sustainable development of oil...

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

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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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180

1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017

$ (C

A M

illio

ns)

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5000

Mill

ion

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rels

.

Increasing Reserves Through Technology

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1,000

1,200

1,400

1,600

1,800

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ions

of b

arre

ls o

f bitu

men

Remaining indevelopedprojects

11174

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Remainingestablished

reserves

Current technologies:mining, SAGD, cold production



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reserves

Total ultimatepotential

Next generation technologies:improved mining, hybrid SAGD,

cyclic solvent extraction


11174

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1,699

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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.

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