Global demand for crude oil continues to increase in spite of enormous efforts to develop alternative energies. Global demand is outstripping supply of conventional light crude oil. This trend is irreversible. Consequently, the production, transportation and refining of heavy oil will become increasingly critical.

Global reserves of heavy oil are nearly twice those of conventional light crude. Heavy oil currently accounts for roughly 12% of global production, and the World Energy Outlook 2008 estimates heavy oil production to increase 60% over the next 20 years to nearly 17 million bbl/d. Approximately 80% of the world’s heavy oil reserves are concentrated in the western hemisphere, which accounts for over half of the imported oil to the US. Heavy oil is vital to reducing the US dependence on foreign oil from unstable regions. Canada is the largest source of US oil imports and has oil reserves that rank second only to Saudi Arabia, and is the only non-OPEC jurisdiction that has the ability to significantly increase oil production on a sustainable basis.

Heavy oil is a dense, viscous material that does not flow easily. These crude oils require more energy and capital to produce, transport, and refine. While PetroBeam sees no market opportunity for its technology in the upstream production of heavy oil, the Company expects to improve the capacity, economics, and environmental impact of transporting heavy oil and refining its heaviest fractions by approximately 30%. The Company estimates that its customers could recover the initial investment cost within 12–18 months.