ALBERTA O I L S A N D S INDUSTRY Q U A R T E R L Y UPDATE WINTER 2009/2010 Reporting on the period: Sept. 5 to Dec. 11, 2009 2 ALBERTA OIL SANDS INDUSTRY QUARTERLY UPDATE Oil Sands Deposit 100 KILOMETRES Inferred Oil Sands Deposit 10 20 30 40 50 60 70 80 90 100 Heavy Oil Deposit Alberta has the second-largest deposit as 80 per cent of Alberta’s bitumen Grosmont Carbonate Triangle All about of oil in the world—only Saudi Arabia deposits are too deep underground to Mapping can claim a larger stockpile of crude. economically employ this technology. First Nations But 170 billion of Alberta’s 179 billion the oil sands Right now there are essentially two the oil sands barrels of oil have the special quality Metis Settlement commercial methods of in situ (Latin for of being bitumen, a resource that has Background of an “in place,” essentially meaning wells are Canada’s heavy oil and oil sands been developed for decades but is only National Park used rather than trucks and shovels). resources are often referred to important global now coming into the forefront of the In cyclic steam stimulation (CSS), global energy industry, as conventional as “the oil that technology made.” resource high-pressure steam is injected into Provincial Park supplies—so-called “easy” oil— Without intensive production directional wells drilled from pads for a continue to be depleted. The figure of technology development, the period of time, then the steam is left to 170 billion barrels represents what is soak in the reservoir for a period, melting industry would not exist as it considered economically recoverable the bitumen, and then the same wells does today. These technologies with today’s technology, but with new are switched into production mode, still continue to be advanced and technologies, this reserve estimate bringing the bitumen to the surface. could be increased to as much as 315 optimized, improving recovery and billion barrels. In steam assisted gravity drainage reducing environmental impacts. (SAGD), parallel horizontal well pairs There are three major bitumen (or are drilled from well pads at the surface. oil sands) deposits in Alberta. The One is drilled near the top of the target largest is the Athabasca deposit, reservoir, while the other is drilled near ALBERTA’S INDUSTRIAL HEARTLAND located in the province’s northeast in its bottom. Steam is injected into the COUNTY OF THORHILD NO. 7 the Regional Municipality of Wood top well, a steam chamber forms, and Buffalo. The main population centre Redwater TABLE OF CONTENTS via gravity, the melted bitumen flows of the Athabasca deposit is the City of into the lower well and is pumped to the LAMONT Fort McMurray. The second-largest COUNTY surface using artificial lift. oil sands deposit is referred to as Cold All about the oil sands STURGEON 02 Background of an important global Lake, just south of Athabasca, with the Both SAGD and CSS are used in the COUNTY resource main population centre the City of Cold Cold Lake and Peace River deposits, INDUSTRIAL Bon Accord Lake. The smallest oil sands deposit is while SAGD is the in situ technology of Gibbons HEARTLAND Mapping the oil sands known as Peace River, which is located choice in the Athabasca deposit. The Bruderheim 03 in northwest central Alberta. A fourth choice is based on a number of things deposit called Wabasca links to the including geology. The technologies Lamont Government update Athabasca and is generally lumped in combined currently produce just over 04 with that area. one million barrels per day. FORT The existence of bitumen in Alberta has Research is underway on a number of SASKATCHEWAN NEWS: been known for a long time. The first other production technologies designed 06 What’s new in the oil sands mention of it in Canadian history was to optimize production and minimize STRATHCONA COUNTY Key updates from winter 09/10 in 1719, when a Cree named Wapasu water and energy use, including vapour EDMONTON brought a sample of the “gum” to a extraction (VAPEX), and a form of in ELK ISLAND NATIONAL PARK Project listings Hudson’s Bay trading post. First Nations situ combustion known as toe to heel air 09 Updated status of oil sands in what is now the Wood Buffalo area injection (THAI). projects in Alberta had traditionally used the bitumen, Bitumen that has not been processed, Sherwood which seeps from outcrops along the Park or “upgraded,” can be used directly as COOKING LAKE Athabasca River, to waterproof their BLACKFOOT PROVINCIAL Glossary of oil sands terms asphalt. It must be diluted to travel by RECREATION AREA canoes. 15 pipeline. Adding value, some producers Today bitumen is produced as an upgrade their product into synthetic BEAVER energy source by two means—mining crude oil (SCO), which is a refinery COUNTY and in situ. The majority of oil sands feedstock. At these refineries it can be LEDUC COUNTY production is done by surface mining, transformed into transportation fuels ■ All photos © 2010, but this will likely change in the future, and other products. Alberta’s Industrial Heartland is over 78,550 acres in size, and is located in the JuneWarren-Nickle’s Energy Group northeast quadrant of the Greater Edmonton region in central Alberta. This region is key to the value-added processing of Alberta’s oil sands resources into higher valued refined petroleum products and petrochemicals. 4 ALBERTA OIL SANDS INDUSTRY QUARTERLY UPDATE ALBERTA OIL SANDS INDUSTRY QUARTERLY UPDATE 5 library/8236.pdf. The action plan supports the goals which initially received $8.8 million in provincial Other information Government update and directions outlined in Alberta’s renewed Water for funding in March through the Alberta Energy Research Life strategy, found at http://environment.gov.ab.ca/ Institute toward its $30-million demonstration project sources of interest info/library/8035.pdf. The renewed Water for Life to turn deep coal seams into synthetic natural gas, will action plan emphasizes three priorities: healthy aquatic replicate its successful large-scale project. The project ecosystems, conservation, and education. will supply enough syngas to create 300 megawatts of An Alberta project that uses CO2 to enhance power generation. The captured CO will be used for The plan lays out the actions Alberta intends to deliver 2 coalbed methane extraction received enhanced oil recovery. GOVernment policy over the next decade. It includes activities Alberta an international award from the Carbon Value-added strategy committed to deliver as part of its original Water for No funds will be distributed to these projects until grant Sequestration Leadership Forum (CSLF) on On Oct. 20 and 22, 2009, the Alberta government Life strategy and incorporates new actions to address agreements are signed. Oct. 13 in London, England. hosted workshops in Edmonton and Calgary with the province’s emerging water challenges and current Alberta’s committed funding toward commercial-scale The Alberta Enhanced Coalbed Methane invited industry representatives to review the findings realities. The action plan also supports regional greenhouse gas emission reduction is approximately Recovery Project, led by the Alberta Research of the recently completed Alberta Midstream Chemical environmental objectives and Alberta’s cumulative $1.96 billion, leading to emission cuts of approximately Council, was completed in 2008. The project Cluster Site Requirement Study. The study assessed effects management approach. five million tonnes annually beginning in 2015. CCS involved injecting CO2 into deep, unminable the land use, infrastructure, and logistics requirement For a copy of the renewed action plan and strategy, visit projects support the provincial energy strategy to coal beds, displacing the underground methane for the development of a purpose-built world-class www.waterforlife.alberta.ca. enhance clean energy production through energy with CO2. The process reduces greenhouse gas midstream chemical cluster in Alberta’s Industrial technology leadership. emissions while also enabling greater recovery Heartland area using oil-based feedstocks. Research and technology of coalbed methane. Climate change The study is a critical piece in the development of the Carbon capture and storage Environment Minister Rob Renner met in November Alberta Energy Minister Knight accepted the business case to see the creation of a cluster complex in The Alberta government has moved onto the global with key U.S. environmental, policy, and industry award on behalf of the Alberta Research Council the Greater Edmonton Area to enhance the value of the oil stage with the signing of letters of intent for projects leaders in California to share Alberta’s efforts to at the awards event, which also recognized sands resource through the production of refined products with Shell Canada, TransAlta Corporation, Enhance advance greener energy production and discuss general three other projects. The awards were part of a and petrochemicals for local and export markets. Energy, North West Upgrading, and Swan Hills Synfuels environmental issues. three-day conference hosted by the CSLF. The feedback received from industry during these to implement large-scale carbon capture and storage The Nov. 18–20 mission showcased Alberta’s efforts A second Alberta project, co-led by ARC workshops provides government with direction (CCS) technology. Two of these projects, Shell and in pioneering game-echanging technologies for clean Resources Ltd. and the Alberta Research on action items to move the strategy forward. A Enhance Energy, are specific to oil sands development. energy development, such as CCS. It also helped the Council, was endorsed by the CSLF during presentation of the study findings can be found at The letter of intent with Shell Canada Energy, on behalf province gain a better understanding of California’s its meetings. The Industrial Heartland area www.energy.alberta.ca/petrochemical/pdfs/ of the Athabasca Oil Sands Project, will provide $745 environmental policies.