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.

Canada is the world's fifth largest producer of energy. It is the world's third largest natural gas producer and its seventh largest crude oil producer. Between 1980 and 2007, energy production in Canada almost doubled, with oil and gas accounting for 90 percent of the increase.

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 per day for more than 150 years.

Production from the oil sands continues to replace diminishing reserves of conventional crude oil in Western Canada. According to CAPP, oil sands production has grown four-fold since 1990 and, in 2007, exceeded 1.2 million barrels per day. Today, oil sands production accounts for one out of every two barrels of production in Western Canada. By 2015, oil sands' share of production will rise to three out of every four barrels. By 2015, CAPP estimates oil sands production will be 2.8 million barrels per day and, by 2020, 3.5 million barrels per day.

CAPP reports that, from 1997 to 2006, a total of $59 billion Cdn was invested in the oil sands and further predicts that, between 2007 and 2010, another $80 billion will be invested in the industry which has become increasingly vital to meeting the energy needs of both Canada and the United States. Canada is the largest supplier of energy to the U.S. and, in 2007, exported over 1.8 million barrels of crude oil per day to the U.S., almost 19 percent of total U.S. demand. About 1.6 million barrels per day come from Western Canada.

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 materials (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. It 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.

In 2007, Alberta produced 243 million barrels of oil from the mineable oil sands and 196 million barrels from the in-situ area; this is equivalent to 1.2 million barrels per day. 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 well bore.

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 2007, almost two-thirds 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). In the Athabasca oil sands area, there are nine operating in-situ projects and another 20 in various stages of development. In the Cold Lake area, three in-situ projects are operating and two more are in development. The Peace River area has one operating in-situ project and another one in the development stage.

The term upgrading is given to a process that converts bitumen and heavy crude oil into synthetic crude oil. Alberta's first crude bitumen upgrader is located in Edmonton; two more are operating in the Athabasca region. Three upgraders are currently under construction in the Athabasca region and another ten are in various stages of development.

Oil sands projects are capital intensive, mainly driven by global steel prices and construction costs. CAPP estimates that an integrated, 100,000 barrels per day oil sands project which cost $3.3 billion to construct in 2001 would now cost approximately $10 to $11 billion Cdn.

In addition to capital costs, the challenges Canada's oil sands industry faces include 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 vestment should be sufficient to drive oil sands expansion."