The Canadian province of Alberta has three main oil sands deposits. These sands contain a tar-like sub­stance called bitumen, a form of petroleum oil, hence their name: oil sands or tar sands. From the bitumen, experts predict 173 billion barrels of oil are economi­cally recoverable with current technology, placing these oil reserves in second place behind those in Saudi Arabia in terms of size. Government experts estimate that someday more than 300 billion barrels could be recoverable, placing the entire size of the deposit near 1.7 trillion barrels. The output from the oil sands has made Canada the number one foreign supplier of oil to the US and has strengthened the economic partnership between these neighboring countries-a relationship in which Canada is the larg­est export market for American goods and services.

Extracting the bitumen from oil sands is a simple process, but it is not easy and it entails several costs. Before any extraction can begin, everything above the sands must be removed. This area is mostly cov­ered by Boreal forests, home to many First Nations communities and natural wildlife. After the bitumen is removed, the rest is sand and a small amount of water. Two tons of sand must be processed to obtain a single barrel of oil. The remaining sand contains traces of bitumen and pollutants and is held in giant tailing ponds that cover over 50 square miles. The process is energy-intensive, requiring natural gas to heat the water used in processing and diesel fuel for the many vehicles used to move the sand to process­ing locations. The overall process produces twice as much greenhouse-gas emissions as the processing of conventional crude.

The issues surrounding the development of Cana­dian oil sands highlight the complexities the world faces as it balances energy production and use, environmental protections, and national securities. Oil sands operators face several challenges in their industry. Environmentalists are particularly keen to pressure oil companies to reduce the environmental impact caused by oil sands operations. Members of First Nations bring the industry to court over concerns about native lands, water rights, and envi­ronmental issues. Various organizations and state governments in the US try to stymie the industry's plans to build pipelines across US soil, because they worry about the damages that leaks might incur on the environment and human health. Foreign govern­ments, in attempts to legislate changes that reduce carbon emissions, try to place limits or restrictions on importation of fuels that originate with oil sands output.

Overall, the market for crude oil is encouraging for investors in Canadian oil sands extraction companies. Other countries are looking to invest in Canadian oil sands production. Canada is under pressure to con­sider how much it will allow foreign states to own part of its natural resources, especially when con­ventional sources of capital are drying up in the US and Europe. Canada struggles to meet its obligations under international environmental treaties without halting the progress of the oil sands industry.

Although the economic recession of the last few years has had a slowing effect, the steady growth in crude oil consumption in countries like Brazil, Russia, India, China, and Southeast Asian countries contin­ues to drive crude oil prices upward. The outlook for the oil sands production is dependent on the length and depth of the current economic recession, how quickly technological advances can be implemented that mitigate environmental damage and improve efficiencies, and the extent that governmental and international policy limit the growth and exporta­tion of the oil sands output.