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Sands producers taking in their dirty laundry Two new oil sands technologies report solid results from trials to lower natural gas, water while developing bitumen resources Gary Park For Petroleum News
Taking heat for its token efforts to tackle greenhouse gas emissions, Canada’s petroleum industry — particularly its oil sands sector — is making quiet progress toward cleaning up its operations.
But there is a long way to go just to put oil and gas explorers, producers and processors on the same footing as the rest of Canadian industry.
A newly released report from the National Advisory Panel on Sustainable Energy Science and Technology delivered a black eye to the industry.
It showed industry across Canada is spending 3.8 percent of its revenues on research and development; for the energy industry as a whole it is 0.75 percent and, after taking out fuel cell research and the electricity sector, oil and gas companies are allocating a mere 0.36 percent.
However, there are some glimmers of leadership, as reflected in two recent developments.
Whitesands In-situ, a subsidiary of Petrobank Energy and Resources, has reported encouraging results from field trials of a new technology to lower natural gas consumption and greenhouse gas emissions at a site where it hopes to develop gross bitumen-in-place resources of 1.6 billion barrels.
Separately, Quadrise Canada Fuel Systems is planning to build a plant that would produce electricity from its bitumen/water emulsion-burning technology in the oil sands as well as yield carbon dioxide for enhanced oil recovery.
Petrobank selecting site Petrobank President John Wright said his firm’s technology should be translated into a project that will initially produce 10,000 barrels per day. Currently a site is being selected and engineering is scheduled to start early in 2007.
The method is known as THAI, or toe-to-heel-air-injection, in which air is injected under high pressure to the “toe” of the reservoir. It ignites and thins the bitumen.
Gravity then allows the melted bitumen to flow to a horizontal production well at the “heel” of the reservoir.
Wright has previously claimed the potential impact of THAI on global heavy oil reserves is “staggering, considering the opportunity to not only increase the profitability of heavy oil and bitumen production, but also to significantly increase the economically exploitable resource base worldwide.”
Petrobank estimates carbon dioxide emissions will decrease by 50 percent compared with conventional oil sands extraction methods and that virtually eliminates the use of fresh water, a major challenge facing the sector.
The company reported that its first test achieved prolonged temperatures as high as 800 degrees Celsius and continuous flows exceeding 1,000 bpd.
Petrobank Vice President Chris Bloomer said the company has moved beyond wondering whether the technology works and is now trying to figure out the quickest way to scale up to commercial production.
Quadrise technology has been tested Quadrise’s technology is called MSAR, for multiphase superfine atomized residue — a liquids fuel comprising fine oil droplets suspended in water, which can be made from bitumen and refinery residue.
It is being presented as a cheaper alternative to using natural gas to generate steam for steam-assisted gravity drainage projects which are the preferred technology for developing bitumen deposits buried too deep for open-pit mining.
MSAR has been tested at the Joslyn project, now operated by France’s Total, while other SAGD operators Petro-Canada, ConocoPhillips Canada and Paramount Resources participated in the test.
Quadrise Chief Executive Officer Alfred Fischer said MSAR burned better than natural gas during the March-to-October 2005 test.
An analysis commissioned from Purvin & Gertz determined that the project met all of Quadrise’s demonstration test objectives.
A separate joint venture project with Paramount in the Surmont area of northeastern Alberta has been operating for almost a year, with encouraging results.
Quadrise and Paramount have filed a patent application for the technique.
Fischer wants to combine the Joslyn and Surmont processes at a power plant demonstration pilot which he hopes can be built by late 2007.
He said negotiations are now under way with several interested companies, drawn by the chance to take advantage of a “zero-emissions project and deal with the carbon dioxide issue.”
Fischer said the MSAR-burning technology produces an exhaust stream that is more than 90 percent CO2, compared with less than 20 percent CO2 from coal-fired power plants, making the cost of separating the CO2 for enhanced oil recovery too costly.
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