Western Oil Sands Workshop
Sustainable Development of Oil SandsChallenges in Recovery and Use
September 2006John R. McDougall
Outline
• Oil Sands in Context• Production Technology• Implications for GHG production• Nature and scale of GHG
challenges• Opportunities and technologies
for mitigating impacts• ARC R&D initiatives• Conclusions
Role of Oil Sands
• Alberta’s oil sands are the world’s largest hydrocarbon resource – 315 b bbls proven, 2.5 t bbls potential
• Alberta oil sands production will rise to between 3 and 5 m bpd over next 2 decades
• Bitumen production more energy intensive than conventional oil
• Challenge is “sustainable”development
0
100
200
300
400
Conventional
Heavy Oil
Bitumen
Canada World
(billion m3)
Major Heavy Oil and Oil Sand Deposits in Canada
EdmontonCold Lake
Regina
Athabasca
Peace River
Calgary
Bitumen
Heavy Oil
Lloydminster
Alberta Saskatchewan
1,369 billion bbls129 billion bbls
201 billion bbls
24 billion bbls
Initial in-place volumesAlberta data from AEUB
Resources
• Accessible resources (642 billion)– Mineable - 59 billion– Primary cold production – 150 billion– In-Situ – 433 billion
• Inaccessible resources (1053 billion)– In between (shallow or thin) – 103
billion– Carbonate – 447 billion– Others – 503 billion
Public R&D Stimulated Production
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20
40
60
80
100
120
140
160
180
1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017
$ (C
A M
illio
ns)
.
0
500
1000
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3500
4000
4500
5000
Mill
ion
Bar
rels
.
Increasing Reserves Through Technology
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0
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400
600
800
1,000
1,200
1,400
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ions
of b
arre
ls o
f bitu
men
Remaining indevelopedprojects
11174
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ions
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arre
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Remaining indevelopedprojects
Remainingestablished
reserves
Current technologies:mining, SAGD, cold production
Increasing Reserves Through Technology
Increasing Reserves Through Technology
11174
315
0
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1,800
Bill
ions
of b
arre
ls o
f bitu
men
Remaining indevelopedprojects
Remainingestablished
reserves
Total ultimatepotential
Next generation technologies:improved mining, hybrid SAGD,
cyclic solvent extraction
Increasing Reserves Through Technology
11174
315
1,699
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Bill
ions
of b
arre
ls o
f bitu
men
Remaining indevelopedprojects
Remainingestablished
reserves
Total ultimatepotential
Initial volumein place
Reduce the gap!Ongoing technology
development
Current and Future Oil Sands Production
• Mining– Current 600,000 bpd– Future 1,500,000 bpd
• In-Situ– Current 400,000 bpd– Future 3,500,000 bpd
Production Methods
• Surface Mining• In-Situ
– Thermal• Steam Assisted Gravity
Drainage– Solvent
• VAPEX – Solvent thermal
• ES-SAGD– Combustion
• In between?
Thermal
Cold Solvent
Mining Projects
• Production Technology– Mining - Truck and shovel– Bitumen extraction
• Sources of GHG– Mining equipment– Tailings ponds– Power
• GHG Production– 40 kg CO2 e/bbl
Bitumen Extraction Process
Rejects
Oil Sand Feed
Semi-MobileCrusher
Rotary Breaker
Pipeline conditioning
Chemicals(as req’d)
Air
FrothStorage
Bitumen Froth
Steam
Air/Gas
Tailings Settling Pond
RecycleWater
Coarse Tailings
Thickened FineTailings
Thickener
RecycleWater
Flocculants
Froth Treatment Tailings
Primary SeparationCell
Flotation Cells
OversizeScreen
Rejects
Oil Sand Feed
Semi-MobileCrusher
Rotary Breaker
Hot Water
Pipeline conditioning
Chemicals(as req’d)
Air
FrothStorage
Bitumen Froth
Steam
Air/Gas
Tailings Settling Pond
RecycleWater
Coarse Tailings
Thickened FineTailings
Thickener
RecycleWater
Flocculants
Froth Treatment Tailings
Primary SeparationCell
Flotation Cells
OversizeScreen
Mining Based Opportunities
• Challenges – Cost of operations, maintenance– Overall recovery– Quality of extracted bitumen &
market acceptability– Water use– Energy use & NG dependence– Air Emissions– Environmental footprint
• Continuous Improvement– Purpose designed equipment– Materials handling– Decision support systems– Sensors / real time control– Improved materials– Maintenance procedures– Improved machine health
monitoring systems
• Step Out Technologies– Tailings technology– Dry tailings– Mobile conditioning equipment– Mining equipment design for
improved extraction– Borehole technology for
intermediate reserves– ‘At face’ continuous mining
In Situ Projects
• Production Technology– Primary– Steam injection– Cyclic steam – “Huff and Puff”– SAGD– Enhanced SAGD – “Vapex”
• Sources of GHG– Production of thermal energy– Power – pumping and processing
• GHG Production– 65 – 80 kg CO2 E / bbl
Steam Assisted Gravity Drainage (SAGD)
• Horizontal well pair near bottom of pay• Upper injector / lower producer• Steam chamber grows upward and then sideways.• Expected recovery 60 – 70 % of OBIP
Hybrid SAGD–Solvent Processes
• Improving oil production rates and recovery over SAGD– increase of 20 – 30 %
• Reducing energy and water requirements• Reducing greenhouse gas emissions• Improving overall economics
oil & condensatelayer
steamcondensed solvent vaporized solvent(re-fluxed)
In Situ BasedOpportunities
• Challenges:– Markets for product– Energy use & natural
gas dependence– Diluent for transport– Overall recovery– Water conservation– Air Emissions– Environmental footprint
• Continuous Improvement:– Energy …lower steam/oil ratios– Alternative Energy – Solvent assisted recovery– Reliable down hole pumps– Multi-phase flow measurement– Water reuse– Reservoir simulators– Drilling technology– Gas-over-bitumen reserves– Shallower/ more marginal resources
• Step Out Technologies:– In-Situ combustion and/or
gasification– In-Situ catalytic processes– Electric induction heating– Microwave heating– Microbial action
Upgrading
• Diluent for shipment ex Alberta
• Integrated Plants• Stand-alone upgraders• Sources of GHG
– Hydrogen production– Power
• GHG production– 75 – 90 kg CO2 E / bbl
Energy for Oil Sands• 30% of barrel used to mine
and upgrade bitumen• Natural gas for:
– steam– hydrogen– electricity
• Energy demand higher for in-situ (17% of bbl for SAGD vs. 4% for mining)
• Electricity a relatively low portion of energy requirement
1000
250
400
25080
In Situ
Mining
Upgrader Hydrogen - Today
Added Future Upgrader Hydrogen
Upgrader Fuel (assumes no coke burning)
Current Oil Sands Natural Gas Demand (scf/barrel)
Technology Opportunities
• Reduce natural gas use– More efficient H2 production and use– Poly-generation
• Gasify bitumen residue– Produce steam, electricity, hydrogen and CO2
• Reduce emissions– GHG to produce value-added products– SO2 to produce construction materials, fertilizer
• Reduce coal transportation cost
Reducing Natural Gas Use
Energy Source– Natural Gas– Coal– Bitumen– Residues– Uranium– Geothermal (HDR)
Conversion SystemAdvanced SMRConventional combustionCirculating fluidized bedGasificationNuclear/steam/electrolysisSteam
Natural Resources Processes Market
Polygeneration
Fuels
Chemicals
Hydrogen
Electricity
SNG
Carbon Dioxide
Coal
Coke
Bitumen
Biomass
Carbon to Synthesis gas (gasification)
Gas to liquids (FT)
Gas applications
Other Processes (EOR/ECBM)
Integrating Gasification
Reducing Air Emissions
• Switch to fuels with reduced impact– SO2, NOX, particulate, metals (Hg)
• local energy resource alternatives to natural gas are high sulphur
– GHG emissions• Methane• CO2
SO2 Control
• Current SO2 control (limestone scrubbers) produces low value by-products or waste
• Syncrude NH3 scrubber (2006)– Marsulex proprietary ammonia sulfate
scrubbing technology– Uses waste NH3 from upgrading– 95% SO2 capture– Product is high quality granular ammonium
sulphate fertilizer
Greenhouse Gases
• CO2 equivalent – sum of:– Carbon Dioxide - CO2
– Methane – CH4
– Nitrous Oxide – N2O
“Proof of Global Warming”
GHG Challenges
• Oil sands GHG emissions / bbl much higher than conventional
• At 5 mbpd, CO2 equivalent (based on today’s technologies and estimates) would be 145 Mt/y – 10% more than total Alberta emissions in 1990
• Fugitive emissions are estimated today and are likely understated by a significant amount (DIAL)
GHG Reduction Opportunities• CO2 capture and sequestration
– EOR, CBM• Syngas production with CO2 capture
– Bitumen, coke or coal• Reduced energy intensity
– Chemical (Vapex), biological• Cleaner sources of steam and power
– Nuclear, electric drive trucks• CO2 conversion• Operational efficiency
ARC GHG R&D Activities
• Energy efficiency– production and processing technology
• EOR– CO2 injection
• CO2– capture, transport and storage
• Emission measurement– DIAL
• Gasification– bitumen, coal
• CBM– CO2 enhanced CBM
Research Partners for Carbon Management• Alberta Geologic Survey
– Geological and hydro-geological characterization
• University of Alberta– Rock physics, well-bore integrity
• University of Calgary– Geophysical monitoring
• CANMET– Oxy-fuel, gasification technologies
ARC works with research and industry partners to provide an integrated systems perspective for carbon management activities
Carbon and Energy Management• Focus on energy,
environment and climate change
• Programs:– Geological Storage
• Modelling, Economics, Monitoring, Measurement and Verification
• ECBM, EGR, EOR ++– Clean Energy
• Gasification, Fuel Alternatives, Modelling, Process, Emissions
– Unconventional Natural Gas
Coal Mine
Gas Reservoir
Coalbed Methane
Reservoir
Coal Mine
Oil Reservoir
Gas Reservoir
Saline Aquifer
CO2 pipeline
natural gas pipeline
oil pipeline
Geologic Carbon Sequestration
CO2 for:Enhanced Oil
RecoveryEnhanced Coalbed
Methane RecoveryEnhanced Gas
RecoveryAcid Gas InjectionDeep Disposal
ARC is undertaking research in all these areas
Why Geological Storage?• Reduction of GHG Emissions
– CO2 by far the largest– Kyoto / Framework Convention– Strong forecasted emissions growth
• Oilsands• Coal-fired electricity
• Economic Potential– Enhanced oil recovery– Enhanced coalbed methane recovery– Enhanced gas recovery– Cost avoidance (CO2/tonne)
Potential CO2Hubs
Current CO2 Storage Projects• Assessment of CO2 Monitoring
potential at Alberta’s Four Experimental CO2 EOR Pilots
• Monitoring at most suitable site (Penn West Pembina Cardium)
• Monitoring pilot jointly by Alberta Government and Federal Government
• Multi-agency research (U of A, U of C, AEUB/AGS)
Integrated bio-reactor and bio-gas generator
HydrogenMethane
Bio-fuels
Bio-prods
Carbonates
N, P, H2O
FertilizersAnimal feedsBiopolymers
Fertilizer
Natural Health ProdsChemicals
CO2
Recover Minerals from Tailings
• Creates a new industry• Converts oil sands tailings
into valuable heavy minerals (approx. 400 kT/yr)
• No additional mining, disposal or reclamation
• Potential for added recovery of bitumen, naptha and other minerals products.
Courtesy: Titanium Corporation
Water
• Government of Alberta:– “Water for Life Strategy”
• Water management planning and conservation
• Industry: – trends to use brackish water in place of fresh
water– must continue to strive for minimum water use
and maximum reuse• New technologies in mining, extraction,
tailings management and in-situ recovery processes
Oil Sands Reclamation• Challenge
– Develop reclamation procedures that ensure achieving a sustainable boreal landscape
• Research and Monitoring (35 years)– What soil materials should be
salvaged• Long-term monitoring (15
years):– Reconstructed soils compare
favourably with undisturbed soils
• Revegetation practices highly successful
Oil Sands Reclamation
1997 2004
Oil Sands: Improved EfficiencyOLD
Conveyor & Tumblers (80°C)
Vertical Wells
Dragline & Bucketwheel
Coal firedPower Plant
NEW
SAGD Horizontal Wells
Truck & Shovel
Low Energy Extraction25 - 50° C
Hydrotransport
Co-Gen Power Plants
Energy Energy EfficiencyEfficiency
45% 45% Reduction in Reduction in
C0C02 2 per per barrelbarrel
(2008 (2008 vsvs 1990 1990 technology)technology)
Future?
Hybrid Solvent
Combine
Lower Energy ExtractionHydrotransport
Polygeneration
Oil Sands: Future
• Near zero emissions of sulphur, nitrogen oxides, particulates, mercury, trace elements and organics
• 40-50% reduction in CO2emissions by efficiency improvements, near 100% reduction with carbon management and storage
• Minimal/Zero water contamination and removal from the natural cycles
• Maximized solid waste usage and value added products
• Full and effective site remediation & reclamation
• Low thermal signatures
Summary• Technology development and adoption increased the
economic viability of oil sands development.• Some technology can be sourced from elsewhere• Other technologies are under development and nearly
ready for demonstration stage.• Long-term vision and commitment is required to
balance short term problem solving and longer-term strategic agendas.
• Concentrated sources of GHG emissions create opportunities. Technology and infrastructure required to take advantage of them.
• Appropriate public policy environment is needed to support strategic agenda and encourage application and commercial deployment (eg. AOSTRA).
• With such an approach, the future is bright and long-term “sustainable oil sand development will proceed.