The Real Story of Canada's Oil Sands Boom

  • 28 Nov 2012
  • By The Economist Intelligence Unit
  • Topics: Energy

Lack of Labor, Equipment Impedes Full Potential

Portrayed by some journalists as a "hellhole of testosterone and tattoos," Fort McMurray, Alberta, home base for Canada's booming oil sands industry, gets its share of bad press.

While there is "a grimy grain of truth" in such stories, and oil sands extraction does cause environmental problems, there is another story about Fort McMurray, according to The Economist. It's a tale of innovation and energy reserves "so vast that they could have geopolitical consequences," the publication said in a November 17 article.

Canada's oil sands are estimated to hold some 170 billion barrels of crude that can be recovered economically with today's technology, giving the country the world's third-largest proven oil reserves after Saudi Arabia and Venezuela. Nationwide, Canada's natural-gas reserves are estimated at greater than 3 quadrillion cubic feet.

However, Canada's oil output, at 3.5 million barrels a day, is less than half that of the U.S. Canada faces several obstacles to reaching its full energy potential, which can be summed up in the areas of geology, capital, people and pipes.

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