Wikipedia Deep Dive

Oil sands

13 min read

Forty thousand years ago, long before the first cities rose along the Tigris and Euphrates, Neanderthals were already putting oil to work. Archaeologists have found bitumen—a thick, tar-like form of petroleum—still clinging to their stone tools in Syria, used as a kind of prehistoric superglue to fasten handles to blades. It's a humbling thought: our extinct cousins figured out how to exploit hydrocarbons tens of thousands of years before we invented the internal combustion engine.

This ancient substance, which oozes naturally from the earth in certain places, would go on to waterproof Babylonian boats, seal Egyptian mummies, and eventually fuel one of the most contentious energy debates of our time. Today we call the deposits where it's found "oil sands"—though you'll also hear them called "tar sands," depending on who's doing the talking and what point they're trying to make.

What Exactly Are Oil Sands?

Imagine cold molasses on a winter morning. Now imagine that molasses mixed with sand and clay, saturating an underground formation the size of a small country. That's essentially what oil sands are.

More precisely, they're deposits of loose sand or partially hardened sandstone soaked with bitumen—a form of petroleum so thick and sticky that it won't flow unless you heat it up or dilute it with lighter oils. At room temperature, you could stick a twenty-foot pole into a bitumen seep and meet almost no resistance, as the explorer Alexander MacKenzie discovered when he passed through northern Alberta in 1787 on his way to the Arctic Ocean.

The key distinction here is between bitumen and regular crude oil. Conventional oil flows like, well, oil. You drill a hole, and the stuff comes gushing up, sometimes under its own pressure. Bitumen, by contrast, is more like cold peanut butter. Getting it out of the ground and into a refinery requires extraordinary effort, which is why the industry calls it "unconventional" petroleum.

A Tale of Two Countries

The world's largest oil sands deposits sit in just two places: Canada and Venezuela. Between them, they hold an almost incomprehensible amount of oil—somewhere between three and a half and four trillion barrels of the stuff locked in the ground. To put that in perspective, that's roughly twice the total conventional oil reserves of the entire rest of the world combined.

Canada's deposits sprawl across northern Alberta, covering more than 140,000 square kilometers—an area larger than England. The three main fields are the Athabasca deposit near Fort McMurray, the Cold Lake deposit near the Saskatchewan border, and the Peace River deposit in the northwest. Together they contain about 1.75 trillion barrels of crude bitumen, of which the Alberta government estimates roughly ten percent can be recovered with current technology. That still leaves Canada with approximately 173 billion barrels of recoverable reserves, placing it in the same league as Saudi Arabia.

Venezuela's Orinoco Belt holds a similar treasure, though calling it "oil sands" is technically incorrect. The Venezuelan deposits are less viscous than true bitumen—they're classified as "heavy" or "extra-heavy" oil rather than bitumen proper. The distinction matters for extraction: heavier oils require different techniques than the utterly immobile bitumen of northern Alberta. Venezuela estimates its recoverable reserves at 267 billion barrels, making it and Canada the petroleum superpowers of the unconventional oil world.

How Did All This Oil Get Here?

The story of Alberta's oil sands begins with a continental collision. About a hundred million years ago, the Pacific tectonic plate came grinding into North America from the west, pushing enormous island chains ahead of it—islands that would eventually become British Columbia. As the plates collided, the impact compressed the Alberta plains and thrust the Rocky Mountains skyward.

This wasn't just a matter of creating pretty scenery. The collision buried ancient sedimentary rocks—layers of organic-rich mud from prehistoric seas—to tremendous depths. Down there, under miles of overlying stone, temperatures and pressures rose high enough to cook the organic material into oil and natural gas. Think of it as a giant pressure cooker, running for millions of years.

But here's where it gets interesting. The same tectonic forces that created the oil also tilted the underground rock formations. Near the Rockies in the southwest, these formations lie eight kilometers deep. But they slope gradually upward toward the northeast, eventually pinching out to nothing against the ancient igneous rocks of the Canadian Shield, which form the bedrock of central Canada.

The light oil that formed deep beneath the mountains began a long, slow migration. Pushed by groundwater and guided by natural channels in the rock, it traveled northeast over hundreds of kilometers, rising gradually toward the surface. And as it approached shallower depths in what is now northern Alberta, something remarkable happened: bacteria ate it.

Not entirely, of course. But microbial action in the shallow formations degraded the oil, breaking down its lighter components and leaving behind the heavy, viscous bitumen that remains today. The same basic process occurred in Venezuela, where oil migrated northward from the Sierra Oriental mountains toward the Orinoco River, encountering biodegrading bacteria as it approached the surface.

From Canoe Caulk to Industrial Extraction

Long before Europeans arrived, the Cree and other First Nations peoples knew about the bitumen seeps along the Athabasca and Clearwater Rivers. They used the stuff to waterproof their birch bark canoes—a practical application that had probably been passed down for thousands of years.

The first European to record the deposits was a Cree man named Wa-Pa-Su, who brought a sample of the tar-like substance to Hudson's Bay Company trader Henry Kelsey in 1719. Kelsey noted it in his journals but probably didn't realize he was looking at one of the world's largest petroleum deposits. Sixty years later, fur trader Peter Pond paddled down the Clearwater River and described "springs of bitumen that flow along the ground."

For the next two centuries, the oil sands remained a curiosity. The technology to extract bitumen economically simply didn't exist. That began to change in the 1960s and accelerated dramatically during the oil crises of the 1970s.

When Arab oil producers embargoed exports in 1973 and the Iranian Revolution sent prices spiking in 1979, suddenly expensive unconventional oil didn't look so expensive anymore. Investment poured into Alberta. New extraction technologies emerged. And the oil sands gradually transformed from an interesting geological phenomenon into a major component of global energy supply.

Getting the Oil Out: Surface Mining and Steam

There are essentially two ways to extract bitumen from oil sands, and the choice depends largely on how deep the deposits lie.

For shallow deposits—those within about 75 meters of the surface—mining makes sense. Enormous shovels, each capable of scooping up more than 100 tons in a single bite, excavate the bitumen-soaked sand. The material gets trucked to processing facilities where hot water and chemicals separate the bitumen from the sand grains. The extracted bitumen then goes to upgraders that convert it into synthetic crude oil, which can be processed in conventional refineries.

This is oil extraction as strip mining. The scale is staggering. The mines near Fort McMurray are visible from space. They've transformed a boreal forest landscape into something resembling a moonscape of pits and tailings ponds. Only about three percent of Alberta's oil sands are shallow enough for surface mining, but that three percent contains roughly twenty percent of the recoverable oil—enough to justify the enormous investments required.

For deeper deposits, miners stay home and engineers send down steam. The most widely used technique is called Steam-Assisted Gravity Drainage, or SAGD (pronounced "sag-D"). It works like this: drill two horizontal wells, one above the other, into the oil sands formation. Inject steam through the upper well to heat the surrounding bitumen. As the bitumen warms, it becomes fluid enough to flow downward—aided by gravity—into the lower well, from which it's pumped to the surface.

It's an elegant solution to an otherwise intractable problem. You can't pump cold bitumen; it simply won't flow. But heat it with steam, and suddenly this cold molasses becomes a liquid you can work with. The technique was developed in Alberta during the 1980s and 1990s and has proven remarkably effective. Variations include Cyclic Steam Stimulation, where steam is injected, allowed to soak into the formation, and then the heated oil is pumped out through the same well—a process sometimes called "huff and puff."

The Economics: Boom, Bust, and Breakeven

Oil sands production is not cheap. In 2019, the Norwegian energy consultancy Rystad Energy ranked the world's oil-producing regions by their "breakeven price"—the minimum price per barrel needed to make extraction profitable. Alberta's oil sands came in at $83 per barrel, the most expensive of any significant producing region on Earth.

Compare that to Saudi Arabia, where the breakeven price for conventional oil hovers around $10 per barrel. Or the American shale plays, which can turn a profit at $40 to $60. Oil sands producers need prices to stay high just to stay in business.

This creates a boom-and-bust dynamic that has defined Alberta's economy for decades. When global oil prices surge—during the 1973 embargo, the 1979 Iranian Revolution, the 1990 Gulf War, the aftermath of September 11th—money floods into the oil sands. Investment expands, production ramps up, and Alberta prospers. When prices collapse—as they did in the 1980s, the 1990s, and again after 2014—projects get shelved, workers get laid off, and the province reels.

There's another complication: Alberta's oil is landlocked. The crude produced from oil sands is priced not against the global benchmark of Brent crude or even the American benchmark of West Texas Intermediate, but against a discounted price called Western Canadian Select. Because the oil has to travel by pipeline or rail rather than being loaded directly onto tankers, and because it's heavier and contains more sulfur than premium crudes, Alberta's producers often receive substantially less per barrel than their competitors elsewhere.

This differential can swing dramatically. In late 2018, the gap between Western Canadian Select and West Texas Intermediate briefly widened to more than $40 per barrel—meaning Alberta producers were selling their oil at barely half the North American price. Pipeline capacity constraints were largely to blame, which is why new pipeline projects have become such flashpoints of political controversy.

The Carbon Question

Here is where oil sands become truly contentious.

According to the Oil Climate Index, producing a barrel of oil from Alberta's oil sands generates about 31 percent more carbon dioxide than producing a barrel of conventional oil. The reasons are straightforward: heating bitumen with steam requires energy, usually from burning natural gas. Mining and processing ore is energy-intensive. Upgrading heavy bitumen into lighter synthetic crude oil requires yet more energy. At every step, carbon emissions accumulate.

Between 2005 and 2017, oil sands production was the single largest contributor to the increase in Canada's greenhouse gas emissions, according to Natural Resources Canada. The in-situ extraction methods—SAGD and its variants—were particularly emissions-intensive because of all the steam required.

This has made oil sands a focal point of climate activism. Environmental groups argue that the deposits represent "unburnable carbon"—reserves that, if fully exploited, would push global warming beyond tolerable limits. They point to the landscape destruction from surface mining, the tailings ponds filled with contaminated water, and the heavy carbon footprint of extraction as reasons to leave the bitumen in the ground.

Defenders of the industry counter that global demand for oil isn't going away anytime soon, and that it's better to produce petroleum in a well-regulated democracy like Canada than in authoritarian petro-states. They note that oil sands production provides energy security for North America, reducing dependence on imports from volatile regions. And they argue that technological improvements are gradually reducing the carbon intensity of extraction.

Both sides have a point, which is why the debate generates so much heat.

Tar Sands or Oil Sands: What's in a Name?

The terminology itself has become a political battleground.

For most of the 19th and early 20th centuries, everyone called them "tar sands." This made intuitive sense: the black, sticky substance looked like the tar that coated urban streets and rooftops, produced as a byproduct of manufacturing coal gas for heating and lighting.

But the comparison is chemically inaccurate. Tar is a human-made substance created by heating organic material—usually coal—in the absence of oxygen. Natural bitumen formed through completely different geological processes. It's much more closely related to asphalt (itself a petroleum product) than to coal tar.

The industry prefers "oil sands" because that's what they're producing: oil, albeit unconventional oil. Environmentalists often prefer "tar sands" because the term emphasizes the dirty, difficult nature of extraction and perhaps carries more negative connotations in the public mind.

Neither term is strictly correct—they're sand deposits saturated with bitumen, not tar—but language is rarely just about accuracy. Call them tar sands and you're signaling one set of sympathies; call them oil sands and you're signaling another.

The Cold Lake Complication

One of Alberta's three major deposits presents an unusual challenge that has nothing to do with extraction technology.

The Cold Lake oil sands sit partly underneath Canadian Forces Base Cold Lake, home to fighter jets that defend western Canadian airspace and cover the nation's Arctic territory. The base includes one of the largest live-drop bombing ranges in the world, where cruise missiles are tested and pilots practice delivering ordnance.

As oil production in the area has expanded, conflicts have emerged over airspace, land access, and resource allocation. You can't exactly drill wells in the middle of a bombing range, and the military isn't inclined to relocate. This has complicated development in ways that the geologists who discovered the deposits never anticipated.

The Cold Lake bitumen itself is somewhat different from the Athabasca deposits—it contains more of the lighter hydrocarbon compounds called alkanes and fewer of the heavy molecules called asphaltenes. This makes it more fluid, though still too viscous to pump without heating. Cyclic Steam Stimulation has proven particularly effective here.

Looking Forward

The future of oil sands remains deeply uncertain. On one hand, the deposits represent an enormous energy resource—enough oil to supply North American needs for a century at 2002 consumption levels, if even 30 percent could be extracted. The technology for getting it out continues to improve, and as long as the world needs petroleum, there will be buyers.

On the other hand, the economics are precarious and the environmental pressures are intensifying. A world serious about limiting carbon emissions might decide that oil sands simply aren't worth the cost—not just the financial cost, but the climate cost. Pipeline projects face fierce opposition. Investors increasingly worry about "stranded assets"—reserves that might never be developed if the world transitions away from fossil fuels.

The Neanderthals who first used bitumen 40,000 years ago couldn't have imagined any of this. They just needed something sticky to attach their tools. Forty millennia later, we're still working with the same substance—but the stakes have grown considerably higher.

What began as a natural curiosity, a place where black tar oozed from riverbanks and Indigenous peoples caulked their canoes, has become one of the defining energy resources of our era. How we choose to use it—or whether we choose to leave it in the ground—may shape the climate our descendants inherit. It's quite a journey for some very old, very sticky sand.