Crude oil

Crude oil is a naturally occurring mixture of hundreds of different hydrocarbon compounds trapped in underground rock. Millions of years ago, ancient marine life and vegetation died and settled on the bottoms of streams, lakes, seas and oceans, forming a thick layer of organic material. A sediment later covered the organic layer, applying heat and pressure that ‘cooked’ the organic material and changed it into the petroleum we extract from the ground today.

In Canada, the term ‘conventional crude oil’ usually refers to light, medium, heavy and ultra heavy hydrocarbons like those produced from the Western Canadian Sedimentary Basin, an area that includes Alberta and is the traditional source for most Canadian oil production.

Crude oil is a mixture of hydrocarbons that exists in liquid phase in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities. The sulphur content determines if it is "sweet" (low) or "sour" (high).

Conventional crude oil is produced by drilling wells. Alberta’s non-conventional crude oil, known as oil sands, is too thick to flow in its natural state and requires special extraction methods. Learn more in oil sands 101.

Crude oils are generally differentiated by the size of the hydrogen-rich hydrocarbon molecules they contain. For example, light oil flows easily through wells and pipelines and, when refined, produces a large quantity of transportation fuels such as gasoline, diesel and jet fuel. Heavy oil, by comparison, requires additional pumping or dilution to flow through wells and pipelines; when refined, it produces proportionally more heating oil and a smaller amount of transportation fuels.


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.

Alberta is the largest contributor to Canadian oil and equivalent production. Increases in horizontal drilling activity and multistage hydraulic fracturing technologies have increased production.

Oil royalty operations

Alberta Energy 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. To learn more about reserves see the AER ST-98 report or see oil prices and value for marketing information.

Alberta Energy administers royalty programs and data for 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.


Some environmental consequences of natural resource development:

  • disturbances to land and ecosystems associated with oil extraction
  • construction and operation of associated facilities
  • other examples can include spills, containment of tailings from oil sands mining
  • emissions of various gases that have been identified as contributing to local air quality concerns as well as global climate change

Government (federal and provincial authorities) regulate industry, high standards are set to minimize environmental impacts. The petroleum industry also works closely with government to protect the health and safety of workers and the public.

The Alberta Energy Regulator (AER) regulates Flaring and venting emissions.

Flaring is the controlled burning of natural gas in the course of routine oil and gas production operations. The burning occurs at the end of a flare stack or boom.

Venting is the controlled release of gases into the atmosphere in the course of oil and gas production operations. These gases might be natural gas or other hydrocarbon vapours, water vapour, and other gases, such as carbon dioxide, separated in the processing of oil or natural gas.

Flaring may occur to dispose of unwanted or unusable volumes of gas, to depressure gas-processing equipment for maintenance, and to protect people and the environment during emergencies. Flaring is an important safety procedure, especially at facilities that handle sour gas.

The hydrogen sulphide (H2S) in sour gas is toxic and heavier than air; if not flared, it could pose a hazard to workers and neighbours. Flaring converts the H2S into less toxic sulphur dioxide (SO2) gas which can be safely dispersed in the flare.

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