Production Various forecast- ers have lowered their expectation for increases in bitumen production from Alberta oil sands, but most still see a siz- able rise during the next decade, with bitumen production of at least 2 million b/d in 2018 compared with 1.3 million b/d in 2008.

Alberta's Energy Resources Conservation Board in its recent update forecasts bitumen production to reach 2.7 million b/d in 2018.1 This rate is a decrease from its forecast last year that saw oil sands production increasing to 3.23 million b/d in 2017.

For determining its current projections, ERCB has lowered its crude price assumptions and now expects US West Texas Intermediate to average $5 5 /bbl in 2009 and increase to $120/bbl in 2018. The lower oil price expectations are one reason for the lower production forecasts.

MINABI.E AREAS UNDER ACTIVE DEVEI.OPMENT Table 1

The lower oil price scenario also ties into the slowdown in world economies that has lowered future oil demand and investment expectations.

Another recent forecast from the Canadian Association of Petroleum Producers estimates oil sands production under a growth scenario will reach 2.6 million b/d in 2018 and 3.3 million b/d in 2025. Without growth and with only projects currently in operations and under construc- tion producing, CAPP expects production to remain relatively constant at 1.957 million b/d in 2018 and 1.987 million b/d in 2025.

In 2008, the Canadian Energy Research Institute forecast oil sands production potential of more than 5 million b/d by 2015 and 6 million b/d by 2030 and a reference case production of 3.4 million b/ d in 2015 and 5 million b/d by 2030. CERI now has lowered its production outlook. In its February 2009 outlook, the institute now expects oil sands production to range from 1 .9 to 2.9 million b/d in 2015 and from 3.7 to 5.4 million b/din2030.3

QlL SANDS REGIONS Fig.1

OIL SANDS PRODUCTION FORECAST Fig. 2

Oil sands resources

The main deposits discussed in ERCB's report are the Athabasca Wabiskaw-McMurray Cold Lake Clearwater, and Peace River Bluesky- Gething that cover about 54,000 sq miles (Fig. 1 ) . Besides showing the three main oil sands areas in Alberta, Fig. 1 also indicates that Saskatchewan contains potential oil sands.

Fig. 2 shows the ERCB bitumen forecast to 201 8 and Fig. 3 shows the disposition forecast for crude bitumen and bitumen upgraded into a synthetic crude oil.

The report contains the following assessment of bitumen resources in Alberta at yearend 2008 :]

* Initial in place - 1,73 1 billion bbl.

* Initial established - 177 billion bbl.

* Cumulative production - 6.4 billion bbl.

* Remaining established - 170 billion bbl.

* 2008 production - 0.477 billion bbl (1.30 million b/d).