The Canadian Oil Sands Woodrow Wilson Forum

1. The Canadian Oil SandsWoodrow Wilson Forum October 17, 2005

2. Canada’s Oil and Gas Industryin the North American Energy Economy Canada is the world’s 3rd largest natural gas producer Canada is the world’s 9th largest crude oil producer and moving up the list quickly with oil sands production increasing Industry Overview 500,000 jobs C$35 Billion capital investment C$20 Billion in payments to federal and provincial governments #1 private sector investor in Canada Canada is the largest supplier of energy to the United States

3. U.S. Natural Gas Imports from Canada

4. U.S. Imports of Crude Oil and Petroleum Products by Country of Origin

5. Industry Capital Spending Cdn $billions

6. Canadian Crude Oil Production by Region

7. Canadian Natural Gas Production by Region

9. Global Crude Oil Reserves by Country

10. Oil Sands Projects in Three Deposits 2003 a land mark as oil sands production hits 1 million b/d Most development concentrated in Athabasca and Cold Lake areas - only Shell at Peace River since 1941 $87 billion not ion this forecast time frame, this figure includes some infrastructure like pipelines $ Significant Potential - EUB has over 100 scheme registered2003 a land mark as oil sands production hits 1 million b/d Most development concentrated in Athabasca and Cold Lake areas - only Shell at Peace River since 1941 $87 billion not ion this forecast time frame, this figure includes some infrastructure like pipelines $ Significant Potential - EUB has over 100 scheme registered

11. Total Oil Sands Project Production: 2003-2015

12. Oil Sands Production Technologies 2003 a land mark as oil sands production hits 1 million b/d Most development concentrated in Athabasca and Cold Lake areas - only Shell at Peace River since 1941 $87 billion not ion this forecast time frame, this figure includes some infrastructure like pipelines $ Significant Potential - EUB has over 100 scheme registered2003 a land mark as oil sands production hits 1 million b/d Most development concentrated in Athabasca and Cold Lake areas - only Shell at Peace River since 1941 $87 billion not ion this forecast time frame, this figure includes some infrastructure like pipelines $ Significant Potential - EUB has over 100 scheme registered

13. Oil Sands Supply Costs by Recovery Typeincludes capital, operating, royalty, taxes and return

14. Canadian Oil ProductionConventional, Oil Sands and Offshore

15. Environmental Stewardship Air Monitoring programs Reducing emissions Water Reduce, recycle and reuse More efficient, 90+% recycle Land Reclamation and remediation Directional drilling from single site to reduce impact

16. Canada’s Oil SandsChallenges to achieve this potential Continuing to Lower Costs Alternatives to natural gas for fuel – free it up for other markets Workforce and Infrastructure Ensuring adequate workforces – trades, technical, professional Roads, Housing and Municipal services Access to Markets – Pipelines/Refineries Need new pipelines Decisions needed now for pipelines in 4-5 years Need new refineries, expansions and modifications For many conventional refineries, oil sands is either heavier (bitumen blend) or lighter (upgraded crude) than their current feedstock

17. Natural Gas Use in Oil Sands DecliningNatural Gas Consumed per Barrel of Oil Sands Production

18. Canadian and U.S. Crude Oil Pipeline Alternatives

19. SEC Bitumen Reserves Disclosurefor Financial Reporting

20. Topics for Discussion? How can Canada and the US overcome the new constraints to oil sands growth? – workforce, infrastructure, rising costs How and where to convert oil sands into petroleum products? What can be done from the US to help with the workforce shortages? Where will oil sands production be consumed? If in North America, where? What about offshore markets? What needs to change in North America as the oil slate shifts to heavier oil? Can US gasification technology free up natural gas for other North American markets? How does this fit in a world of CO2 reductions?