Over the past few decades oil sand companies have been experimenting with new ways of extracting oil from bituminous resources, it is down to this that the North American oil sands market is forecast to reach a value of approximately $25.8 billion by the end of 2013.
Oil sands are a type of unconventional petroleum deposit. The oil sands are loose sand or partially consolidated sandstone containing naturally occurring mixtures of sand, clay, and water, saturated with a dense and extremely viscous form of petroleum technically referred to as bitumen (or colloquially tar due to its similar appearance, odour and colour).
Oil sands can be mined or the oil can be extracted in-situ using thermal recovery techniques. Typically, oil sands contain about 75% inorganic matter, 10% bitumen, 10% silt and clay, and 5% water.
Oil sand is sold in two forms: (1) as a raw bitumen that must be blended with a diluent for transport and (2) as a synthetic crude oil (SCO) after being upgraded to constitute light crude. Bitumen is a thick tar-like substance that must be upgraded by adding hydrogen or removing some of the carbon.
The estimated deposits in the United States could be as much as 2 trillion barrels. The estimates include deposits that have not yet been discovered; proven reserves of bitumen contain approximately 100 billion barrels
Gradually since 2000, oil production from oil sands have become an increasingly viable option, and with the price of oil rising, the extraction of oil through steam injection and mining has become profitable.
The US experience with oil sands has been much different to that of Canada. The US government collaborated with several major oil companies as early as the 1930s to demonstrate mining of and in-situ production from U.S. oil sand deposits.
However, a number of obstacles, including the remote and difficult topography, scattered deposits, and lack of water, have resulted in an uneconomic oil resource base. Only modest amounts are being produced in Utah and California. US oil sands would likely require significant R&D and capital investment over many years to be commercially viable.
Prospects for commercial development within the North American oil sands market are uncertain at best because of the huge capital investment required and the relatively small and fragmented resource base. The Task Force on Strategic Unconventional Fuels reported that oil sands comprise only about 0.6% of US solid and liquid fuel resources, while oil shale accounts for nearly 25% of the total resource base.
For more information on the North American oil sands market, see the latest research: North American Oil Sands Market
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