oil sands 101 erg victoria jan 09 roger bailey. alberta tar sands big, tough expensive job not...
TRANSCRIPT
![Page 1: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/1.jpg)
Oil Sands 101
ERG VictoriaJan 09
Roger Bailey
![Page 2: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/2.jpg)
Alberta Tar Sands• Big, Tough Expensive Job• Not Economic• Depends on government handouts• Dirty Oil• Pollutes the Environment
– Air: SOx, Nox, CO2, Climate – Water: consumption, toxic sludge– Land: Devastates Boreal forest
• Destroys society
![Page 3: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/3.jpg)
Alberta Oil Sands
• World’s largest oil deposit 2,000,000,000,000• Established Reserves: 173,000,000 barrels• Canada’s economic engine• $70 billion invested, $70 billion planned• Now 1.2 million BPD, 5 million BPD in 2030• Creates Jobs and Wealth • Mining yesterday’s technology• In-Situ SAGD is the future
![Page 4: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/4.jpg)
What Changed?
1. Price of oil over $50 / bbl2. “The end of cheap oil” 3. Government Policy.4. Technology5. Resources to Reserves
![Page 5: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/5.jpg)
What Recently Changed?
1. Price of oil under $40 / bbl2. Not “the end of cheap oil” 3. Government Policy
1. Royalties up (Syncrude + $2 billion)2. Taxation: No accelerated CCA 3. CO2 Penalties
4. Technology: CO2 focus5. Resources to Reserves? Economics
![Page 6: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/6.jpg)
AOSTRA• Alberta Oil Sands
Technology and Research Authority• Alberta invested $750 million in R&D• Industry matched funding and did the work• Enabling Technologies
– Steam Assisted Gravity Drainage (SAGD)– Cold Water Extraction (OCWE)– Consolidated Tailings (CT)
![Page 7: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/7.jpg)
Alberta’s Oil Sands Areas
![Page 8: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/8.jpg)
Alberta Geology
![Page 9: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/9.jpg)
Alberta Oil Sands Production
![Page 10: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/10.jpg)
Alberta Oil Production
Source: CERI Study CAPP Backgrounder 2008
![Page 11: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/11.jpg)
Alberta Oil Update Dec 2008
Source: CAPP Update Dec 2008
![Page 12: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/12.jpg)
Oil Sands Projects
Athabasca Mining1,115,000 –2,977,000
Athabasca In-Situ324,000 – 1,543,000
Cold Lake In-Situ219,000 – 280,000
Peace River In-Situ 12,000 – 100,000
![Page 13: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/13.jpg)
Mining Technology Change• Truck and Shovel
Hydrotransport
Cold Water Extraction
Consolidated Tailings
![Page 14: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/14.jpg)
Athabasca – Mining
Operator Project Initial Potential
Albian/Shell Muskeg/Jackpine 150,000 560,000
Suncor Base Plant 280,000 550,000
Syncrude Base Plant 300,000 600,000
CNRL Horizon (2008) 135,000 577,000
Imperial Kearl (2010) 100,000 300,000
Petro-Canada Fort Hills (2011) 100,000 190,000
Total Joslyn Creek Mine(2013) 50,000 200,000
![Page 15: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/15.jpg)
Athabasca – In Situ - SAGD
Operator Project Initial Potential
•JACOS Hangingstone 1 0,000 30,000
•Suncor Firebag 68,000 375,000
•ConocoPhillips Surmont 25,000 110,000
•EnCana Christina/Foster 42,000 400,000
•Devon Jackfish 35,000 70,000
•Husky Sunrise (2012) 50,000 200,000
•OPTI/Nexen Long Lake 72,000 288,000
•Petro-Canada MacKay River 22,000 70,000
![Page 16: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/16.jpg)
Cold Lake – In Situ –SAGDOperator Project Initial
Potential
•Shell Hilda Lake (pilot) 600 20,000
•CNRL Primrose 50,000 110,000
•Imperial Cold Lake (CSS) 150,000 110,000
•Husky Tucker 18,000 40,000
•Peace River – In Situ
•Shell Peace River 12,000 100,000
![Page 17: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/17.jpg)
Underground Test Facility (UTF)
Shaft & Tunnel Access
SAGD Well PairsHorizontal Injector And Producer
![Page 18: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/18.jpg)
Steam Assisted Gravity Drainage
• Steam injected in upper horizontal well melts the bitumen
• Bitumen flows by gravity down to the lower producing well
• Steam chamber grows as bitumen is produced
• Recovery over 60%
![Page 19: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/19.jpg)
SAGD Applicability
• Resources to Reserves• 352 Billion @ 6%• 239 Billion @ 10%• EUB Reserves in 2000• 173 Billion based on
SAGD • Steam Assisted Gravity
Drainage
![Page 20: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/20.jpg)
Oil Sands Reserves
![Page 21: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/21.jpg)
Steam Assisted Gravity Drainage
![Page 22: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/22.jpg)
Steam Assisted Gravity Drainage
• SADG needs steam. Steam Oil Ratio ~3
• Steam is water and energy– Both are limited and expensive
• Little fresh water: saline and recycle• Expensive water treatment required• Energy? Gas, Co-generation?• Gasification? Pitch? Nuclear?
![Page 23: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/23.jpg)
SAGD CO2 Emissions• Natural gas for steam ~1 GJ/barrel• CO2 Emissions ~60 kg/bbl• Cogeneration:
– Gas turbine produces electricity – Exhaust + re-firing produces steam
• Cogen steam for SAGD with no CO2• CO2 in Cogen charged to electricity• CO2 from Cogen less than coal
![Page 24: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/24.jpg)
Nuclear Energy for Oil Sands?
Nuclear for steam, electricity and hydrogen is possible but….
![Page 25: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/25.jpg)
Oil Sands Projects
Source: CERI Study CAPP Backgrounder 2008
![Page 26: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/26.jpg)
Bitumen Upgrading• Upgrading takes the black
out of black oil, the tar (asphalt)
• Synthetic crude approximates crude oil for refineries
• SCO flows and distils to refinery fuel products
• Bitumen needs carbon out or hydrogen in
• Capital, energy and CO2 intensive
• Refinery integration in US?
![Page 27: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/27.jpg)
Wall of Cash Flow“Wall of Cash Flow”
![Page 28: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/28.jpg)
20 Year Horizon
Source: CERI Study CAPP Backgrounder 2008
![Page 29: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/29.jpg)
![Page 30: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/30.jpg)
![Page 31: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/31.jpg)
![Page 32: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/32.jpg)
Source: CERI Study CAPP Backgrounder 2008
20 Year Horizon
![Page 33: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/33.jpg)
![Page 34: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/34.jpg)
Oil Sands Challenges• Environmental sustainability
– CO2 costs– Natural gas limitations and costs
• Fiscal changes, lower returns• Infrastructure limitations• Workforce • New Markets and Pipelines• Upgrading? Moving to US refineries
![Page 35: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/35.jpg)
Inflation: Capital Cost
Source: CAPP Backgrounder 2008
![Page 36: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/36.jpg)
Dirty Oil?
• Not the “End of Oil” nirvana• Other oil options will be produced• Oil Sands, Oil Shale, Carbonates• Life Cycle Analysis:
– 85% of Emissions in use as fuel
![Page 37: Oil Sands 101 ERG Victoria Jan 09 Roger Bailey. Alberta Tar Sands Big, Tough Expensive Job Not Economic Depends on government handouts Dirty Oil Pollutes](https://reader036.vdocuments.us/reader036/viewer/2022081520/56649c7c5503460f94931740/html5/thumbnails/37.jpg)
Life Cycle Analysis