The following information quotes liberally from the Canadian Association of Petroleum Producers, the Energy Resources Conservation Board of Alberta, the National Energy Board of Canada and a variety of technical reports and publications.

The International Energy Agency ("IEA") projects that world primary energy demand will maintain steady growth over the next two decades, increasing on average by 1.5% per year from 2007 - 2030, resulting in an aggregate demand growth of approximately 40%. Fossil fuels, primarily crude oil, coal and natural gas, are expected to remain the dominant sources of primary energy, accounting for nearly 77% of this demand growth. Oil, in particular, is expected to remain the single largest fuel source throughout this period, accounting for 30% of demand in 2030.

According to the IEA, worldwide demand for oil was 85 million barrels per day ("bbls/d") in 2008 and is expected to grow to 105 million bbls/d by 2030, an annual growth rate of approximately 1%. Although the majority of this growth is expected in non-OECD countries such as China and India, North America is projected to be a large consumer of oil, representing 21% of total demand in 2030.

The IEA estimates that approximately one-third of the world's ultimately recoverable conventional oil resources have already been produced. By 2030, it is expected that one-half of the world's ultimately recoverable conventional oil resources will have been produced. Non-OPEC conventional production is not expected to be sufficient to keep pace with rising demand. Therefore, oil markets are expected to become more reliant on OPEC production and unconventional sources of crude oil.

Unconventional oil production, including bitumen, is expected to grow as a percentage of total world production from approximately 2.2% in 2008 to approximately 7.2% in 2030. This reflects an average annual growth rate of 6.6% per annum, far in excess of the expected annual growth rate for total production of 1.0% per annum. Canada's unconventional production, in particular, is expected to grow at approximately 5.4% per annum, reaching total production of 3.9 million bbls/d in 2030.

In terms of global energy sources, Canada's oil reserves are second only to those of Saudi Arabia, which has an estimated 264 billion barrels of oil reserves. Canada's oil reserves are estimated to be 179 billion barrels, of which 173 billion barrels are oil sands reserves considered economically recoverable with today's technology.

Canada's oil sands deposits contain a vast quantity of crude bitumen: an initial volume-in-place of 1.7 trillion barrels which includes an ultimate potential of 315 billion barrels recoverable. The Canadian Association of Petroleum Producers ("CAPP") estimates that, at current production levels, oil sands reserves could sustain production of 3.0 million barrels/day for more than 150 years.

CAPP predicts oil sands production to increase to approximately 2.2 million bbls/d in 2015 and up to 3.5 million bbls/d in 2025. This increase in production from the oil sands is expected to occur over a period in which conventional oil production in Canada declines.

Oil sands deposits are composed primarily of sand, silt and clay, water and bitumen, along with minor amounts of other minerals. Typical composition might be 75 to 80 percent inorganic material (mostly quartz sands), 3 to 7 percent water, and 10 to 12 percent by weight bitumen, with bitumen saturation varying between zero and 18 percent by weight.

Oil from the oil sands is often called "crude bitumen" to distinguish it from conventional crude oil. Bitumen is a thick, black, tar-like substance that pours extremely slowly. Compared to typical crude oils, which contain approximately 14 percent hydrogen, bitumen is deficient in hydrogen. In order to make crude bitumen an acceptable feedstock for conventional refineries, it must be upgraded through the addition of hydrogen or the rejection of carbon. In order to transport crude bitumen to refineries, it must be blended with a diluent, usually condensate, to meet pipeline specifications for density and viscosity.

Oil sands deposits are located at a variety of depths. Economically recoverable oil sands that are located less than 200 feet deep can be recovered by open pit mining methods; those located deeper than 200 feet can be produced using in situ (or "in place") methods of bitumen recovery.

Alberta has three major oil sands areas, each with a number of bitumen-bearing deposits: Athabasca, Cold Lake and Peace River. According to the Energy Resources Conservation Board ("ERCB") of Alberta, an estimated 20 percent of the Province's initial established reserves are mineable; the remainder are suitable only for in situ recovery methods. The Athabasca oil sands cover the largest area; this is also where the province's mineable deposits are located. The ERCB also estimates that, in Alberta, the vast majority of lands thought to contain bitumen that could be recovered by either method are currently already leased.

While both oil sands mining and in situ production methods impact the land, the surface footprint of in situ production is significantly smaller than that of a mine, and according to CAPP on a per barrel basis can be smaller than conventional oil production. An open pit mine's footprint ultimately affects the entire surface area over the resource and also requires tailings ponds, while in situ production requires only well pads on the surface for well heads, similar to conventional oil and gas, but, with more barrels typically recovered per well pad.

In open pit mining operations, overburden is removed, oil sands ore is mined and bitumen is extracted from the mined material essentially using hot water processes. With in situ recovery, generally steam, water or other solvents are injected into the reservoir to reduce the viscosity of the bitumen, which allows it to flow to a vertical or horizontal wellbore.

Commercial production from the Alberta oil sands began in the 1960s. The first two integrated mining projects were Great Canadian Oil Sands (now Suncor), which began operations in 1967, and Syncrude, which came onstream in 1978. The ERCB estimates that, at the end of 2008, almost three-quarters of the initial established reserves in the surface-mineable area were under active development. There are now three mining projects, another two mine projects are under construction and seven are in various stages of project development.

Aside from primary production (including water injection), which has limited use in Cold Lake and Peace River areas, two main in situ methods are being used to commercially produce bitumen: cyclic steam stimulation (CSS) and steam-assisted gravity drainage (SAGD).

Upgrading is a process performed by specialized refineries called upgraders that transform bitumen into higher value hydrocarbons, most of which require additional processing at a refined products refinery before they can be used by end users. The primary output of oil sands upgraders is a light crude oil. All oil sands mining projects currently in operation are integrated with upgraders, while most in situ projects are not integrated with upgraders. In recent years, the differential of bitumen pricing to light crude oil pricing (the "Bitumen - Light Differential") has narrowed considerably. The increased demand for bitumen relative to the available supply has reduced the economic attractiveness of upgrading and has resulted in higher netbacks for non-upgraded bitumen.

Bitumen blends from Canadian oil sands could potentially be exported to world markets as early as 2016; assuming planned developments are completed as scheduled. If completed, these future pipelines will potentially allow oil sands producers to compete with other regions such as the Persian Gulf and South America since the nautical distance between Kitimat and east Asia is comparable to the distance between east Asia and the Persian Gulf and is shorter than the distance between Asia and South America. These pipeline projects are currently being evaluated and constructed in response to strong support from oil sands producers.

In CAPP's most recent forecast they state "given signs of the beginning of economic recovery, oil sands producers are proceeding with a more balanced pace of development. Producers have returned many projects back to active development but remain mindful to establish a more controlled cost environment as they remain cautious with their estimates for future oil prices."

In addition to economic factors, the challenges Canada's oil sands industry faces include long term skilled labour shortages and environmental issues. However, according to the National Energy Board: "The challenges faced by the oil sands industry are counter-balanced by the opportunities." At a time of increasing resource nationalism around the world, Canada's huge oil sands reserves, set in a climate of relatively stable political and economic policy, represent an attractive target for investment. The potential for technological innovation to reduce the costs of bitumen extraction and upgrading is an additional attraction. Given the outlook for continued higher oil prices, return on investment should be sufficient to drive oil sands expansion."