Oil sands development needs natural gas.

Turning oil sands into oil requires a lot of natural gas and there's some debate about where this is going to come from.

I believe that they use natural gas both at the front end and the back end in this process. In the front end, they use natural gas to cook the oil sands, and in the back end, they use it to upgrade the heavy crude end product with more hydrogen molecules to make it lighter and more desirable. They refer to it as 'light synthetic' in the end.

Among other interesting quotes from this article:

"By far the most important thing for North America are those oil sands in Canada," said Robert Esser, director of oil and gas resources at Cambridge Energy Research Associates in New York. "It's nice we're going to have access to (the Alaska refuge), but there are a lot of unknown questions there. We have no idea whether there is oil or gas or how much. In the oil sands, we know the reserves are huge, much larger than in Alaska."

"Imagine Saudi-type production levels just north of the U.S. border in a friendly country," said Roland George, an Alberta analyst with Purvin & Gertz, an oil industry consulting firm in Houston.

But environmentalists say the process of burning large amounts of energy just to get more energy is reckless. "The oil sands are the world's dirtiest source of oil," said Stephen Hazell, director of the Sierra Club of Canada's campaign against the Mackenzie pipeline.
[He's right.]

Although U.S. officials hope the output from Alberta's oil sands will be exported mainly south of the border, Chinese officials are trying to lock up long-term contracts for oil that would be sent through a proposed pipeline to the coast at British Columbia and then exported via tanker to China.

"There have been Chinese delegations in every skyscraper in Calgary," said George, the analyst.

"The Chinese are doing what the United States is doing, scouring the planet for every molecule of oil production they can get their hands on."

Many Washington conservatives are seeing red. "It's definitely a big worry for the Chinese to be trying to monopolize the oil sands," said Frank Gaffney, president of the Center for Security Policy in Washington.

"We're in a race for energy supplies, and we can't allow China to win this one."