US Energy Secretary Sam Bodman tours Alberta Oilsand with Shell President

Oilsands work just getting started
Companies have global-level growth plans for Alberta's rich-making resource

As seen in the The Edmonton Journal
Aug 6, 2007

Edmonton / A year after former Shell Canada president Clive Mather gave out a hint, the scale of development on Alberta's horizon is coming into sharper focus.

"What we're saying is this is only the beginning," Mather said as he escorted U.S. Energy Secretary Samuel Bodman on an oilsands tour north of Fort McMurray.
"There's an awful lot more to come," Mather said. Syncrude Canada chief executive Charles Ruigrok echoed his Shell peer, saying the province's 141,000-square-kilometre bitumen belt is catching and holding the attention of global industry and finance.

In January and last week, the Athabasca Oil Sands Project gave some answers in applications for regulatory approvals of its growth plans.
The Athabasca group alone -- led by 60-per-cent owner Shell and backed by Chevron Canada and Western Oil Sands with 20 per cent each -- has set its sights on achieving production of 770,000 barrels per day from its 1,200 square kilometres of Fort McMurray bitumen leases by about 2020.

It took the entire industry 67 years and 56,772 wells to build up Alberta output of conventional liquid oil into the 800,000-barrels-a-day range, from the first discovery at Waterton in 1902 until 1969, show records of the Canadian Association of Petroleum Producers.

The oilsands are "world class," Texas giant Marathon Oil Corp. added in announcing its $6.5-billion takeover of Western.

Shell emphasized that all its majority share of the Athabasca reserves will be processed in Alberta, yielding maximum value to the firm's Canadian operations and the provincial economy.
Marathon, a 120-year-old American industry mainstay with few Canadian assets, will eventually export most of its minority of the Athabasca bitumen to its seven U.S. refineries and 5,700 service stations.

Chevron has yet to make known plans for all its share of Athabasca reserves, or for an estimated 7.5 billion barrels of bitumen in 730 square kilometres of leases known as Ells River that the firm bought west of Fort McMurray 16 months ago.

But the Shell program alone spells more than a decade of heavy industrial work in the Fort Saskatchewan area east of Edmonton. Forecast expenditures of $22 billion to $27 billion include nearly $8 billion in wages for local workers.

The Scotford mega-upgrader will be built as four 100,000-barrels-a-day plants. It will be a continuous construction project lasting about 13 years provided oil markets, government policies and economic conditions stay favourable.

Shell wrote an invitation to industrial housing builders into its construction applications to the Alberta Energy and Utilities Board and Alberta Environment.
The region could use the sprawling, hotel-like worker complexes known as "open camps" that have sprouted in the Fort McMurray region, the documents predict.

Building each of the four upgrader plants will require 3,000 to 4,000 trades personnel at construction activity peaks.

But the mega-upgrader is just the biggest of many large projects in the 310-square-kilometre Alberta Industrial Heartland district northeast of Edmonton.
Counting all currently known developments "the cumulative construction workforce is expected to remain high, at more than 8,000 workers, from mid-2008 to early 2013, with a peak of about 13,300 workers in late 2011," Shell forecasts.
"Based on an estimated 7,500 local trades people available, additional workers from outside the region or province will be needed."
In highly skilled occupations needed by industrial projects, Edmonton oilsands jobs will be more like careers than the traditional feast-or-famine pattern of construction contracting.
Shell vowed "to use the project's lengthy construction schedule to offer the opportunity of long-term, stable employment as a means of attracting and retaining industrial workers and potentially attracting out-of-region workers."

When finished, the chain of four upgrader plants is expected to create 1,438 permanent jobs including 1,138 full-time staff and 300 contractor positions.

Since the Edmonton area already has a population of more than a million, Shell predicts it will absorb the upgrader people without repeating the notorious boomtown trauma of Fort McMurray.

Alberta Oil Sands 1 million barrells day - Significant -Strategic - Secure - Scalable

The Alberta oilsands are expected to make a significant contribution to future energy supplies.

One of the key advantages of the oilsands is that they are secure, safe and proven. As well, they can be profitably produced at existing and projected world oil prices.

Currently, oilsands production averages more than a million barrels a day.

Within the next twelve years, oilsands production is expected to increase to three million barrels a day.

The Alberta oilsands are contained in 140,800 square kilometres in northern Alberta. It is estimated there are between 1.7 and 2.5 trillion barrels of oil contained in the oilsands.

There are 178 billion barrels of proven oil reserves (second only to Saudi Arabia), with potential reserves of 335 billion barrels.

While the Alberta oilsands were discovered more than 100 years ago, it is only in the past thirty years they have become economically viable. In 1985 the cost of producing a barrel of oil was in the order of $40 a barrel. Through extensive research and development efforts, these costs were reduced to about $20 per barrel in 2000. However, because of ongoing shortages in labour and industrial capacity in Alberta, these prices have begun to increase appreciably.

The lack of resources has led to significant cost over-runs within several oilsands projects and may threaten to delay future oilsands projects.

The first oilsands plant, Great Canadian Oil Sands, opened in 1969. A second major plant, Syncrude Canada Ltd, began operations in 1978.

Today, there are more than 50 oilsands projects with investments valued at more than $104 billion.

Oilsands projects require additional investments in upgraders, infrastructure, pipelines, urban development and utility services. Currently, the Government of Alberta reports a total of $169 billion of announced investments within Alberta.

The Vision 2020 video shown in this website provides an important insight into the magnitude and scope of the Alberta oilsands.

This development has now become the world’s largest industrial complex, using the world’s biggest trucks and shovels.

Tied to the development of the oilsands is a massive expansion of upgraders and infrastructure support systems in the Edmonton region. Not only does Alberta wish to develop its oilsands potential, it needs to develop its downstream, value-added industry potential.

read more Oil Sands business mission from the Netherlands June 9-16, 2007