It has been a long road for oilsands mining operators—more than four decades of moving dirt and making oil, all the time changing the way operations are conducted in an effort to make them more efficient and reliable. Trucks and shovels in northern Alberta currently produce nearly one million barrels of bitumen per day from five projects, a number that is expected to increase to 2.2 million barrels per day by 2045 as more projects and expansions come online. Even considering the growth profile, mines will soon no longer dominate oilsands production as they have historically—the in situ side of the industry is growing, and fast. But while some investment houses seem to favour in situ projects over mining, a recent report from the Canadian Energy Research Institute says that the oilsands is highly profitable for investors and “extremely good” for the provincial and federal governments—mining included.

For 45 years, surface mining has been the dominant force in Canadian oilsands production, yielding nearly five billion barrels of bitumen since commercialization in 1967, according to the Energy Resources Conservation Board (ERCB). Between the 1980s and 2001, in situ production really just trucked along from a couple of projects, but the commercialization of steam assisted gravity drainage (SAGD) changed all that.

Many of today’s giant mining trucks—whether seen in the oilsands or at some remote coal mine in north-central British ColumbiaC—resemble, from a distance, something one might see driving along a conventional highway. They have four wheels and a cab with a motor in front and a payload box in the back. Observed carefully, one may notice a few more steps than usual from curbside to cab, which is situated at about the height of the roof on a two-storey house. Close up, though, these behemoths of the global mining outback seem to have more in common with perhapsmaybe a train locomotive or a jumbo jet.

Rafi Tahmazian takes the same approach to investing in oilsands-related companies as that taken by the entrepreneurs who struck it rich during Yukon’s gold rush days.

Right now, while Canadian producers suffer the results of deep discounts for their crude, refineries in certain areas of the United States are benefiting from the low-cost, “distressed barrels” of Canadian oilsands and North American mid-continent volumes, thanks to a glut of supply stemming from limited market access. The discounts are significant—according to the Eurasia Group, in mid-April West Texas Intermediate (WTI) was trading at a $19-per-barrel discount to Europe’s Brent. Extra-heavy Western Canada Select was trading at $18 less than WTI and $36 less than Brent. WTI-like Edmonton Par barrels were trading at $18 less than WTI. North Dakota sweet from the Bakken and synthetic oilsands crude are also depressed with, at one point, synthetic trading at $10 per barrel less than WTI, even though it is a higher-quality crude.

Many major oilsands projects share the unfortunate pedigree of reaching completion over the scheduled time and way over the projected budget, eroding investor confidence and corporate returns. Historically this has been particularly true for integrated mining and upgrading projects, but steam assisted gravity drainage (SAGD) installations have certainly not been immune.

With natural gas prices floundering at lows not seen in a decade, western Canadian midstream operators are refocusing their efforts to take advantage of a boom in natural gas liquids (NGL) exploration and development in the western reaches of the basin while building out infrastructure to supply oilsands diluent needs.