OGPSS - the future of oil sand production in Alberta

If one examines the forecast future supply of liquid fuels that the EIA projects in their most recent International Energy Outlook, that for 2011, the agency projects a considerable growth in unconventional supplies of liquid fuels.

EIA projections of future growth in liquid fuel supplies (EIA)

For North America, the projections foresee considerable growth both in production within the United States (rising from 8.5 to 12.8 mbdoe) and from Canada (rising from 3.4 mbdoe in 2008 to 6.6 mbdoe in 2035).

Regional growth in liquid fuels generation 2008 to 2035 (EIA )

The growth in unconventional fuels is most critically anticipated as coming from oil sands, with biofuels (a topic for another day) close behind.

Future sources of unconventional liquid fuels (EIA )

It is, in passing and for folks such as Dr Yergin perhaps, worth noting that the EIA does not see much of a significant role for oil from shales through 2035. But it highlights the criticality of the Athabasca oil sands in the future well-being of the North American fuel supply chain.

There have been a significant number of posts, over the years, both at Bit Tooth and at The Oil Drum, in which both myself and others have written about these reserves that are playing an increasing part in North American oil supply, and that will likely also grow to supply other nations, particularly China. (A topic dating back to the start of The Oil Drum). In this particular post I will therefore just briefly overview the reservoirs, and the technologies used to extract the fuel, in looking at the projected outlook for the future – given that this has been reviewed and changed a number of times in the past. Some measure of that variation comes from the predictive curves that Sam Foucher posted back in 2006.

Predictions of oil sand production from 5 years ago (The Oil Drum )

Considering first the resource, the amount of oil that exists within the oil sands of Alberta has been estimated as being between 1.7 and 2.5 trillion barrels. It is found in three major deposits the largest of which is the Athabasca, and then there are Cold Lake and Peace River.

Locations of the major oil sands in Canada (CAPP)

There are several different ways in which the oil can be recovered, of which the one generating the most visibility is where the sands lie close enough to the surface that they can be mined. Early use of single, large-scale bucket wheel excavators did not work out well, since production is tied to the well-being of a single machine. As a result the sands are mined by perhaps 15 shovels within the mining pit, each scooping about 100 tons of sand at a time, and loading trucks, which then carry the material, 300 tons at a time, to an in-mine crusher which breaks the rock into small fragments. These fragments (with waste rock largely removed) are then mixed with hot water and pumped to large tanks at the primary Upgrader, where the sand, water and bitumen are separated.

Loading a truck, it will take 2 to 4 shovel loads to fill the truck bed, depending on its size.

There is a Youtube video of the process available.

The sand also contains small particles of clay, which are difficult to settle out of the water, and the large tailings ponds used for this have been the focus of considerable controversy. This concern is recognized, and considerable efforts are being made to reduce the time that it takes for the settlement, and for site reclamation. That effort is continuing with a collaborative effort between the mining companies and four universities to improve the technology over that currently used.

Some 80% of the reserves lie too deep for mining to be an effective solution, and with the bitumen being, in natural form, too thick to easily flow to wells, ways had to be found to encourage that flow. The most common, and that most often projected for future development, is based on the use of Steam Assisted Gravity Drainage.

Artist's illustration of the SAGD process (Devon Canada Corp)

There is a video of the SAGD process on Youtube.

One of the problems with SAGD comes in the need to generate the steam that is fed into the upper pipe, and which migrates up into the sand to heat and thin the oil. The typical method to provide the steam is with natural gas, and as Dave Cohen noted some years ago, the supply of that natural gas becomes more of an issue, as the size of the operation continues to grow.

One of the more innovative of the techniques suggested overcomes that problem through burning some of the oil in place, in a process known as Toe to Heel Air Injection (THAI) . Igniting a section of the oil sand, and after using the heat to drive off the more volatile oil while continuing the burn with residual coke left behind, as the flame front progresses, has been shown to be viable.

It is an artist’s impression of a side view of the site, with the blue dotted horizontal line representing the recovery well and air being fed in from a higher well into the formation.

The video showing the THAI process is also on Youtube.

However, at present it has only a limited planned future, though that may increase as information on the technique becomes more evident.

So what is the likelihood that, using these techniques, that production will rise to the levels which the EIA project? Well in their October 3rd edition the Oil and Gas Journal (OGJ) listed (registration required) those projects currently planned for Canada in the period through 2020 and beyond. The list contains 144 projects, many of which are defined as the separate stages of different developments. Taking just those that relate to oil sand production roughly 70% plan on using thermal methods to recover deeper oil (mainly SAGD, though there are small amounts of THAI, cyclic steam and electrothermal). 30%, roughly 2 mbdoe, of the increase in production is planned to come from surface mining.

It is unlikely that the total 6 mbdoe of increased production will all come to pass. However, given that these are all defined projects, many broken into separate phases that can be geared back or advanced, depending on market conditions, and supply – particularly in the further out years – the projected increases that the EIA project would seem to be eminently reasonable to anticipate. (Caveats on water and natural gas availability are discounted at present).

I would be remiss in not thanking HereinHalifax who led me to the report on Eastern Canadian supplies, which pointed out that the flow of crude in the pipeline from Sarnia to Montreal, about which I wrote earlier, was originally Eastward, carrying western crude, but which was reversed as the market for the oil from Alberta developed in the United States, and Eastern Canadian refineries supply switched to tanker import.

The increasing plans to produce oil from Alberta depend, to a degree, on the ability of pipelines to carry the resulting product to market. Production is therefore likely to hinge on the success with which those advocating the various pipelines are able to achieve. And to a coonsiderable extent these are political, rather than technical decisions.

Postscipt: Emmanuel has pointed out that when I discussed the fields in Eastern Canada I did not mention the Old Harry Field, which has been the subject of much debate between Quebec and the Federal Government and which may be twice as large as the Hibernia field. With apologies (and thanks to Kristin) here is the location:

Location of the Old Harry Field (Source Evidentia)

The Avatar movie and the mining of oil sands

The movie Avatar gets the mining bit wrong. And not by just a little – but then us villains are rarely understood, so what should we expect? OK so what is a popular, nay perhaps even genre changing movie got to do with technical talks about fossil fuel production? Well fairly early in the movie it is made clear that the sole purpose for the plot is to mine “unobtainium” which is a mineral with all sorts of value. Now I’m not going to give away much of what goes on in this movie (and I agree with most of that review by the way) but the fallacy over how they mine the deposits on the planet is one of the lessons learned from the mining of the oil sands in Alberta, which is actually what I want to discuss a little today. In the movie they use a variation on a bucket wheel excavator – which in today’s world looks like this


Bucket wheel excavator on the move

They were, at one time used for mining up at Fort McMurray where the large oil sand deposits are found in Northern Alberta. However the reason that they were discontinued (and which formed part of the plot of the book “Athabasca” by Alistair MacLean) is that they are the single machine whose health totally controls production. When they are working the mine is producing, and when they aren’t it isn’t. (The plot of the movie was to disable the machine and thus stop oil production - possible where there was only one machine.) The problem that really developed was that maintenance and repair of such a behemoth is such that it is more reliable and productive to rely on a multitude of smaller machines, with truck haulage, rather than the single large machine with conveyors. As the mines have learned these lessons they have pensioned off or sold most of those they had. Now, if some of the shovels have maintenance problems, with some dozen or more working at one time then the drop in production is not nearly that significant. You can see one of the problems in this picture of the teeth on the buckets (since this is the one on display I suspect that towards the end replacements weren't as frequent, but you can see how many teeth were missing and these take significant time (and money) to replace).

Note the broken and missing teeth on the front of the buckets (the bright spots are hardened buttons to reduce side wear on the buckets as they cut through the abrasive sand)

I first wrote about the oil sands back in June of 2006 and back then the production was just over a million barrels of crude a day. When Gail Tverberg wrote about her visit up there on The Oil Drum last August (Part 1 and Part 2) she noted that in 2008 production had risen to 1.2 mbd and that with current construction projects this would increase to 1.94 mbd. The current Alberta state web site expects that these projects will raise production to 3 mbd by 2018. (Which is down a bit from earlier projections)

There is some controversy that exists with regard to crude production from these mines, and the area in general. There are basically three different processes that are currently being used for oil extraction, and it is only the first of these – the mining and processing of the sand, that I will discuss today. The use of steam to recover oil from underground wells (Steam Assisted Gravity Drainage – SAGD) and the partial combustion of some of the oil to recover some of the remainder (a process called THAI for Toe to Heel Air Injection) will be written about in subsequent posts.

Part of the reason that the topic is controversial is due to the need for natural gas to create the steam used in the SAGD process, but there are other concerns that have arisen because the sand does contain some natural gas that can be drawn off and sold commercially. Last October the Energy Resources Conservation Board ruled that 158 wells that were producing natural gas from the sand should be shut-in (that means closed) since gas production from them might interfere with the SAGD process. In particular the drop in pressure as the gas is removed may negatively impact subsequent SAGD production. A hearing on this will be held early this year. It is also a target for additional taxes and regulations in order to “green” the industry.

So what is there to green? Let me run through the process. The oil sand lies below a relatively thin cover of vegetation, soil and rock, which is first removed and stockpiled so that it can be replaced, after mining is completed. Once that has been done (using the same large shovels and trucks that are used for mining the sand) then the sand is mined using large shovels that can load a truck with 100 tons of material at a time.

loading the truck, it will take 2 to 4 shovel loads to fill the truck bed, depending on its size.

In the summer, when the temperatures are higher, the sand is easier to move, and thus dozers can be used to push down the material into the arc of the shovel, so that it does not have to reposition itself that often, and production from higher benches can be kept up.

Dozer loading shovel

The trucks are used to carry the material to the initial processing plant. The sand as well as being heavy, is also abrasive, so that there is considerable wear on not only the teeth of the shovel, but also on the tires (my head is about the height of the axle) but also on the beds of the trucks so that these have to be periodically replaced.

Relining the bed of a truck.

The trucks are used to carry the mined material to a central processing plant within the pit, and it is first dumped into a primary breaker.

Tipping into the breaker

The oil sand is relatively soft, but contains layers of rock that have little oil in them, and these are generally harder, so that they survive the crushing - which also means that they are bigger, and can be separated out and removed from the system, before the oil sand passes into a mixing tank, where it is mixed with hot water, agitated, which breaks it down into particles, since the individual sand grains are coated with a thin layer of water, under the intervening oil that ties it all together.

Mixing the sand with water

The resulting slurry is then passed to a pump station, that pushes the slurry through a pipeline, which carries it to the initial separator at the refinery.

Pump station and delivery pipeline

The pipe is about a mile long, and in the time that the sand passes along it the oil and sand are separated. At the beginning of the refinery the slurry is then pumped into a large tank. Simplistically the sand settles to the bottom of the tank, the water lies in the middle (where it can be drawn off for re-use) and the oil floats on the top and can be drawn off to feed into the refinery.

Initial sand:oil separator

The heavy crude is treated in this initial refinery so that the resulting liquid can be sent as a sweet crude down to other refineries further south.

Upgrading refinery

This requires among other things, removing the sulfur from the oil. Sometimes that can be marketed but sometimes it must be stock-piled, and there are thus the start of "sulfur pyramids" being constructed around the refinery.

Start of a sulfur pyramid.

Once the oil sand has been removed down to the underlying bed rock, the sand can be replaced and the land reclaimed. Gail did a tour of some of the sites, and has posted pictures - unfortunately I did not have have that opportunity.

As usual this has been an abbreviated explanation of a process, comments and questions might indicate where I need to explain things in more detail.