Outlook for Albertas Oil & Gas Industry

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Alberta is blessed with both conventional oil deposits and the unconventional oil sands. Drilling for crude oil has been an important aspect of the history of this Canadian province since 1914, when the oil field at Turner Valley was discovered.

The province also played a key role in the energy industry of Canada when a well at Leduc near Edmonton was successfully drilled in 1947.

A closer look at the industry

The production of crude oil in Alberta contributed to about 28 percent of the country’s total production of conventional oil. With regard to oil sands, the deposits in Alberta, particular in the Athabasca Oil Sands area, can only be surpassed by the reserves of Saudi Arabia.

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Unlike crude oil, oil sands are too viscous to flow through pipes unless they are diluted or heated. The key areas of oil sands deposits measure about 140,200 square kilometers in area, and only two percent of these deposits have been extracted so far.

Huge investments amounting to about billions of dollars have been made for technology and infrastructure to enable the mining of these deposits.

Royalties returned to the government of Alberta amounted to approximately billions of dollars in the form of royalty fees from foreign corporations.

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This industry is still in its infancy, and it is growing rapidly as evidenced by a rise in the production rate to about 1.1 million barrels daily in 2006. This is predicted to reach three million barrels daily in 2020 and five million barrels daily in 2030.

Alberta also plays a role in petrochemical production with the companies in the province, contributing $13 billion in petrochemical products for the year 2006.

About $7 billion of these are marketed to other countries.

The petrochemical industry in this province accounts for 7,000 jobs and is the biggest in Canada with its four plants with a total yearly production capability of 8.6 billion pounds.

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