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Call me maybe

September 23, 2013

Production from Alberta’s oil sands stands at about 2 million barrels per day, with an expected rise to 3.7 million bbl/d. by 2021. The number of “call me maybe” decision makers continues to grow.

The oil sands areas in northern Alberta contain an estimated 1.84 trillion barrels (initial volume in place) of crude bitumen.  About 9 percent of this volume (168.7 billion barrels) is recoverable using current technology and is considered to be a proven reserve. Of the total 168.7 billion barrels of proven bitumen reserves, about 80 percent is considered recoverable by in-situ methods and 20 percent by surface mining methods.  Oil sands within 75 meters of the surface can be mined; whereas, oil sands below this threshold must be extracted using in-situ methods. 

The Canadian Natural Resources Minister noted “Despite difficulties related to new pipeline capacity, Canadian crude producers are unlikely to slow down production and will turn to rail to ensure their product reaches market.” The Alberta and federal government are actively seeking markets for bitumen. They are awaiting a number of “call me maybe” decision makers.

Meanwhile a parade of cabinet ministers and senior bureaucrats will head to British Columbia starting this month as part of a major push to mollify opponents of building oil pipelines to the West Coast. Prime Minister Stephen Harper is signalling he intends to make progress on proposals to connect Alberta’s oilsands with ports in British Columbia and the lucrative Asian markets beyond. The new initiative is in large part a response to a report from the prime minister’s special pipelines representative in British Columbia. Douglas Eyford told Harper last month that negotiations with First Nations — especially on Enbridge’s proposed Northern Gateway — are a mess.






The inexorable rise in oil sands production and the rail disaster at Lac Magnetic have increased the urgency of the federal government to find a market for Canada’s #1 export commodity. It hopes to convert a few “call me maybes” to “OK to proceed”.

In the case of First Nations that do not have self-government, this may be an opportunity to spur the federal government into settling outstanding claims and putting in place self-government arrangements.