical assessment of the project application, including the integrity of the surrounding geology, the geomechanics (understanding how the rocks, pressures, and temperatures will interact), and the engineering behind the project itself.

Given the relatively new technologies being used in thermal in situ development, reservoir containment is still an emerging issue and is being assessed on a project-by-project basis. We are engaging technical experts both internally and externally as we continue to analyze what constitutes a safe operating pressure for thermal in situ developments in Alberta.

Tailings are a by-product of the process used to extract bitumen from mined oil sands and consist of water, silt, sand, clay, and residual bitumen. Untreated fluid tailings are stored in tailings ponds, where most of the sand quickly separates from the water; the water can then be recycled for use in the bitumen extraction process. However, smaller particles of clay and silt remain in suspension and form fluid tailings. Untreated fluid tailings can take decades to settle, and even then only to a consistency of soft mud. The increase in oil sands mining development means that the volume of fluid tailings that must be stored will also grow. Managing these fluid tailings is an ongoing challenge for the oil sands mining industry.

When fluid tailings are not managed effectively, their volumes increase and more tailings ponds are needed to store them. To address this problem, in 2015 the Government of Alberta released a policy titled the Tailings Management Framework for Mineable Athabasca Oil Sands (TMF). The TMF aims to clarify the policies that guide tailings management.

The AER used this policy to create Directive 085: Fluid Tailings Management for Oil Sands Mining Projects. Directive 085 requires companies to measure tailings reduction on the basis of overall volume of fluid tailings, and tackles both existing fluid tailings and new fluid tailings growth. Under this directive, companies must also submit a tailings management plan for our approval. We share these plans, as well our decisions, on our website.

To develop Directive 085, the AER worked with a multistakeholder committee consisting of industry, First Nations, Métis, the Municipality of Wood Buffalo, and environmental organizations.

Part of the AER’s mandate is to ensure that Alberta’s resources are not wasted. Directive 082: Operating Criteria: Resource Recovery Requirements for Oil Sands Mine and Processing Plant Operations sets out operating criteria to identify the oil sands that an operator is required to mine and estimate the volume of bitumen that an operator is required to recover. We strive to allow industry appropriate operational flexibility, while at the same time ensuring the conservation of Alberta’s oil sands resource.

For thermal in situ operations, AER geologists and reservoir engineers assess the amount of bitumen in the ground and what has been produced. They then work with the companies to determine when production should be halted.

For more information on the AER and its processes or if you wish to speak with your local field centre or have general questions about energy project in the province of Alberta, contact our Customer Contact Centre, Monday to Friday (8:00 a.m. to 4:30 p.m.) at 1-855-297-8311 (toll free).

This document is part of the EnerFAQs series, which explains the AER’s regulations and processes as they relate to specific energy issues. Please visit our website to read more of the EnerFAQs series.

To learn more about the AER’s role in energy development, watch our Conversations that Matter video series on YouTube. The videos use plain language and animation to transform technical information and present it in a way that is easy to understand.

Every year we collect, compile, and publish a large amount of technical and regulatory information and data about Alberta’s energy development and resources for use by both industry and the general public. This includes raw data, statistics, application and hearing materials, and information on regulations, policies, and decisions.

Information and data may be downloaded from our website, or obtained from the AER’s Information Distribution Services (IDS). Find available AER data, reports, and services through the Products and Services Catalogue.

To place an order for information, please email InformationRequest@aer.ca or phone (403-297-8311).