Oil sands are a mixture of sand, clay, water, and bitumen that occur naturally. Bitumen is the fossil fuel component of this sand, and it is a very viscous oil that must be treated and upgraded before it can be used to produce useful fuels such as gasoline.
Oil sand deposits are found around the globe in the Middle East, Venezuela, Canada, the United States, and Russia.  The largest deposit in Canada (and potentially the world) is the Athabasca deposit in Northern Alberta, Canada. It is the most developed deposit in the world, meaning that it has the most established and ongoing mining of any oil sands deposits.
Like crude oil, the bitumen that exists in the oil sands began as living, organic material. It is speculated that the oil sands formed as a result of ancient oceans that existed millions of years ago, covering the areas where the oil sands exist today. As the microscopic marine life within the oceans died, they decomposed with the help of bacteria. The bacteria removed the oxygen and nitrogen, leaving mainly hydrogen and carbon. Heat and pressure then resulted in the layering of rock, silt, and sand over time and "cooked" the dead organic material for millions of years at temperatures between 50 and 150°C. This formation of oil is similar to that of other deposits of lighter oils except that the lighter hydrocarbon fractions may have been lost during migration and/or the heavy oil is the component that remained following bacterial degradation. All oil sands deposits have in common that they are located at- or relatively close to the surface, clearly connected to near-surface fresh waters that could have supplied the required microbes. The first of these theories is that the oil sands began as a vast reserve of crude oil, and over long periods of time the lighter crude oil escaped or was microbiologically destroyed, leaving behind bitumen. The second theory is that bitumen was formed immediately in a process similar to the formation of oil shale. In this theory, bitumen was released from shales with a large amount of organic matter (kerogen rich shales) instead of crude oil being released.
There are three terms that are generally used for oil sands deposits: oil sands, tar sands, and bituminous sands. Oils sands is the most widely used term, the term tar sands is often used by people who wish to make a statement about the negative environmental impacts of oil sands. The term bituminous sands would be the most accurate term to use, since it is composed of bitumen and sand rather than tar or oil. The bitumen content in these deposits varies from 1-18%. In the mid-1990s the Canadian oil industry and government decided that term "oil sands" should be used going forward. Historically, oil sands were referred to as tar sands largely due to their (ineffective) use as a roofing and paving tar. Over time this term was phased out as tar is vastly different from oil. Tar is a synthetically produced product created from coal, wood, petroleum, or peat through a distillation process whereas oil is a naturally occurring petrochemical that can be upgraded into petroleum products.
Oil sands have to go through several steps before it can be turned into more useful products (Figure 3). First it has to be extracted: mined, mechanically processed, and chemically processed. It can then be upgraded, refined, and turned into the final products. On average, it takes 2 tonnes of mined oil sand to produce a single barrel of synthetic crude oil. Depending on whether or not the deposit is located close to the surface, it can be retrieved either by surface mining or using in situ mining techniques (Figure 4). After extraction, the sand must be processed and the bitumen upgraded. Since bitumen is thick and has a deficiency of hydrogen upon extraction, it must be upgraded to remove carbon or add hydrogen to obtain a balanced hydrocarbon that is more economically valuable.
Some reserves are shallow enough to be surface mined, which simply means that earth-moving equipment can be utilized to dig out the oil sand for processing. Resources recoverable by this type of extraction are estimated to be 65 billion barrels. These deposits are usually have to be within 75 meters of the surface to be mined in this fashion. Currently, around 500 square kilometers of the oil sands deposit in Northern Alberta is undergoing surface mining, which is only 3% of total oil sands.
To excavate the oil sand, large shovels are used to dig out the oil sands and deposit it in the back of haul trucks. The trucks transport the oil sands to mechanical processors, which include things like rock crushers and sorting mechanisms. Crushers break up large chunks of rock and sorters process the crushed rock, sending any pieces still too large back through the crusher. The crushed material is then sent for chemical processing. The oil sand is immersed in a mix of hot water and a caustic diluting chemical. This forces the bitumen to separate from the sand. The non-bitumen component that remains is composed of sand, water, fine clays, and minerals. These leftover components are known as tailings and are sent to tailings ponds to allow the sand to settle out. The separated, diluted bitumen is then be sent to upgrading to be turned into more useful products.
In-situ simply means below ground deposits, which make up 80% of Canada's oil sands. These deposits are buried more deeply then 75 meters, which makes traditional mining from the surface impossible. Most of these deposits are buried more than 350-600 meters below ground. There are a variety of specific methods used to extract resources from in-situ deposits.
The two most common methods used in in-situ recovery are steam assisted gravity drainage and cyclic steam stimulation. In both of these methods steam, solvents, or heat cause the bitumen to become fluid enough that it can be pumped out of the well. One benefit of this model of extraction is that tailings ponds are not a necessity as sand remains in the ground, which means that less water is used to create the oil. One barrel of crude oil in its synthetic form only requires half a barrel of water. New techniques such as pulse technology and vapour recover extraction are currently being tested.
One of the biggest issues with the development of oil sands is the environmental impacts associated with the extraction, processing, and upgrading of the bitumen. Some of the concerns include: