Oil and Natural Gas

Oil and natural gas are non-renewable resources that form as a result of specific environmental conditions. Oil and natural gas were created from organisms that lived in the water and were buried under aquatic sediments. Millions of years of heat, pressure and chemical reactions turned the remains into crude oil. In deeper, hot regions underground, the process continued until natural gas was formed. This process is similar to the formation of coal, although it is variables such as the original organic material and length and amount of pressure that determine which hydrocarbon will be produced.

Crude oil is the liquid oil that comes out of the ground. Crude oil is refined to produce fuel for automobiles, airplanes, boats and trains. It is also refined to heat homes and buildings, generate electricity, and manufacture lubricants, plastics, and asphalt. As you can see, crude oil plays an important role in the daily lives of Canadians.

Bitumen is crude oil in a solid form. When it is extracted, it is first upgraded into a high-quality, fluid crude oil. Then it is usually transported through pipelines to refineries, where the refined oils that we use on a daily basis are produced.

Alberta is home to vast quantities of bitumen, with the largest deposit found in the Athabasca oil sands near Fort McMurray. The Athabasca oil sands extend from surface deposits to deposits at depths of more than 760 metres, representing 209 billion cubic metres of potentially recoverable bitumen. There are also significant deposits at Cold Lake (35 billion cubic metres) and Peace River (23 billion cubic metres). The amount of bitumen in Alberta makes up more than one third of the world's known reserves of conventional crude oil.

In Canada, natural gas is the leading source of heat for homes and businesses. A relatively economical and clean energy source, it is also used to power household appliances and generate electricity. Natural gas deposits underlie about 40 percent of Alberta, and reserves are estimated to total up to 6,276 billion cubic metres. As a result, Alberta produces almost 80 percent of all of Canada’s natural gas production.