Gas consumption, eco-threats dog oil sands

Gary Park

Natural gas consumption and environmental impact — two of the toughest obstacles in the path of oil sands expansion — are getting a fresh airing.

A new report by Ziff Energy Group forecasts consumption of gas to extract and process bitumen in northern Alberta could quadruple over the next nine years to 2.4 billion cubic feet per day — double the likely initial capacity of the Mackenzie Gas Project — and could affect exports to the United States.

Daily consumption in the oil sands sector was 600 million cubic feet in 2005 and will likely be unchanged this year before it starts a steady climb to 1.6 bcf in 2012 and 2.4 bcf in 2015, based on a tripling of output to 3.3 million barrels per day.

The inevitable result will be a downturn in exports because of the projected decline in production from the Western Canada Sedimentary basin over the next decade.

Ziff officials expect the bulk of any gas from northern Canada will end up in the oil sands.

The rising demand in the oil sands stems from the fact that 11 of 14 projects that are proposed are in-situ operations that use larger volumes of gas to generate the steam needed to melt bitumen deposits buried below 250 feet.

However, there are hopes that emerging technologies could reduce the sector’s use of gas, although it will likely be later than 2010 before it is known whether these methods will work.

In its latest swipe at the oil sands, the Pembina Institute for Sustainable Development rejected the common view that in-situ projects will cause less land disturbance than open pit mines.

The think tank said in-situ, or thermal projects require a network of roads, pipelines wells and processing plants that will scar the landscape, pushing wildlife closer to extinction, and could turn a land area the size of Florida into an ecological write off.

Pembina, calling for a moratorium, said the Alberta government still has five years to slow the pace of development and set new standards.