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.

The bitumen is characterized by high densities and very high viscosities. With a density range of 5 to 14 degrees API, bitumen is a thick, black, tar-like substance that pours extremely slowly. When compared to typical crude oils, which contain approximately 14 percent hydrogen, bitumen is deficient in hydrogen. In order to make 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 bitumen to the refineries, it must be blended with a diluent, usually condensate, to meet pipeline specifications for density and viscosity.

Although the existence of the oil sands resource has long been known, the Canadian Energy Research Institute ("CERI") points out that the development of its commercial potential has been gradual and enhanced through efforts of both industry and government. Initial commercial production from the oil sands in Alberta began only in the 1960s. The first two integrated mining projects were Great Canadian Oil Sands Company (now Suncor), which began operations in 1967, and Syncrude, which came on-stream in 1978. High energy prices and significant strides in technology have made Canada's bitumen resources increasingly economic to develop. There are now some 46 existing and proposed oil sands projects, including mining, upgrading and in-situ projects.

Crude bitumen is produced by mining and extraction, in-situ thermal recovery and in-situ non-thermal recovery. At the present time, about 60 percent of crude bitumen is transformed by upgrading into various grades of synthetic crude oil or upgraded products within the Fort McMurray or Edmonton regions.

The Canadian Association of Petroleum Producers