What is Oil?

Crude oil is a naturally occurring mixture of hundreds of different hydrocarbon compounds trapped in underground rock. These hydrocarbons were created millions of years ago when ancient marine life or vegetation died and settled on the bottoms of streams, lakes, seas and oceans, forming a thick layer of organic material. Sediment later covered this 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 and 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.

Conventional crude oil is produced by drilling wells. It is differentiated from non-conventional crude oil by the method used for extraction, and by geography. Alberta’s non-conventional crude oil known as oil sands deposits is too thick to flow in its natural state and requires special methods to bring it to the surface; it is also specific to several large areas of northeast Alberta.

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 the rest of Canada or the United States. Of the production that remains in the province, most is converted into transportation fuels at refineries in Alberta. A much smaller proportion is refined into asphalt and other oil products to heat homes and buildings, generate electricity and manufacture lubricants, waxes, plastics, and synthetic rubber.