The oil sands of Alberta, Canada are a good illustration of how difficult it is to accurately measure oil and gas reserves. Oil sands are deposits of bitumen, a molasses-like viscous oil that will not flow unless heated or diluted with lighter hydrocarbons. Although the Alberta oil sands are now considered second only to the Saudi Arabia reserves in the potential amount of recoverable oil, for many years these were not viewed as real reserves because they were not economical to develop.
By the mid-2000s, the main town in the oil sands region, Fort McMurray, was in the midst of a boom not unlike the gold rush booms of the 1800s. Housing and labor were scarce and the infrastructure was struggling to keep pace with the influx of people, companies, and capital. The development of the oil sands occurred because of a combination of rising oil prices and technological innovation. There were estimates that oil sands production could reach 3 million barrels per day (b/d) by 2020 and possibly even 5 million b/d by 2030.
Oil and gas play a vital role in the global economy. The International Energy Agency (IEA) predicts that energy demand will rise by an average of 1.5% each year through 2030. Demand in 2030 will be about 60% higher than in 2000. Demand in the non-OECD (Organization for Economic Cooperation and Development) nations will account for approximately 80% of the global increase. Most of the world’s growing energy needs through 2030 will continue to be met by oil, gas, and coal.
With increased energy efficiency, energy as a percentage of the total gross domestic product (GDP) has fallen and is expected to continue to fall.