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Oil Sands of Canada

400 ton 797B Caterpillar trucks carry raw ore from the mine to the crusher, 24 hours a day, 365 days a year at Muskeg River mine.

Dr John Barry (Shell Exploration and Production) describes the huge potential of a major hydrocarbon resource, the subject of his Geological Society Public Lecture Series talk last month.

Geoscientist 18.5 May 2008

Canada’s oil sands are a vast energy resource, containing perhaps as much producible hydrocarbons as Saudi Arabia. Unlike the latter, these massive resources are not amenable to conventional methods of oil and gas production. Closing the gap between the two is likely to form a major plank of maintaining diversity of supply in coming decades, as the share of non-OPEC sources of hydrocarbons enters a period of decline.

The continuing growth in global hydrocarbon demand has seen a step change in recent activity to turn oil sand resources into marketable fuel products. Production reached 1.1 million barrels of oil per day (BOPD) in 2006, and recent estimates suggest Canada could move from the seventh to the world’s fourth largest oil producer by 20151 .

In geological terms, oil sands are interesting because they have a long and dynamic past. The sands themselves were deposited in the Early Cretaceous, some 110 million years ago. Research suggests that the oil was expelled from deeper and older source rocks far to the west of the oil sands, in areas now occupied by, and adjacent to, the Rockies. Migration of oil into the sand reservoirs probably occurred episodically, over tens of millions of years, from a time shortly after deposition to about 50 million years ago, when the entire basin was uplifted. The oil in these shallow sands has since been extensively degraded by bacteria, a process which removes the lighter hydrocarbon molecules, leaving behind the bitumen, which now fills much of the pore spaces between grains in these oil sands.

Although this bitumen is too thick to flow out through normal oil wells, some of it – perhaps 20% of the total volume in Alberta – is within a few tens of metres of the surface and can be economically mined. Once brought to the central facility of the mine, hot water treatment can separate the bitumen (made less viscous by heating) from the sand. Then the bitumen is treated in an upgrading plant to turn it into a product more closely resembling a conventional crude oil that can be sold, transported and refined.

But much of this vast resource – more than 1 trillion barrels of it in place – lies too deep for mining to be effective. Today’s extraction techniques for this deep bitumen generally rely on thermal methods where a well is drilled into the oil sands, steam is then injected to reduce the viscosity of the bitumen, and it is then brought to surface by pumping either in the same well (using so-called “cyclic steam injection”) or in a nearby well. These thermal techniques are expensive. They require a lot of energy to generate the heat required (generally in the form of steam) and even after heating the oil production rates of each well are much lower than, for example, in the Middle East. As a result, large numbers of wells are needed, again adding to cost.

Scientists and engineers continue to research novel techniques for getting more out of these deeper oil sands layers. Some approaches involve clever well design; one example is Steam Assisted Gravity Drainage (SAGD) where suitably configured horizontal wells harness the force of gravity to increase bitumen recovery. Other approaches rely on avoiding the expensive use of external heat, for example by combustion of part of the bitumen in the reservoir itself, or by injecting solvents that make the bitumen less viscous without the need for heating.

Froth treatment at the Muskeg River Mine removes fine clay and sand particles. The result is a very clean bitumen product which is transported to the Scotford Upgrader, near Fort Saskatchewan. Images courtesy, Shell As a general rule, the environmental impact of oil sands production is higher than that of simple conventional oil production. Examples would be the land required to conduct large scale mining, or the greenhouse gas emissions associated with producing large volumes of steam, or again the energy and water requirements of additional upgrading on the surface. In response, attention is now centred on better management of water – for example, using “grey” effluent water as an input to steam generators.

As for greenhouse gas management, no one oil company can tackle this on its own. Thankfully, Alberta and Canada are starting to put frameworks in place that over time will lead to significant reductions in CO2 emissions. The recently published draft regulations make clear that one crucial technology in the fight against excessive CO2 emissions will be the capture and storage underground of CO2 from large emissions sources such as power plants and some oilsands production sites. Needless to say, these good ideas now need to enter a demonstration phase as an essential precursor to taking these solutions to scale and safeguarding the atmosphere.

Overall, the oil sands of western Canada provide a huge opportunity because of the vast resource base.  But if we are to harvest the oil efficiently we will need to overcome significant technical challenges, and in a sustainable way. As such, it’s hard to think of a more exciting area in which to work!

1 Source: CAPP presentation, London, January 2008