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Nukes for oil sands sector gathers speed Energy Alberta plans C$3 billion reactor to generate steam to produce 220,000 bpd of bitumen; in discussions with 6 producers Gary Park For Petroleum News
The nuclear option to fuel Alberta’s oil sands sector, rather than disappearing as environmental and security-conscious organizations would prefer, keeps gathering speed.
Energy Alberta Corp., a newly created Alberta company, has entered the picture with plans for a C$3 billion reactor to generate the steam needed to produce 220,000 barrels per day of bitumen by 2014.
It has negotiated a two-year exclusive deal with Atomic Energy of Canada Ltd., a Canadian government agency, to market AECL’s Candu 6 reactor to oil sands operators.
Energy Alberta has one high-profile partner in Hank Swartout, chairman of Precision Drilling Trust, Canada’s largest oilfield driller.
Although describing his role as providing “quiet background help,” Swartout has little doubt that Western Canada must come to grips with atomic energy if it hopes to develop its oil sands resource.
He said selling nuclear will need to be approached carefully because of the limited knowledge of atomic energy.
The use of natural gas in the oil sands has come under increasing fire from those who object to using a relatively clean fuel to produce a dirty one.
Tone has changed in nuclear debate The debate over the use of nuclear power, once scorned by the industry, politicians and citizens, has changed tone over the past three years since a study argued it is more economically viable than using natural gas.
Wayne Henuset, a Calgary businessman who is lead partner in Energy Alberta, said discussions are already under way with six firms who plan to use steam injection to recover bitumen.
High on that list are producers such as EnCana, Husky Energy, Total and Petro-Canada. Although they are open to alternatives none have tied their future to nuclear power.
Henuset told the Globe and Mail that Energy Alberta plans to own the nuclear reactor and sell steam to oil sands operators.
AECL Vice President Dennis Galange, in a draft memo, said the Energy Alberta pact will enhance the agency’s ability to “foster the required Alberta government endorsement for Candu in the oil sands.”
However, AECL said it will have no official comment until terms of the Energy Alberta partnership are finalized.
Klein has softened line Alberta Premier Ralph Klein, who rated nuclear power as a last resort in 2005, softened his line in April when he conceded “we have to consider nuclear power.”
But he is due to retire by year’s end and is not likely to have a role in the decision-making.
The Sierra Club of Canada, noting that the Ontario government carries huge debt from its troubled history in the nuclear industry, argued the nuclear option should be among the topics during Alberta government hearings on the future of the oil sands.
The steady shift towards nuclear power has taken another step in Ontario, Canada’s most populous province, where Bruce Power, which operates six units serving 20 percent of the population, has set the regulatory wheels in motion by filing plans with environmental regulators for four new reactors of 1,000 megawatts each and costing C$8 billion to C$10 billion.
“It makes sense for us to at least develop these options,” said Bruce Chief Executive Officer Duncan Hawthorne.
The challenge for Ontario is to both replace coal-burning power plants and hedge its bets in the event that its gas-fired operations could suffer if Western Canada’s production continues to decline.
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