The Other Oil Sands

Close your eyes and think for a moment of the oil sands. What do you see? Giant shovels? Heavy haul trucks?

If these are the images that come to your mind’s eye, you are thinking of oil sands mining. But, what is not widely recognized is only 20 per cent of the recoverable oil sands resources are shallow enough to be mined. And those mineable barrels lie under only 2.5 per cent of the overall land area of the oil sands.

Mining is a critical component of the oil sands story that will produce oil for decades to come. But as you will see, it is not the whole story.

The other side of the story is the 80 per cent of the resource known as in-situ oil sands production. In-situ production (or drillable oil sands production) is used to recover deposits that are located more than 75 metres underground. Most in-situ bitumen production comes from deposits buried more than 400 metres below the surface of the earth.

Steam-Assisted Gravity Drainage (SAGD) is currently the predominant in-situ recovery method in the Athabasca region which works by injecting steam through long horizontal injection wells. The thick bitumen is heated so that it is able to drain by gravity to production wells below the injection well and then be pumped to the surface.

There are, however, many other technologies being tested today focused around decreasing water and energy use - and, hence, Greenhouse Gas (GHG) emissions - while increasing bitumen recovery efficiency.

Just one example of this is Suncor’s Zero Liquid Discharge (ZLD) Process at its MacKay River in-situ facility. Among ZLD’s benefits is its water recycling rates of 96 per cent, meaning the MacKay River facility needs very little water from nearby aquifers for its operation.

Another good example is Petrobank’s THAI® or Toe-To-Heel Air Injection technology.
THAI® creates underground combustion to liquefy and produce the bitumen with emissions staying trapped underground. THAI® has the potential to recover 70 to 80 per cent of the bitumen in-place, uses little fresh water and emits 50 per cent less GHG emissions.

The electric stimulation process enables low-cost recovery of stranded oil reserves by applying electric currents to hydrocarbons in the ground. This process upgrades and mobilizes heavy oils that are too viscous to be extracted by conventional techniques. E-T Energy has plans to begin production in 2012 starting with 10,000 barrels per day.

What makes the oil sands so valuable to all of us from an economic perspective is the substantial amount of R&D, expertise, specialized skills, engineering and support services that go into creating these oil sands technologies.

This is not conventional oil production, which can be done for just a few dollars a barrel in the giant oil fields of the Middle East. This is technically difficult and costly, with some projects needing oil prices above $50 a barrel to break even. That complexity, though, is good for economic development.

The in-situ segment of the industry is expected to grow substantially in the next few decades. There is currently around $12 billion worth of new in-situ facilities under construction, $23 billion with regulatory approval and $132 billion in the development process.

Oil sands development is one of the largest industrial projects ever undertaken in Canada. And as in-situ production becomes the next “conventional-unconventional oil”, its economic impacts will continue to grow even as its environmental footprint continues to decline.
For more information on current oil sands in-situ projects visit the OSDG project status.

Did you know...

Canada’s oil reserves are second in the world behind Saudi Arabia

Of 179 billion barrels of Canada’s oil reserves, the oil sands represent 97 per cent

For each permanent oil sands-related job, nine additional direct, indirect and induced jobs are created in Canada.

Currently 240,000 jobs in Canada are directly or indirectly linked to the oil sands.

Between 2000 and 2020, oil sands development has the potential to generate at least $123 billion in royalty and tax revenues for Canada’s federal and provincial governments.

The oil sands currently account for only 4.6 per cent of Canada’s greenhouse gas emissions. This is less than 0.1 per cent of total global emissions.

Alberta was the first jurisdiction in North America to legislate industrial greenhouse gas emission reductions.

Producers have made great strides in reducing the amount of emissions per barrel of bitumen extracted from the oil sands. The equivalent of 2.6 million tonnes of reductions have been made – the same as taking more than 550,000 cars off the road.

The province of Alberta has committed $4 billion toward climate change initiatives, including $2 billion for public transit and $2 billion for carbon capture and storage (CCS). This is the largest CCS investment in the world.

Air quality around oil sands operations is better than all North American cities reviewed by the Alberta Clean Air Strategic Alliance.

Alberta air quality standards are the most stringent in Canada.

Air quality in Fort McMurray is monitored around the clock. Results are available at the WBEA site.

Air quality has been extensively modeled and demonstrated to remain within Alberta’s strict air quality guidelines even with all projected oil sands development in place.

Oil sands are located below the surface of 140,200 square kilometres of land, 4.5 per cent of Canada’s total boreal forest.

Mineable oil sands only exist under 0.1 per cent of Canada’s total boreal forest.

While disturbance is occurring daily, in more than 40 years oil sands mining has disturbed about one hundredth of one per cent of the Canadian boreal forest – some 500 square kilometres.

Since 2001, coordinated efforts between government and industry through Integrated Landscape Management (ILM) activities have reduced land surface disturbance in the region by 20 per cent.

As required by law, and included in all project approvals, reclamation work is ongoing and continuous in the oil sands. All lands disturbed by oil sands will be reclaimed.

Mining is only an option for oil sands that sit less than 75 metres under the surface.

More than 80 per cent of the oil sands will be developed using in-situ technologies.

In-situ projects resemble conventional oil development and do not require tailings ponds, or mine pits.

In-situ operations create linear disturbance of the surface for wellheads. But new technology and processes, including low-impact seismic and directional drilling, are reducing that footprint.

In Alberta, Alberta Environment regulates oil and gas industry water use under the Water Act. Oil and gas companies are subject to the same conditions for use as any other licensed water user in Alberta.

Currently, the oil sands industry draws less than half the water allocation allowed by Alberta Environment from the Athabasca River.

Water allocations are strictly controlled during low flow periods.

More than 80 per cent of water drawn by industry from the Athabasca is recycled.

Non-potable water which is unsuitable for drinking, livestock or irrigation use is used wherever possible for in-situ production.

Alberta Environment prohibits the release of any water to the Athabasca River that does not meet water quality requirements.

RAMP, a multi-stakeholder body, conducts annual monitoring of the river’s fish species, fish habitat and water quality. The monitoring has not detected significant changes to the Athabasca River.

Bitumen from exposed oil sands along the river banks has seeped naturally into the Athabasca River as it cut its way through the landscape.

Tailings contain the water, residual bitumen, sand and clay that is left over when the bitumen is separated from the sand.

In the ponds, the solids separate from the water so the water may be recycled into the process again. Of the total water used by oil sands mines, 80 per cent is recycled.

During and after mining, the tailings ponds are reclaimed. No tailings water is released to the Athabasca River or any other watercourse.

The first tailings ponds will be reclaimed in 2010.

80 per cent of the oil sands resource will be developed using in-situ technology which does not require tailings ponds.

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