To your amazement, most of the world's oil might indeed be right next door in Canada.

The minimum estimate of the amount of oil is around 1.6 trillion at minimum. That accounts for more than all crude oil all over the planet. Who would have thought North America has more oil then the middle east?
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Leonard puts Russian reserves at around 100 billion barrels. Other experts say the companies haven't explored enough to know. Either way, even Russia has its limits, as Leonard acknowledges. He thinks Russia's oil output will crest in 10 to 15 years, putting OPEC firmly in control of prices again. "Around the middle of the next decade, the price of oil is going to go up and stay up," he says. If it does, an unusual kind of oil that exists far from the Middle East will become more alluring. You can get a glimpse of it just north of Fort McMurray, a former fur-trading outpost in the Canadian province of Alberta. Just where the highway crosses the Athabasca River, veins of black, tarry sand streak the riverbanks. On a hot day tar sand is sticky and smells like fresh asphalt—the smell of money the locals call it. No wonder they're smug. The tar-sand deposits here and elsewhere in Alberta hold the equivalent of more than 1.6 trillion barrels of oil—an amount that may exceed the world's remaining reserves of ordinary crude. But this is no ordinary crude. In fact, it's a residue created when conventional oil escaped from its birthplace deep in the Earth's crust and was degraded into tar by groundwater and bacteria. Most of the tar sand lies too deep or in deposits too sparse to be exploited. But oil-sand companies got a boost in the 1990s as technology improved and Canada cut the first few years of the royalties that companies were required to pay. The Alberta government reckons that 174 billion barrels could now be tapped economically. Last year the U.S. Department of Energy agreed and included that number in Canada's proven reserves. The move catapulted Canada to second place in the ranking of oil-rich states, right behind Saudi Arabia—and ahead of Iraq, Iran, and Kuwait. But standing at the edge of a 200-foot-deep (60-meter-deep) pit where giant electric- and diesel-powered shovels devour beds of oil sand, Shell Canada Senior Vice President Neil Camarta acknowledges that there's a big difference between the oil-sand riches and free-flowing crude. "It's not like the oil in Saudi Arabia. You see all the work we have to do; it doesn't just jump out of the ground." Shell's is one of three big operations that together wring more than 600,000 barrels of oil a day from the Athabasca sands. Every step of the way takes brute force. The sand has to be strip-mined, two tons of it for each barrel of oil. Dump trucks the size of mini-mansions haul 400 tons in a single load, in beds heated during the subarctic winters so the sand doesn't freeze into a giant blob. Next to the mine, the sand goes into the equivalent of giant washing machines, where torrents of warm water and solvent rinse out the tar, or bitumen, leaving wet sand that is dumped in tailing ponds. Even then the bitumen is not ready to be piped off to a refinery like ordinary crude. To turn it back into crude oil, the operations either cook it in cokers, where temperatures of 900°F (500°C) break up the giant tar molecules, or heat it to lower temperatures and churn it with hydrogen gas and a catalyst. The result is a clean, low-sulfur crude—"beautiful stuff," says Camarta. But producing it is not so pretty, he acknowledges. "This really is a big, big project," Camarta says of Shell's four-billion-dollar mine and plant, which opened last year. "It has a big footprint too, and we don't hide that—a big environmental and a big social imprint."

Matthew Meadows