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FIELD CASE HISTORY

Athabasca Downloaded from http://onepetro.org/JPT/article-pdf/15/05/479/2214045/spe-517-pa.pdf by guest on 29 September 2021 L. A. BELLOWS JUNIOR MEMBER AIME OIL & GAS CONSERVATION BOARD OF V. E. BOHME CALGARY, ALTA. MEMBER AIME

Abstract The oil sand is primarily quartz with varying percent­ The location, and general geology of ages of silt and clay. Maximum oil saturation is about Alberta's are described with a short 18 per cent by weight in a clean sand but decreases with history of exploration, research and development to date. increasing silt and clay content. Sand with oil saturation Proposed methods of separating the oil from mined sands in excess of about 10 per cent is classed as a "good" grade include hot-water and cold-water separation, and centrif­ while sand containing less than about 5 per cent of oil is ugal and supersonic processes. recovery methods not considered to be economically recoverable by present using combustion, injected fluids or nuclear explosions mining and processing techniques. have been investigated. A project for mining and hot­ . The oil found in the McMurray formation is heavy, water separation is scheduled to begin operation in 1966. VISCOUS and sulfurous. Specific gravity is from 1.002 to Another proposed mining project and an in situ recovery 1.027; , 3,000 to 400,000 poise at 60F. The sulfur operation are described briefly. The impact of oil-sands content is from 4 to 5 per cent, and the nitrogen content on Alberta's market is discussed. is about 0.4 per cent. The origin of the oil has been explained by a number of different theories but the gen- Introduction The Athabasca oil sands of the McMurray formation' in northeastern Alberta cover an area of about 21,000 sq miles and contain the world's largest reserve of eco­ nomically recoverable oil. Fort McMurray, a small town in the heart of the oil-sands area, is about 235 air miles northeast of . A railway serves the town but no year-round roads connect with the rest of Alberta (Fig. 1). The McMurray formation is of early Cretaceous age, deposited unconformably on a limestone surface of Devonian age. The sediments appear to have originated from the Canadian Shield to the east and were deposited in bays and deltas of large fresh-water lakes. The lakes were later replaced by marine seas in which the overlying Clearwater shale was deposited (Fig. 2). The sand body rarely exceeds 200 ft in thickness and is made up of innumerable minor and major lenses of unconsolidated oil-bearing sand interspersed with clay and shale partings of variable thickness, carbonaceous and lignite beds, some rock and boulders. Overburden thins along a topographic trough which contains the and increases in thickness to about 2,000 ft along \ CALGARY the southern and western limits of the oil impregnation. '\ 0 SCALE-MILES Oil sand is exposed on the banks of the Athabasca River ..... 50 o 50 100 150 and its tributaries. 1 !

_ . _ .. _ .._ ... _.~\_. OUTCROP Of OIL SANDS - _ Originai manuscript received in Soeiety of Engineers offiee Jan. 14. 1963. Revised manuscript received March 26 1963 Paper -';;"$."4: _... __ .-L ____ ._ .. _... _.. __ _ presented at 92nd Annual Meeting of AIME Feb 24:28 1963 in , Tex. ' . , , "References given at end of paper. SPE 517 Fig. 1

MAY, 1963 479 small-scale plant to investigate the feasibility of mining the sand and separating the oil by means of a hot-water washing process. At about the same time two private inter­ ests (Abasand and Bitumont) started independent attempts to mine and separate oil sand at locations along the Athabasca River. An attempt was made to recover oil by in situ combustion and steam injection with varying degrees of success, but none of the operations was con­ sidered satisfactory for immediate commercial application. Until the start of World II all the projects were to obtain road-paving materials-either oil sand in its natural state or separated oil for use in plants. Fig. 2-Generalized cross-section of the Athabasca oil-sands During the war the Canadian Government became inter­ area (vertical scale exaggerated). ested in the sands as a source of petroleum for gasoline. The Federal Government took over operation of one of erally accepted hypothesis is that the oil migrated from the Abasand plants which was mining some sand and the Devonian limestones. separating oil by a hot-water extraction process. The plant

was rebuilt to use a cold-water process but was destroyed Downloaded from http://onepetro.org/JPT/article-pdf/15/05/479/2214045/spe-517-pa.pdf by guest on 29 September 2021 by fire in 1945 before it started operation. Reserves In 1944 the Government of Alberta invested $500,000 The amount of oil in place in the sands is estimated' in the Bitumont enterprise to promote utilization of the to be well over 300 billion bbl, with none appearing to be sands. In 1948 K. A. Clark of the Research Council of recoverable by natural flow. A well which had been drilled Alberta was named to direct the project. A plant was into the oil sands and left open since 1900 was re-entered constructed and operated successfully in 1949, again using in 1957, when about 30 ft of tar-like oil was found to the hot-water extraction method.' have accumulated in the hole. In situ recovery using heat Discovery of major conventional crude oil reserves in in some form or open-pit mining seems to be the most Alberta caused a decrease of interest in oil-sand oil; logical recovery method. however, in 1951 the Government of Alberta sponsored A principal criterion in determining economical recovery an Athabasca Oil Sands Conference. Papers summarizing by mining methods is the ratio of oil sand to overburden. all the oil-sand knowledge" were presented, including Submissions made to the Conservation Board have indi­ papers on the theory of mining by block caving and in cated that a ratio of about 2: 1 or 1: 1 will permit mining situ electrovolatilization. Neither of these theories Was methods to be used for recovery. At an oil sand to over­ considered economic. burden ratio of 2: 1, about 1 \/2 billion bbl of oil is avail­ In 1958 Richfield Oil Corp. proposed the use of a small able; and a ratio of 1: 1 provides an additional 3Yz billion nuclear underground explosion as a source of heat for bbl of oil. These reserve figures are for minable sands recovery of oil from the sand. A special committee studied containing more than 10 per cent oil by weight and would the proposal and in a report submitted in 1959' recom­ be considerably higher if lower quality sands were in­ mended to the Provincial Government that the test be cluded. carried out. However, the international moratorium on By pr:;sen~ly prJPosed mining methods the over-all atomic testing and subsequent Canadian Government poli­ rfcovery of n11rke~able oil is cs:ima:ed to tc about 50 to cies have prevented the experiment. 6J per oent of the oil in place-using 5 per cent oil by weight as a cut-off for the reserve estimates. The only Ownership and Government Legislation in situ recovery estimate available is the 50 to 70 per cent An important section of the history of the oil sands is quoted by Shell for their in situ projecC; and when above­ the historical background of ownership and government ground losses and fuel requirements are included, the legislation concerning the sands. over-all recovery will be in the range of 30 to 45 per cent. In Oct., 1930 all natural resources owned by the Federal Since the major portion of the oil in the sands will likely Government were turned over to the provincial govern­ be recovered by in situ methods, the best current estimate ments. Alberta gained title to virtually all of the oil sands for over-all recovery from this reserve would be in the except for a few parcels reserved by the Federal Govern­ 30 to 45 per cent range. Using a 35 per cent recovery ment and small areas of freehold ownership. The present factor, the oil-in-place estimates will exceed 100 billion policy of the Alberta Government is to retain title to the bbl of marketable oil reserves. sands but to permit exploitation either by issuing prospect­ ing permits which allow exploration of the sands or by History (From Ref. 4) granting 21-year leases permitting the recovery of com­ mercial oil from the sands. An area of about 7,000 sq In 1778 , an explorer of the Canadian north­ miles-covering most of the oil-sands area-was made west, first noted the occurrence of the Athabasca River available for prospecting permits or leases. About 80 oil-sands outcrops in his journals. Surface geological sur­ leases and three permits are currently in force, covering veys were carried out during the 1800's. Some drilling was 2Yz million acres. The royalty payable to the government begun in the early 1900's in search of a "bitumen pool" in the early leases was set at 10 per cent of the value of believed to exist beneath or down dip from the oil sands. the products taken from the sands. Sand was quarried during this period in the vicinity of In 1955 the government enacted legislation exempting McMurray and used in its natural form for road paving. oil-sands oil from the market proration system in effect The years 1929 and 1930 marked the beginning of con­ since 1950 for conventionally produced oil. This exemp­ tinuous efforts to recover oil from the sands. The Alberta tion was considered vital for economically feasible opera­ Research Council (formed in 1919) had been experiment­ tions. In 1960 and 1961 further changes in legislation ing with oil separation. The council built and operated a required approval of the Oil and Gas Conservation Board

480 JOURNAL OF PETROLEUM TECHNOLOGY for any development proposed for the sands. In 1962 an Sands. Some variations of the hot-water separation process amendment to the Mines and Minerals Act specified that are proposed, based on several years of pilot-plant work royalty payments would be a maximum of one-sixth of in the oil sands. The separation phase would employ a the value of all products derived from the oil sands. The secondary recovery section to recover oil from the water royalty rate for the first project approved was later speci­ drawn from the first separation cell. This secondary re­ fied as 8 per cent on the first 900,000 bbl of production covery stage would permit the processing of sands with oil per month and 20 per cent on production in excess of this saturations as low as 6 per cent by weight. The products amount. Concurrently, the Bituminous Sands Regulations would be 6,250 tons/day of coke (used as fuel), 100,000 were enacted, specifying the tenure and conditions appli­ B/D of 30° API synthetic crude and 450 tons/day of cable to leases and permits. sulfur.

Recent Developments Shell Oil Co. of , Ltd. During the late 1950's and early 1960's Cities Service The first in situ project for oil recovery has been pro­ Athabasca Inc. had been operating a pilot plant investigat­ posed by Shell Oil Co. of Canada, Ltd. The company pro­ ing mining of oil sand and subsequent oil separation. Pan poses to inject steam and caustic solution into wells drilled American Petroleum Corp. and Shell Oil Co. of Canada on a five-spot pattern using four-acre spacing. Gas, lift Ltd. both have operated pilot projects investigating the would be used to recover an emulsion containing 25' per cent oil from the producing wells. recovery of oil by in situ combustion or fluid injection. Downloaded from http://onepetro.org/JPT/article-pdf/15/05/479/2214045/spe-517-pa.pdf by guest on 29 September 2021 Following dehydration and thermal conversion, the sour In 1960 Great Canadian Oil Sands Ltd., which had crude would be pipelined to Edmonton for upgrading. The taken over the Abasand Co. and its oil-sand leases, applied final products would be 100,000 B/D of 33° API synthetic to the Conservation Board for a permit to produce crude and 400 tons/day of sulfur. 11,500,000 bbl/year of synthetic crude oil from this lease. The company proposed to use a mining and slightly Impact on Conventional Oil Market modified hot-water separation process which had been designed on the basis of data and experience gathered In order to understand how oil-sands production would from the· plants at Abasand and Bitumont and experi­ affect conventionally produced oil, consideration must bc mental work on some phases which required further given to the position of conventionally produced oil in development. After a public hearing, the Board found the project deficient in some respects, and recommended that the application be continued to June, 1962." In Sept., 1962 a revised proposal by Great Canadian was recom­ mended by the Board for approval by the Provincial Oil SAND FEED Government. 3,664 TPH - .----__'----, '------DRUM The Cities Service group applied to the Oil and Gas WATER 2752 T PH Conservation Board for permission to construct a plant STEAM 992 TPH for the production of 100,000 B/D of synthetic crude STEAM II 2 TPH oil from the sand to be mined from their lease, with pro­ AIR-----./ duction to commence in 1969. Shell Oil Co. of Canada WATER Ltd. also has asked approval for an in situ project to 4,2859 TPH recover 100,000 BOPD from the sands. OIL TO COKER 50,186 BPSD Proposed Development

The Great Canadian Oil Sands Ltd. project for the - WATER recovery of synthetic crude oil is scheduled to go into full production in 1966. The recovery process will include mining and conveying the oil sands to a plant where the heavy oil will be separated from the mineral material by Fig. 3-Scbematic flow sheet of the hot-water extraction a hot-water process; the oil will be dehydrated and up­ process proposed by Great Canadian Oil Sands Ltd. graded by coking, fractionation and desulfurization. The products will be 1,900 tons/day of coke, 300 tons/day of sulfur, 31,500 BID of 3rAPI gravity oil suitable for 8 pipeline transportation and as a feed stock (Fig. 3). The amount of synthetic crude oil recovered is expected rJl uJ 6 to be about 67 per cent of the oil in the processable sand. It: It: Great Canadian has contended that processable sand will

Cities Service Athabasca Inc. A second mining project proposed by Cities Service Athabasca Inc. is planned to produce 100,000 B/D from ~~5~2--~19~5~5~----~1~96~O~----~19~6~5------~19~70~----~19'75 their lease adjoining the Great Canadian Oil Sands site. YEAR The Cities Service Athabasca project would use a sequence Fig. 4-Vil'gin recoverable reserves and remaining recover­ of operations somewhat similar to Great Canadian Oil able reserves of Alberta crude oil.

MAY, 1963 481 Alberta today, the prospect for future reserves of con­ Production rates from oil-sand recovery projects will -ventional oils and oil-sands policy outlined by the Provin­ not be subject to the month-to-month control now enforced cial Government. on oil wells, but generally will remain constant for the life of the project. Since conditions indicate that oil-sand Status of Conventional Oil production and conventional oil will be competing for the Alberta's supply of crude oil first exceeded its demand same markets, some form of control may be necessary for in 1950 and a plan was introduced to divide the available oil-sand production unless new market areas are developed market among all producing wells in the province. Under exclusively for this production. this proration system, the total demand is determined from purchasers' nominations each month. A well's share of Alberta Government Policy the market is composed of two parts: an economic allow­ The Alberta Government has concluded that it has "an ance and a prorated share. The economic allowance is obvious responsibility to regulate the timing and extent designed initially to payout drilling and completion costs, of oil sands production to protect the interests of the after which it is reduced to a rate which will pay the public as owners of this resource, and to ensure that the operating costs of the well. The prorated share of the position of conventional oil production in Alberta is not allowable is based on the well's Maximum Productive Rate jeopardized by the loss of already limited markets to a (MPR), which is approximately equivalent to the MER. new source of supply". The policy contains four major

points: Downloaded from http://onepetro.org/JPT/article-pdf/15/05/479/2214045/spe-517-pa.pdf by guest on 29 September 2021 Supply and Demand For such production from the oil ,;and, as may he ahl" Historical data and forecasts of supply and demand for to reach markets clearly beyond present or forseeable reach of Alberta's conventional industry there is no need to reo Alberta crude are shown in Figs. 4, 5 and 6. Fig. 4 shows strict the rate of production from the oil sands. the historical trend of virgin and remaining reserves since For such oil sands production as would he in competition 1952 and includes the Conservation Board's forecast for with present or forseeable markets for conventionally pro· these reserves up to 1975. Net reserves are forecast to duced Alberta crude oil, the impact on the conventional reach a peak in 1970 and to show a slight decline there­ industry will be carefully considered. In this installf,e, the government's judgment is that the best interests of the after. province will be served (a) in the initial stages of oil Fig. 5 shows the history and the Board's forecast of sands development by restricting production to some 5 per cent of the total demand for Alberta oil; (b) as market productive capacity and total demand up to 1975. The growth enables the conventional industry to produce at a total demand for Alberta oil is forecast to increase at greater proportion of its productive capacity, by permitting about the same average rate as it has in the past 10 years. increments in oil sands production as recommended by the The productive capacity, in line with the declining net Oil and Gas Conservation Board, and on a scale and so timed as to retain incentive for the continued growth of the reserves, shows a peak in 1972 and begins to level off. comentional industry; and (c) by relating the scale and Fig. 6 shows production as a per cent of capacity to timing of increments of oil sands production to the years produce and the life index (the number of years of re­ of remaining proven supply of conventional oil allowing the index to decline gradually from present levels hut ensuring maining oil supply) is plotted for the same period. Assum­ that it does not decline below 12 to 13 years.'o ing no oil-sand production for this period, the 1975 total demand of 900,000 BID represents a rate equal to 69 per Impact of Proposed Development cent of the productive capacity of the province. Increasing The impact of the Great Canadian Oil Sands' project production rates and constant or decreasing productive to product 31,500 BID by 1966 will be a minor displace­ capacity could mean that Alberta oil wells would not be ment of some conventional production. The Conservation able to supply peak demands usually occurring during the Board's estimate of the total demand for Alberta oil in winter months. Peak demands are usually 25 per cent 1966-when the Great Canadian Oil Sands' plan is sched­ higher than the yearly average demand. The life index­ uled to go into full production-is 560,000 BID. Thus, about 22 years in 1962-is forecast to decline to about 12 oil-sands production would represent about 5.6 per cent years by 1975. of the total demand. The total productive capacity for This forecast suggests that some additional oil supply Alberta wells is estimated to be 1,120,000 BID. Oil-sands may be needed to supply an expanding market. production in 1966 would reduce the production rate from about 50 per cent of total capacity to about 47

75,Or------, per cent.

70r--~------, g1500 ffi 1250 a. 24 tJJ ..J 22 ~IOOO 0: :i:l ~40 20 U) ~ 75 w 0: U .. tJJ 0: o w 18 ~ z ""30 ~5 ::> 16 o I f- 20

10 12 1~~52,--.19t.5~5,----1~9~60n---~19~6~5---~1~97~o~---d1975 YEAR 0~1~95~2,-~19~55.----~19~60n---~19~65O--~~19~70~-----I~~~ Fig. 5-Productive capacity and demand for Albe'rta YEAR crude oil. Fig. 6--Trends related to production of Alberta crude oil.

482 JOURNAL OF PETROLEUM TECHNOLOGY The government's policy assures production of conven­ 7. "Alberta Technical Committee Report" (Aug., 1959), Oil and tional wells at an increasing percentage of productive Gas Conservation Board. capacity. Implementation of the government's position S. "Oil and Gas Conservation Board Report" (Nov., 1960) Re: will mean that future oil-sands production must be sched­ Great Canadian Oil Sands Ltd., Oil and Gas Conservation uled to comply with the existing policy; but allowances Board. must be made to encourage development of oil sands to 9. "Oil and Gas Conservation Board Report" (Sept., 1962) Re: Great Canadian Oil Sands Ltd., Oil and Gas Conservation supplement declining conventional reserves. Board. Anticipating future reserves shortages, the task of intro­ 10. "Oil Sands Poliey", Text of Statement by Premier E. C. ducing a new supply into an already limited market will Manning (Oct., 1962). *** not be easy. However, the combination of the reserves from both sources will continue to make Alberta a prin­ cipal supplier of crude oil.

Acknowledgment The authors wish to express their thanks to the Oil and Gas Conservation Board for permission to release the

paper and to members of the staff for their assistance in Downloaded from http://onepetro.org/JPT/article-pdf/15/05/479/2214045/spe-517-pa.pdf by guest on 29 September 2021 preparing this paper.

References 1. Carrigy,.I\1. A.: "Geology of the McMurray Formation, Part III, General Geology of the McMurray Area", Research Council of Alberta, Geol. Div., Memoir 1, Alberta Queen's Printer, Edmonton (1959). V. E. BOHME (right) has been chief development engi­ 2. Pow, J. R.: Personal correspondence. neer for Alberta's Oil & Gas Conservation Board since 3. "Application to the Alberta Oil and Gas Conservation Board 1959. He has worked in various engineering and adminis­ for Approval of a 'Scheme for Recovery of Oil from the Oil Sands", Shell Oil Co. of Canada, Ltd. trative positions with the Board since graduating in 1950 4. Clark, K. A.: "Athabasca Oil Sands, Historical Review and from the U. of Alberta with a BSc in petroleum engineer­ Summary of Technical Data", Research Council of Alberta, ing. L. A. BELLOWS (left) is northern district engineer for Contribution 69, Edmonton Geological Society Quarterly the Oil & Gas Conservation Board and is responsible for (1957) 1, No.1 and 2. the operation of its four field offices in . 5. Blair, S. M.: "Report on the Alberta Bituminous Sands", He received a BSc degree in from Government of Alberta (1950). 6. Proc., Athabasca Oil Sands Conference (Sept., 1951), Gov­ the U. of Alberta in 1952 and since graduation has been ernment of Alberta. employed by the Board in several field capacities.

MAY, 1963 483