The need for a marketing strategy for Alberta bitumen

Over the past 15 years, government and industry have invested heavily in research and development of new technology for extracting bitumen from the Alberta oil sands. The results have been a dramatic increase in the fraction of oil sands deposits that could be economically exploited and a drop in production costs. However, no rapid increase in bitumen recovery has been achieved and most new bitumen production projects have been postponed or cancelled. This is the result of very variable prices for bitumen and the inadequacy of a marketing strategy which relies on the sale of raw bitumen. Options such as transport of bitumen to southern markets are limited by the need to reduce bitumen viscosity for pipelining and by the limited market for emulsified or diluted bitumen. Another possible strategy, conversion of the bitumen to synthetic crude oil, is limited by high costs, product characteristics (too much diesel and not enough gasoline), and a market limited to specialized refineries. A third strategy is to convert and refine bitumen to transportation fuels in Alberta, using inexpensive local natural gas, and transporting the products through existing pipeline facilities. 3 figs