The powerful image of a drilling rig on the prairie is a critical part of Alberta's past, present and future. Developing the province's conventional oil resources has been an important facet of Alberta life since 1914 when the province's first major oil field was discovered at Turner Valley. Alberta was also responsible for a pivotal event in Canada's energy history in 1947 when the drilling of a successful well at Leduc, just south of Edmonton, transformed the nation from oil-poor to oil-rich, overnight.
This development has created an extensive infrastructure that facilitates the continued drive to locate, drill for and transport the oil to market. This infrastructure continues to grow and Alberta's oil industry remains a key component of the provincial economy accounting for thousands of jobs in exploration, production, transportation, refining, distribution, and marketing. Conventional crude oil production was the third-largest source of non-renewable resource revenue for Albertans during the 2007/2008 fiscal year. Overall, it accounted for more than $4.4 billion in royalty payments to the provincial government from 2005 to 2008.
Alberta’s conventional oil deposits also contribute to the Canadian economy. In 2007, conventional crude oil production made up about 28 per cent of Alberta's total crude oil and equivalent production, which is about 21 per cent of Canada's total crude oil and equivalent production.
To ensure that this valuable resource contributes to our province for another 50 years, the Oil Development Business Unit manages the province’s resources by promoting and encouraging exploration and development of reserves, calculating and collecting royalties from producers, and marketing the Crown's share of crude oil production through private sector and in-house marketing agents.
The Unit also supports the development of new technologies for recovering oil and reducing the impact of oil development on our environment. Together with industry, we focus on finding innovative and more efficient ways to extract a higher percentage of crude oil from conventional reservoirs. The limitations of present day technology mean that only an estimated 26 per cent of available oil is currently recovered, leaving 74 per cent of the resource in the ground.
Most of the crude oil produced in Alberta is exported to other markets. The crude oil that remains in the province is refined into transportation fuels and other oil products to heat homes and buildings, generate electricity, and manufacture lubricants, waxes, plastics, synthetic rubber and asphalt.