Production of conventional oil in Canada was predicted to peak in 2006 and decline rapidly thereafter. But experts had overlooked Canada's 'tar sands.' Located mainly in the province of Alberta, lying beneath almost 140,000 sq. kilometers of forest, are Canada's tar sands.They hold almost 1.7 trillion barrels of crude bitumen (the technical term for the fuel extracted from them), of which 174 billion barrels is estimated to be recoverable, using current technology.
After the US Department of Energy formally acknowledged these reserves in 2003, Canada's reserves jumped from 21st to 2nd highest in the world, only behind those of Saudi Arabia.Canada exports about 66% of its oil production, and since the implementation of NAFTA almost 99% of the exports are to America. Presently Canada exports almost 2 million barrels of oil a day to America, meeting over 7% of its daily consumption needs.
Major oil companies from around the world like Royal Dutch/Shell, Exxon Mobil, Chevron Texaco and Total Fina have lined up billions of dollars in investments in developing the tar sands.The seriousness of interest can be understood from the fact that the production target of 1 million barrels per day was achieved in 2004, 16 years ahead of the scheduled date laid out in 1995. More than $100 billion of new investment has been announced between 2006 and 2015. The projected production target is 3 to 4 million barrels per day by 2015 which is set to go all the way up to 5 million barrels per day by 2030, if not earlier.
Canada's 'black gold' has come to be regarded as an abundant, secure, and affordable source of crude oil, with the US Energy Policy Development Group describing it as a pillar of sustained North American energy and economic security. Canada, already the world's largest exporter of oil to America looks set to retain this position in the decades to come.