ONTARIO 01 2008 EDITION PUBLISHED FOR THE ONTARIO PETROLEUM INSTITUTE EXECUTIVE DIRECTOR Joe Van Overberghe 555 SoutMale Road East , Suite # 104 london ON N6E 1A2 Canada T: 519 680 1620 F: 519 680 1621 E: opi@ontpet .com www.ontpet.com FOR JUNEWARREN PUBLISHING PRESIDENT & CEO Bill Whitelaw bwhltelaw@Junewarren,com PUBLISHER Agnes Zalewski azalewski@junewarren,com MANAGING EDITOR - EDMONTON Chaz Osburn [email protected] ART DIRECTOR Bill Harris [email protected] STAFF PHOTOGRAPHER Joey Podlubny JPodlubny@junewarren,com GRAPHIC DESIGNERS Tony Konkolus [email protected] Rachel Dash -Will iams rdwill iams@ju newarren,com Nina Worby [email protected] CREATIVE SERVICES Birdeen Jacobson , Rawan KemaJdean . Cathlene Ozubko, Aaron Parker production@junewarren,com AD TRAFFIC COORDINATOR- MAGAZINES Alanna Staver [email protected] PROOFREADING SUPERVISOR Rianne Stewart rstewart@junewarren ,c om COPYEDITING AND PROOFREAD ING Joseph Caouette. Mansa Kurlovich , Elizabeth Mclean. Stepha me Sparks, Kelley Stark proofing@junewarren ,com CORPORATE ACCOUNT MANAGER Diana Signorile dsignorile@junewarren ,com SENIOR MARKETING COORDINATOR Alaina Dodge Foulger [email protected] MARKETING DESIGNER Cristian Ureta [email protected] ~ JuneWarren PUBLISHING junewarren.com Return undeliverable Canadian addresses to 6111- 91 Street NW Edmonton, AB T6E 6V6 Canadian Publications Ma il Product Agreement: If 40069240 ~ AnnivErsAry of tHE Pirst CommErciAl Oil WEll July & August 2008 Oil SpringsoLAmbton CountyoOntAriooCAnAdA www.2008celebrate.com www.oilsprings.ca www.lambtononline .com/oil_museum \?--~ANl( ~\. ~ COUNTY OF LAMBTON WELCOME A Message from the Minister of Natural Resources t is a pleasure to convey my best regards to Ontario Oil & Gas magazine, a publi­ I ca tion that provides valuable opportunities for readers to stay in touch with the emerging trends and technologies of your industry. The oil and gas sector is an important contributor to Ontario's economy. This year marks a significant milestone for the industry in Ontario as it celebrates 150 years of pumping commercial crude oil in southwestern Ontario. Last year, Ontario's oil and natural gas production was valued at almost $150 million; hydrocarbons, which were stored in our underground storage reservoirs, were valued at $3 billion; and salt produced from solution mining operations was valued at $40 million. Your industry has a long history of impressive accomplishments in the province, and there are many exciting and innovative opportunities on the horizon. For example, T understand that your industry is using horizontal drilling technology to access oil resources beneath the waters of Lake Erie, as well as 3-D seismic to loca te previously undiscovere d reservoirs of oil and natural gas. These innovative opera­ tions demonstrate that your industry is lead ing the way in creating high-value jobs and opportunities right here in Ontario. I know that the Ontario Petroleum Institute is working very closely with my ministry's Petroleum Resources Centre in London, Ont., on revisions to Ontario regulation 245/97 under the Oil, Gas and Sa lt R esources Act. The Ministry of Natural Resources will continue to work in partnership with the oil and gas industry as we sustainably manage this vital natural resource for the benefit of all Ontarians. - Donna Cansfield Ontario Minister of Natural Resources ONTARIO OIL & GAS JUN E 2008 5 WHAT IS C02 SEQUESTRATION? presence of a suitable impermeable cap rock, a pressure and In simple terms, sequestration of carbon dioxide is the temperature regime suitable for injection and storage of C02 capture of C02 from anthropogenic sources before it can be in a "supercritical" or liquid phase, proximity to large point released into the atmosphere, or the removal of C02 directly sources of C02 emissions, and a well-characterized migra­ from the atmosphere, coupled with permanent storage of the tion route for the sequestered gas. Potential risks must also be captured C02 to keep it isolated from the atmosphere. The characterized, with special attention paid to seismic activity, world's natural carbon cycle removes large amounts of C02 faults, fractures, and unplugged wellbores that could provide from the atmosphere (e.g. photosynthesis, mineral weath­ a pathway for C02 to escape to the surface and any effects on ering, dissolution in seawater), but at a rate insufficient to proven and potential oil and gas reservoirs. match the increased emissions due Given the geologic conditions to human activity. encountered in southern Ontario, Numerous strategies have C02 will exist as a liquid below a been proposed to remove more depth of approximately 865 m. This C02 from the atmosphere. We can is desirable because as a liquid it use natural terrestrial processes will more readily mix and dissolve such as no-till farming to increase in water and it takes up much less carbon content in the soil or tree volume than as a gas. This minimum planting to increase C02 capture depth also helps ensure that there is by photosynthesis. We can use sufficient rock above the injection mineral carbonation reactions interval to act as an impermeable with magnesium silicate minerals seal. This is important since the (ultramafics) to remove C02 from liquid C02 is less dense than water exhaust gases at thermal power and will rise to the top of the porous plants. We can inject C02 into deep interval in the saline aquifer. ocean basins where high pres­ sure and cold temperature will Is THE GEOLOGY OF ONTARIO sequester the C02 as a liquid phase WELL !)UITED FOR GEOLOGIC on the ocean floor. One of the most SEQUESTRATION OF C02? promising strategies is geolog­ Four major sedimentary basins occur ical sequestration of the carbon within Ontario. In northern Ontario, dioxide in deep underground rock sedimentary rocks occur within, the formations, also known as carbon Moose River and Hudson Bay basins capture and storage (CCS). but these basins tend to be too shallow CCS is a technical process for carbon dioxide storage. They are that involves capturing C02 from also remote from large point sources of large point sources, purifying the C02 emissions and thus are presently emissions to maximize the C02 impractical for consideration as candi­ content, and transporting the C02 dates for geological sequestration. to a storage site where it is injected, Southern Ontario is located using a specially constructed well, Potential CCS spin-off benefits for the Ontario petroleum on the edge of two of the largest into deep geological formations industry include enhanced oil recovery from known sedimentary basins in eastern reservoirs. for permanent storage. Once it is North America, the Michigan injected into these rocks, it reacts over very long periods of time and Appalachian basins, containing thick accumulations with mineral components and fluids in the rocks to form stable of sedimentary rocks. Rocks within these basins were compounds that permanently trap the C02. Several variations originally horizontal, but have subsequently tilted and on CCS are proposed and include injection into: depleted oil deformed forming a northeast-trending ridge known as the and gas reservoirs; geological structures such as salt dOjTIes, Algonquin Arch. Because of this, the thickness of the rocks coal beds, organic shale beds, and depleted reservoirs; oil increases westerly into the Michigan Basin and southerly reservoirs for enhanced oil recovery; and saline aquifers. Also into the Appalachian Basin, reaching a maximum thick­ proposed is storage in solution-mined salt caverns. Research ness of about 1,400 m beneath Lake Erie and at the southern indicates that the volume of pore space available in deep saline tip of Lake Huron, and much greater thicknesses beneath aquifers far exceeds that of enhanced oil recovery projects and the neighbouring U.S. states. Extensive development of depleted hydrocarbon reservoirs, and offers perhaps the best porosity and permeability is evidenced by the presence of potential for C02 sequestration in the landlocked areas of the oil and gas reservoirs and regional saline water aquifers in world. Numerous estimates suggest that global storage capacity these basins. is sufficient to accommodate at least 150 years of the world's There are several geologic options for C02 sequestration total annual anthropogenic emissions. in Ontario. Saline aquifers, oil and gas reservoirs, and solu­ Saline aquifers are deep formations of porous and perme­ tion-mined salt caverns, all located within the Michigan and able rock that contain salt water in the pore spaces and, in Appalachian basins in southern Ontario, have the best near­ Ontario, are located below the deepest sources of potable term potential. There is also longer-term potential for use of water. In addition to porosity and permeability, other impor­ mineral carbonation reactions with ultramafic rocks in the tant characteristics of the storage formation include the extensive Canadian Shield rocks of northern Ontario. ~ ONTARIO OIL & GAS JUNE 2008 7 Saline aquifers offer the la rgest storage capacity in Onta ri o. (EOR). The C02 repressurizes the reservoir a nd mixes w ith Sa line aquifers occur w ithin the sedimentary bedrock in the remaining oil, m aking it less viscous and more mobile. the basins of southern O nta ri o and Hudson Bay, genera ll y This results in recovery of additional oil that would have been at depths greater than a few tens of metres and loca ted left behind by conventional production me thods. Studies below a nd isolated from fr eshwater aquifers. Wa ters w ithin show that most of the C0 2 rem a ins in the reservoir. There a re these deep aquifers contain elevated concentrati ons of salt presently no EOR projects in Onta ri o due la rgely to lac k of a and sulphur a nd a re genera ll y not cheap local sou rce of C0 2. suitable for drinking, irrigation, C0 2 ca n also be injected into or other domesti c purposes. solu ti on-m i ned sa It caverns for While most of the other _ DRIFT both perma nent and tempora ry sedime nta ry formations are z D SANDSTONE storage.