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Providing coverage of Alaska and northern Canada's oil and gas industry
February 2003

Vol. 8, No. 6 Week of February 09, 2003

Alberta ponders ‘nuking’ its oil sands

Government studies economics of using nuclear power rather than natural gas to recover bitumen; security expert warns of ‘one-stop shopping’ target for terrorists

Gary Park

PNA Canadian Correspondent

The Alberta government and Atomic Energy of Canada Ltd. are probing the use of nuclear power rather than natural gas as an energy source for oil sands projects — a prospect that alarms anti-terrorism experts.

Atomic Energy of Canada, a federal government corporation that sells nuclear reactors, has commissioned a C$35,000 study by the Canadian Energy Research Institute to determine whether it’s cheaper and technically feasible for oil sands operators to switch from gas to nuclear power.

Bob Dunbar, Canadian Energy Research Institute's senior director of research, said preliminary indications suggest the nuclear option is economically competitive. Final results are expect later this month.

Bob Taylor, Alberta’s assistant deputy minister for oil development, told a Canadian Energy Research Institute conference Jan. 28 that there are nuclear reactors that could serve as the primary fuel source to extract and process oil sands at plants producing 200,000 barrels per day.

The pressure to seek alternatives is building as Alberta eyes potential oil sands output of 4 million barrels per day — an eight-fold increase from current levels — over the next 50 years, a level that would consume the province’s entire gas production.

Natural gas consumption in the sector is projected by FirstEnergy Capital Corp. to pass 500 million cubic feet per day this year and reach 750 million cubic feet per day by 2005 at a time when the Western Canada Sedimentary Basin is in sharp decline.

Mackenzie gas to oil sands

It has been estimated that the major owners of gas on the Mackenzie Delta — Imperial Oil Ltd., Shell Canada Ltd., ConocoPhillips Canada Ltd. and ExxonMobil Canada — would need the bulk of their initial Delta output just to service their current and planned oil sands ventures.

But David Harris, a former agent with the Canadian Security Intelligence Service, said building a nuclear reactor in the middle of the oil sands would be like “one-stop shopping” for terrorists.

Nuclear power “would represent a higher value target overall,” he said.

However, Alberta Energy Minister Murray Smith said a reactor could be built in sparsely populated northern Saskatchewan, which produces 25 percent of all the world’s uranium and would have an opportunity to make money off the facility.

He said the same nuclear power source could also be used to supply homes and industry with power.

Alberta Premier Ralph Klein, with the disasters of Chernobyl and Three Mile Island in mind, said he needs clear proof that such a plant would be safe, regardless of where it might be built.






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