’s Oil Sands……. A Canadian Success Story

Jim Carter Western Canadian Arbitrators Round Table Energy Forum , Alberta May 15, 2012 Global Energy Demand Continues To Grow

Source: http://www.eia.doe.gov/oiaf/ieo/highlights.html

2 World Oil Reserves (billions of barrels - established)

Saudi Arabia 260 Venezuela 211 Alberta/ Alberta (171) 175 Iran 137 Iraq 115 Kuwait 101.5 Abu Dhabi 92 Russia 60 Libya 46 Nigeria 37 Kazakhstan 30 Qatar 25 China 20 USA 19 Only 21% of the world’s proven oil reserves are accessible to Brazil 13 private sector investment (not state controlled); 53% of the Mexico 10 world’s open and accessible reserves are in Alberta’s oil sands.

Source: Oil & Gas Journal, January 2011 3 Sources of U.S. Oil Imports (2010)

Total U.S. Demand : 19.15 million bbl/d Total Imports : 9.16 million bbl/d

ALBERTA

Note: Total does not add up to 100% due to rounding Sources: US Energy Information Administration National Energy Board (Canada)

4 Oil Sands Development and Canada’s Economy: 2010-2035 • The development of Alberta’s The range of these oil sands will deliver economic results depends on the benefits throughout Canada: ability to secure pipeline access to new markets ‹ $91.3-$132.7 billion per year for growing oil sands in GDP gains (2010-2035 production average) ‹ 482-707 thousand jobs per year (2010-2035 average) ‹ $27.9-$37.9 billion per year in worker wages (2010-2035 average)

SOURCE: Economic Impacts of Staged Development of Oil Sands Projects in Alberta (2010-2035), Canadian Energy Research Institute (CERI), June 2011 Canada’s Offshore Oil & Gas

Atlantic Canada - Newfoundland and Labrador • Producing oil projects – Hibernia (1997), Terra Nova (2002) and White Rose (2005), North Amethyst (2010) • Hebron Project in 2017 • Produce 270,000 bpd = 35% of Canada’s conventional light crude production and 10% of all Canadian crude oil Nova Scotia • 1 producing natural gas field – Sable (1999) • Deep Panuke in 2012

6 Source for Graphics: Canadian Centre for Energy Information Publication, 2004 What are the Oil Sands?

• Naturally occurring mixture of sand, clay, water and bitumen – a very heavy oil

• Bitumen is separated from the sand and upgraded to refinery-ready crude oil

7 Mineable oil sands only exists under 0.1 per cent of Canada’s total boreal forest 3,200,000 km 2 – Boreal Forest 715 km² disturbed to date 72 km² reclaimed to date 8 Source: Alberta Government Presentation, July 2011 Oil sands production technologies have significantly evolved…

Mining – 20% of the oil sands resource is less than 200 feet deep

Source: Canadian Centre for Energy Information In-Situ – 80% of the oil sands resource is more than 200 feet deep Steam Assisted Gravity Drainage Cyclic Steam Process In-situ operations: (SAGD) • Do not have mines • Or tailings ponds • And they do not take water from the river

9 All aspects of Environmental Impacts are Regulated/Monitored

Air/GHG emission Limits Regional Air Quality Monitoring

Water intake & discharge limits

Mandatory/ Required reclamation Regional Water Quality Monitoring

10 Wells-To-Wheels Carbon Emissions

98 102 102 102 106 102 104

Source: Jacobs Consultancy, Life Cycle Assessment Comparison for North America and Imported Crudes, June 2009 11 Oil Sands and GHGs in Canada

The oil sands in a carbon constrained world… Canada GHG Emissions

• Oil sands = 6.5% of 0% 0% 0% Other Canada’s 2009 GHG 3% emissions Agriculture Buildings Oil Sands 8% 11% (Production and Upgrading) 6.5% Oil sands producers Industrial • 14% reduced average per Other Oil and Gas Production barrel GHG and Refining Electric 17% emissions Generation by 29% between 17% Transportation 1990 and 2009 25%

Source: Alberta Government Presentation, July 2011 12 Increasing Energy Efficiency in Extraction Processes…

…are now the norm.

13 New Technologies will Decrease Carbon Footprint…

THAI TM Solvent Recovery

Geothermal

Electro Thermal Dynamic Stripping

14 CCEMC - Mandate

CCEMC is an Alberta based not-for-profit corporation with a mandate to reduce greenhouse gas emissions and improve the ability to adapt to climate change by investing in the discovery, development and deployment of clean technology

CCEMC is enabled through the Government of Alberta’s regulatory approach

• Large regulated emitters must meet performance targets • Three options to comply – achieve target, offset or pay • Compliance is annual • The Fund is managed by the government • Funds are segregated • CCEMC – a delegated administrative organization 15 CCEMC Performance

In business for 2+ years – funding is refreshed annually

• Announced funding for 32 clean technology initiatives in 15 months • More than $167M allocated • More than $823M in project value (leverage 4:1) • Emissions reduction estimated at 1.7MT/ yr or 17 MT/10 yr • Expect >$1B worth of projects by end of this year

• SME RFP currently under review – May • New RFPs to be announced this spring o Energy efficiency o Renewable energy

16 Portfolio by Strategic Area Alberta – CCS Investments

• Alberta is investing more in Carbon Capture and Storage, on a per capita basis than any other jurisdiction in the world

• CCS expected to achieve 139MT (70% of 2050 reduction targets)

• $1.6B invested in Three Projects o Quest Project (Shell, Chevron, Marathon) o Alberta Carbon Trunk Line (Enhance/NorthWest Upgrading) o Swan Hills SynFuels - Insitu Coal Gasification

• 4MT target starting in 2015

18 Thank you

19 EXTRA SLIDES

20 Oil Sands Mining Projects – Summary

Project Status Production Capacity (bbl/day)

Projects in Operation 1,210,000

Projects Under Construction 290,000

Projects with Regulatory Approval 1040,000

Projects Under Regulatory Review 420,000

Projects Announced/Disclosed 530,000 Total Production Capacity 3,490,000

*Project information valid as of June 2011. Public sources used. 21 Oil Sands In-situ Projects – Summary

Project Status Production Capacity (bbl/day)

Projects in Operation 875,000

Projects Under Construction 495,500

Projects With Regulatory Approval 905,955

Projects Under Regulatory Review 689,500

Projects Announced/Disclosed 2,463,000

Total Production Capacity 5,488,955

…In-Situ Projects are “doable” in smaller sizes than mining projects – smaller players creating diversity

*Project information valid as of June 2011. Public sources used. 22