The document provides information about Alberta's oilsands, including: - The oilsands deposits are estimated to contain over 1.7 trillion barrels of bitumen. Currently, 175 billion barrels are proven reserves. - Production is expected to increase from the current 1 million barrels per day to 3 million barrels per day by 2015. - There are two main methods for extracting bitumen - open pit mining and in-situ recovery using techniques like steam injection or cyclic steam stimulation.

1. The FACTS about ALBERTA OILSANDS Source: Calgary Herald Photo – Oct.21/05 Presentation Prepared By: Tony Yep - July/2006

3. TOTAL 1103 Source: Calgary Herald – Our Alberta, Issue 4, “Black Gold” – Oct.2/05

5. ALBERTA HAS THE MAJORITY OF THE OILSANDS DEPOSITS (The Athabasca Oilsands cover an area equal in size to New Brunswick – about 80,000 sq. km.) Source: Calgary Herald – Our Alberta, Issue 4, “Black Gold” – Oct.2/05

6. OPEN PIT OILSANDS MINING 1. DIGGING IT OUT Mining shovels dig into the oilsand and load it onto huge trucks. The trucks carry the oilsand to crushers. 2. CONDITIONING AND HYDROTRANSPORTING The oilsand is broken up in crushers and coarse material is removed. Hot water is added to the oilsands. The resulting slurry is fed via hydro-transport pipeline to the extraction plant. Source: Calgary Herald Article on Oilsands – Oct.23/05

8. OPEN PIT OILSANDS MINING 5. UPGRADING Upgrading converts bitumen into a lighter, less dense product, using heat to “crack” big molecules into smaller fragments. First, naphtha is removed and recycled. Next, upgrading usually follows this process: The bitumen is sent to drums where petroleum coke, the heavy bottom material, is removed. Coke, similar to coal, can be used as a fuel source elsewhere, or stockpiled and sold. Hydrocracking may also be used to add hydrogen and break up molecules. Hydrocarbon vapours are stabilized and sent to fractionators where they are separated into marketable products such as naphtha, kerosene and gas oil. Source: Calgary Herald Article on Oilsands – Oct.23/05

10. IN-GROUND OIL RECOVERY In the most popular in-situ method, two horizontal wells are drilled in parallel through the oil-bearing formation. Steam is injected into the upper well, heating and softening the bitumen. The lower horizontal well captures the bitumen then pumps it to the surface. The recovered bitumen is sent by pipeline to be upgraded. STEAM ASSISTED GRAVITY DRAINAGE (SAGD) Source: Calgary Herald Article on Oilsands – Oct.23/05

11. IN-GROUND OIL RECOVERY Also known as “huff and puff” technology, this process requires just one well bore. Steam is injected for several weeks, mobilizing the cold bitumen. Then the flow on the injection well is reversed, producing oil through the same bore. Steam is re-injected to begin a new cycle when oil production falls below a critical threshold. CYCLIC STEAM STIMULATION (CSS) Source: Calgary Herald Article on Oilsands – Oct.23/05

12. IN-GROUND OIL RECOVERY TOE-TO-HEEL AIR INJECTION (THAI) The process combines a vertical air injection well with a horizontal production well. The wells are pre-heated with steam. When air is injected, spontaneous combustion occurs. Heat loosens the oil, allowing it to flow by gravity to the horizontal production well. The combustion front sweeps the oil from the toe to the heel of the producing well. Source: Calgary Herald Article on Oilsands – Oct.23/05

13. IN-GROUND OIL RECOVERY VAPOUR EXTRACTION PROCESS (VAPEX) This experimental method is similar to SAGD. But instead of steam, solvents such as ethane or propane are injected into the oilsands, producing a thinner bitumen and creating a vapour chamber through which the oil flows as it drains. It can be applied in paired horizontal wells, single horizontal wells or a combination. Source: Calgary Herald Article on Oilsands – Oct.23/05

15. KEY PLAYERS IN THE ATHABASCA OILSANDS Source: Calgary Herald Article on Oil Sands - October 22, 2005 & June 30, 2006

16. WHAT DOES IT COST TO PRODUCE? National Energy Board Data Source: Calgary Herald Article on Oilsands – Oct.21/05 Note : The Operating cost looks at the basic cost of extracting bitumen from oilsands. The Supply cost include other costs such as capital and operating expenses, taxes and royalties.

17. SCARY THOUGHTS World Oil Consumption 80 million bpd 120 million bpd 2005 2025 37.8 yrs 25 yrs If China and India increase the consumption to 120 mbpd, this will not be sustainable in the long run. More energy reserves/sources will need to be found. Note: At 20 mbpd consumption, United States at 4.6% of the world population is consuming 25% of the oil production.

18. OIL CONSUMPTION / PRODUCTION BY COUNTRY 2005 DATA (BASED ON 80 MBPD TOTAL) Source: CIA World Fact Book Jan.10/05 Source: BP Statistical Review of World Energy 2005 www.NationMaster.com website www.NationMaster.com website

19. SCARY THOUGHTS Given this supply and demand scenario, what do you think? In Alberta, if the price of oil remains above $40 US/barrel, all existing facilities will expand, and planned new projects will go ahead. Question Do you think oil will fall to below $40 US/Barrel?

22. DOES ALBERTA SHARE ITS WEALTH WITH THE REST OF CANADA ? Based on the CERI data, a resounding YES ! Alberta has a little more than one-third share. Is this fair? What is good for Alberta is good for Canada and the other provinces. Source: Calgary Herald article– Oct.25/05

23. THANKS ! ANY QUESTIONS? P.S. I don’t ever complain about the price of gas!