Here is a little primer on tar sands (or oil sands) and its future in Canada and the U.S.
In 2007 the state legislature of Connecticut, which like most of the northeast relies on oil for residential hearing, wanted information on the future of oil and what it would mean for their state.
The report to the legislature makes it abundantly clear to everyone in Connecticut and in the U.S. that oil is going to be ever more expensive, that Canada will not continue to sell as much to the U.S. as it would like, and that unless the U.S. (and Canada) plan to be very cold in future, it would be very smart to plan for some other fuel source.
Some experts think that much of our energy needs could be provided by wind power. Other experts believe solar power could save the day. Others count on a wide variety of silver bullets. Whatever the source(s), very soon they will be as cheap as oil, because today's oil is much different from yesterday's.
From "Peak Oil Production and the Implications to the State of Connecticut.
Report to Legislative Leaders and the Governor. Addendum: Tar Sands and Shale Oil"
Tar sands or oil sands are common names for sediments containing bitumen. Bitumen is very viscous black oil that does not flow and can not be pumped without being heated and diluted. Tar sands are a mixture of clay, water, sand and bitumen. Oil quality is rated on the American Petroleum Institute’s (API) scale and formula. Light oil is rated between 800 and 870 and has a degree range between 45.4 to 31.1. Light oil is free flowing and can be pumped and transported by pipeline; it is generally of greater purity and needs less refining. Heavy oil ranges from 21.5 to 10 degrees and extra heavy oil from 10 to 0.1 degrees. Bitumen mined in the Athabasca deposit in Alberta Canada, the largest such concentration in the world, is about 8 degrees.
The oil sand product must be heated and diluted, then be upgraded through an energy intensive process that adds hydrocarbons to the bitumen so it can flow. At room temperature bitumen is akin to cold molasses.
When evaluating oil sands and other alternative fuels, it is important to understand that it takes energy to get energy – there is still no free lunch. If you invest a unit of energy to produce energy, a key question is how much do you get back for that effort? The term Energy Returned on Energy Invested captures that concept and is expressed as EROEI. Because oil is so incredibly dense in energy—lots of energy per unit of weight and volume—the historic return on energy invested was very good. This made oil-based energy dirt cheap. Our economy was built on, and relies on today, the inefficient consumption of cheap energy that has a very high EROEI.
Researchers from Boston University state that, during the 1930s, Texas oil had an EROEI of 100 to 1; for every barrel consumed in the extraction process, 100 were returned. By the 1970s, US oil had an EROEI of 30 to 1 and today it is 15 to 1.
It’s clear that the easy oil was extracted in the early years and that the more difficult oil requiring deeper wells and more energy in harsher environments has lowered the energy returned on energy invested.
Oil sands used to produce bitumen have an EROEI of about 3 to 1. That is, it takes the equivalent of one barrel of oil to produce 3 barrels of oil bitumen from Oil sands.
Canadian oil sands can contain up to 12% oil. This means that 88% of the material excavated must be moved, processed and returned to the pit for land reclamation. It takes approximately 2 tons of material to produce 1 barrel of oil. Canada currently supplies the United States with about 18% of our oil, making it our largest source of imports.
Using current technologies the Athabasca River has inadequate flows for large scale expansion of oils sands processing. While water recycling is currently used in the processing, one to two barrels of make-up- water is required for each barrel of oil.
One [settlement, or tailing] pond being used by Syncrude is 14 miles in circumference and contains 130 feet of contaminated sediments and water. The waters are highly contaminated with various metals and compounds and will be an environmental liability for generations to come.
Eventually, the expansion of the Canadian oils sands will be limited by natural gas supply [used in oil sands extraction]. Current supplies of natural gas can not provide the energy needed for the planned vast expansion of oil sands exploitation unless Canada cuts back on the 50% of its natural gas production that is presently exported to the US. In fact, Canada’s National Energy Board recently announced that a 30% cut in exports of natural gas to the U.S. will most likely occur between now  and 2015.
Large amounts of diluent are needed to transport bitumen through pipe lines due to its viscous state. Bitumen requires a one-third blend of condensates from natural gas. Since natural gas is declining in production in North America, the future supply of condensate is unknown. This condensate liquid is light enough to dilute the Bitumen and cause it to flow. The availability of natural gas condensate for any massive expansion of bitumen from oil sands is highly speculative.
The price of the enormous amounts of material—steel, mega-trucks, excavators, piping, etc.—required by the oil sands projects is shooting up, in part thanks to booming demand for such materials in rapidly-developing China.
Oil sands will play an important role in providing offsets to conventional oil but can not replace the declining conventional oil production. Bitumen production will merely cushion the upcoming energy transition to different energy consumption patterns and infrastructure realities. Additionally, we can expect the cost of production to rise as energy feedstocks contract.
Canada and the US have good relationships. The US is Canada’s largest trading partner and this will likely continue into the foreseeable future. However, Canada has responsibilities to its own citizenry as seen in recent projected cut of natural gas exports. We can not reasonably expect Canada to export ever-increasing fuels to the detriment of its own people.