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.

Environmental consequences can arise from industry activities:

  • 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
  • and emissions of various gases that have been identified as contributing to local air quality concerns as well as global climate change.

The environmental implications of industry are regulated by government. For example, oil and gas operations that release water or fluids into the environment must meet high standards established by federal and provincial authorities. The petroleum industry also works closely with government to protect the health and safety of workers and the public.

Flaring and ventingexternal link icon are emissions that are regulated by the Alberta Energy Regulator (AER).

Flaring is the controlled burning of natural gas in the course of routine oil and gas production operations. This 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) which is dispersed in the plume of hot gases from the flare. Albertans who have health or environmental concerns can contact the AERexternal link icon .

Under the Alberta’s Climate Leadership Planexternal link icon  the AER was tasked to support the 45 per cent reduction in methane emissionsexternal link icon from the oil and gas industry by 2025.