What is CRUDE oil? Crude oil is also characterized by its density, making it either conventional or unconventional.

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1 What is CRUDE oil? Crude oil is a black, brownish or amber liquid that is a complex mix of hydrocarbons. It consists of carbon, hydrogen, sulphur, nitrogen, oxygen and metals. Crude oil is classified as light, medium, heavy or extra heavy. Heavy oil refers to oil with a thick consistency that does not flow easily, often requiring increased technology to extract. Light oil can flow naturally to the Earth's surface and is generally extracted from the ground using pumpjack technology. Crude oil is also characterized by its density, making it either conventional or unconventional. Crude oil is found in sedimentary rocks formed over millions of years by the accumulation in sedimentary basins in sand, silt and the remains of plants and animals. Canada has seven distinct regions of sedimentary rock: 1. Western Canada Sedimentary Basin 2. Atlantic Margin 3. Arctic Cratonic 4. Arctic Margin 5. Eastern Cratonic 6. Intermontane 7. Pacific Margin

2 conventional vs. unconventional Crude oil is characterized by its density, making it either conventional or unconventional. Conventional crude oil Conventional crude oil is oil that flows naturally or can be pumped to the surface without being heated or diluted. This includes light, medium and heavy forms of oil. Conventional deposits are found between layers of saltwater and raw natural gas. The layer of raw natural gas puts pressure on the crude oil reservoir, causing it to flow out when a well is initially drilled. Unconventional crude oil Crude oil that does not flow or cannot be pumped without being heated or diluted is called unconventional crude oil. Unconventional oil deposits include bitumen and extra heavy oil that is thick, viscous and more difficult to produce than conventional oil. Canada's oil sands are an example of unconventional oil. Crude oil at oil well

3 CRUDE oil & canada Canada is the fifth-largest oil producer in the world and has been producing conventional crude oil for more than a century. Crude oil is one of the most actively traded commodities in the world. Because of this, oil prices change daily in response to changing conditions that affect supply and demand. Canada's oil industry produces more than 3.6 million barrels of oil per day and is part of the global crude oil market. Oil meets close to 40 per cent of Canada's total energy needs though a variety of products created through refining. On average, refining crude oil yields the following range of products: Gasoline to fuel most cars, some trucks, pistondriven aircraft and other machines, such as emergency generators Diesel fuel to fuel some cars, most trucks and buses, railway locomotives, boats and ships and larger electric generators other products including asphalt for road paving and roofing, lubricants such as motor oil and grease, waxes for candles and polishes, and the materials for petrochemicals such as polystyrene and synthetic rubber heavy fuel oil for electric power generation, large ships and some industrial processes light fuel oil for heating homes and buildings, many industrial processes and the fuel for some ships aviation jet fuel for turbine-powered airplanes

4 oil production well production In primary recovery, natural reservoir pressure or simple mechanical pumps - the pumpjack - are used to raise oil to the surface. Most oil wells drilled in Canada today have to be pumped. When a well requires it, a pump is lowered down the tubing to the bottom of the well on a string of steel rods, referred to as the rod string. The rod string is hung from the wellheads and connected to a drive unit and motor on the surface. The rod string conveys power to the pump either by rotating or moving up and down, depending on the type of pump employed. Other types of pumps include the traditional 'iron horse' pumpjack, submersible pumps, and progressive cavity pumps. offshore Oil pumpjack Heavy oil and bitumen are used to make the same petroleum products as conventional forms of crude oil, but require more processing. Crude oil production is more complicated than natural gas production, since crude oil has larger molecules and moves through rocks less easily. Conventional crude oil wells are those that can produce oil using either the pressure of the reservoir itself or with the addition of pumping. Atlantic Canada is currently the only region producing oil offshore. However, there is significant resource potential in Canada's Arctic and several companies currently hold exploration licences in the region. Atlantic Canada's offshore exploration, development and production industry is thriving with five producing projects, one development project, and major exploration programs planned for the coming years. Offshore oil rig near Halifax, Nova Scotia Oil 101 Kitselas Community Meeting December 10, 2015 Info Source: Dean Monterey, Global Incident Command Solutions, Inc

5 oil processing Before petroleum resources can be transported to refineries, where they are turned into the products we use, they must be processed to separate the usable commodities from the unique crude oil mix. About two-thirds of Canada's conventional petroleum production doesn't require extensive processing before being shipped by pipeline. Removing impurities and other undesired substances is an essential operation before any type of crude reaches a refinery. The methods used depend on whether the oil is conventional or unconventional. Conventional crude oil is initially processed at field facilities called batteries. Inside a battery is one or more tanks in which saltwater and sand sink to the bottom, and natural gas bubbles off the top. Clean oil collects in the middle. The water is reinjected into the producing formation to help main reservoir pressure and the sand is collected for disposal. Once processed, the oil is transported by pipelines from the production facility to refineries where it is upgraded into products like gasoline, heating oil and jet fuel. Offshore Newfoundland and Labrador transport crude oil to markets by tanker. Oil batteries where the initial processing of crude oil takes place.

6 oil refineries in canada Currently 12 companies refineries in Canada. operate Only Imperial Oil, Shell and PetroCanada operate more than one refinery and market products nationally. Other refiners generally operate a single refinery and market product in a particular region. These regional refiners include North Atlantic Refining, Irving Oil and Ultramar in the east, Suncor in Ontario and Federated Coop, Husky and Chevron in the west. Of the 19 refineries in Canada, 16 manufacture the full range of petroleum products. Husky's facility in Lloydminster, Alberta, and the Moose Jaw Asphalt plant in Moose Jaw, Saskatchewan, are primarily asphalt plants with limited production of other products. Oil Refinery Photos Above: Edmonton, Alberta The Nova Chemicals facility in Sarnia, Ontario, is a petrochemical plant that also produces some distillate products. Right: Sarnia, Ontario Below: Vancouver, British Columbia There is also a small refinery in Bowden, Alberta, owned by Parkland Industries that is currently shutdown. There are three main refining centres in Canada (Edmonton, Sarnia and Montreal), but most provinces have at least one refinery. Manitoba and Prince Edward Island are the only provinces with no refining capacity, and there are no refineries in the territories. Edmonton refineries provide about 50-60% of the petroleum product needs in the Vancouver market. The rest of the Vancouver area is supplied either by the Chevron refinery in Vancouver, or with product imports from the U.S. Oil 101 Kitselas Community Meeting December 10, 2015 Info Source: Dean Monterey, Global Incident Command Solutions, Inc

7 transportation of oil Pipeline Liquids pipelines are used to transport crude oil or natural gas liquids from producing fields to refineries, where they are turned into gasoline, diesel and other petroleum products. Some liquids pipelines are also used to transport these finished petroleum products from refineries to terminals and distribution centres in or nearby large population centres. Rail Today, rail moves about 280,000 barrels/day, almost eight per cent of Western Canada s oil production a significant increase over past years. Rail loading capacity in Western Canada was forecast to be about 965,000 barrels/day by year end Amid a North American energy boom and a lack of pipeline capacity, crude oil shipping on rail is suddenly increasing. The trains are getting bigger and towing more and more tanker cars. Truck There is some oil moved by truck, however the vast majority are refined petroleum products that we see delivered in our communities every day. Marine At present, fewer than 500 oil tankers transit along Canada's West coast each year. While most West coast oil tankers are U.S.-bound, about 200 call on Port Metro Vancouver. There hasn't been a tanker issue in the Port of Vancouver for 50 years. (Source: IHS CERA 2013) Asia's fast-growing economies require new sources of energy and Asian markets are an 8- to 11-day sail from proposed liquefied natural gas (LNG) terminals on Canada's West Coast - two days closer than most of our international competitors. Oil 101 Kitselas Community Meeting December 10, 2015 Info Source: Dean Monterey, Global Incident Command Solutions, Inc