Study No. 164 March 2017 CANADIAN ENERGY ECONOMIC POTENTIALS AND EFFICIENCIES OF OIL RESEARCH SANDS OPERATIONS: PROCESSES AND TECHNOLOGIES NSTITUTE I Canadian Energy Research Institute | Relevant • Independent • Objective ECONOMIC POTENTIALS AND EFFICIENCIES OF OIL SANDS OPERATIONS: PROCESSES AND TECHNOLOGIES Economic Potentials and Efficiencies of Oil Sands Operations: Processes and Technologies Authors: Experience Nduagu Alpha Sow Evar Umeozor Dinara Millington ISBN 1-927037-49-2 Copyright © Canadian Energy Research Institute, 2017 Sections of this study may be reproduced in magazines and newspapers with acknowledgement to the Canadian Energy Research Institute March 2017 Printed in Canada Front photo courtesy of Jeremy Seeman Acknowledgements: The authors of this report would like to extend their thanks and sincere gratitude to all CERI staff involved in the production and editing of the material, including but not limited to Allan Fogwill and Megan Murphy. The authors would also like to thank the following for their support as well as providing technology information: Technology vendors, innovators and oil Ahad Sarraf Shirazi, Process Ecology sands producers Dr. Denis Westphalen, Nexen Energy Canada’s Oil Sands Innovation Alliance Dr. Subodh Gupta, Cenovus Energy Inc. Joy Romero, CNRL Professor Ian Gates, University of Calgary Alberta Innovates Energy and Environment Dan Burt, Suncor Energy Solutions Bernard Chung, Valence Energy Corp. Calgary Innovates Dr. Liming Liu, Value Creation Natural Resources Canada Cameron Hardy, WorleyParsons ABOUT THE CANADIAN ENERGY RESEARCH INSTITUTE – CANADA’S VOICE ON ENERGY The Canadian Energy Research Institute is an independent, not-for-profit research establishment created through a partnership of industry, academia, and government in 1975. Our mission is to provide relevant, independent, objective economic research in energy and environmental issues to benefit business, government, academia and the public. We strive to build bridges between scholarship and policy, combining the insights of scientific research, economic analysis, and practical experience. For more information about CERI, visit www.ceri.ca CANADIAN ENERGY RESEARCH INSTITUTE 150, 3512 – 33 Street NW Calgary, Alberta T2L 2A6 Email: [email protected] Phone: 403-282-1231 Economic Potentials and Efficiencies of Oil Sands Operations: iii Processes and Technologies Table of Contents LIST OF FIGURES ............................................................................................................. v LIST OF TABLES ............................................................................................................... vii ABBREVIATIONS ............................................................................................................. ix EXECUTIVE SUMMARY .................................................................................................... xi Key Findings ....................................................................................................................... xv CHAPTER 1 INTRODUCTION ........................................................................................ 1 Objectives and Scope ......................................................................................................... 4 CHAPTER 2 IN SITU OIL SANDS TECHNOLOGIES ........................................................... 5 In Situ Oil Sands Process Segments ................................................................................... 5 Water/Wastewater Treatment Segment ..................................................................... 6 Oil and Water Separation ...................................................................................... 7 Water Treatment ................................................................................................... 7 Emerging Water/Wastewater Treatment Technologies for the Oil Sands ............ 10 Steam Generation Segment ......................................................................................... 17 Challenges in the Steam Generation Segment ...................................................... 18 Emerging Technologies for Steam Generation ...................................................... 19 Reservoir Segment ....................................................................................................... 26 Pure Solvent Processes .......................................................................................... 28 Steam-Solvent Processes ....................................................................................... 29 Electromagnetic Heating Processes ....................................................................... 31 Others .................................................................................................................... 33 Upgrading Segment ..................................................................................................... 34 Pipelines and Transport Segment ................................................................................ 41 Business Management and Analytics Segment ........................................................... 41 Business Management and Analytics Technologies Segment ..................................... 43 Wells and Well Pads Segment ..................................................................................... 48 Lean Manufacturing to Lean Drilling ..................................................................... 48 Modularization ....................................................................................................... 49 CHAPTER 3 STUDY APPROACH .................................................................................... 51 Data Sources ...................................................................................................................... 51 Methodology and Assumptions ......................................................................................... 51 Bitumen Extraction: SAGD Base Case ......................................................................... 51 Technology Assessment ..................................................................................................... 54 Water Treatment Technologies ................................................................................... 54 Steam Generation Technologies .................................................................................. 55 Reservoir Technologies ................................................................................................ 55 Upgrading Technologies .............................................................................................. 55 Business Management and Data Analytics .................................................................. 56 March 2017 iv Canadian Energy Research Institute CHAPTER 4 RESULTS ................................................................................................... 57 Bitumen Supply Costs ........................................................................................................ 57 GHG Emissions from Bitumen Production ......................................................................... 60 Optimal Technology Configurations .................................................................................. 62 Brownfield Facility Configuration ................................................................................ 63 Greenfield Facility Configuration ................................................................................. 65 Overview of Results from Technologies Assessed ....................................................... 66 Upgrading ..................................................................................................................... 67 Oil Sands Production Growth............................................................................................. 69 Oil Sands Emissions Profile ................................................................................................ 73 Costs and GHG Emissions Minimization Objectives .......................................................... 74 CHAPTER 5 CONCLUSIONS .......................................................................................... 77 Key Findings ....................................................................................................................... 77 Bitumen Production Supply Cost and GHG Emissions ....................................................... 78 Optimal Technology Configurations .................................................................................. 80 Supply Costs and GHG Emissions ....................................................................................... 82 Upgrading .......................................................................................................................... 83 Oil Sands Emissions Profiles and the 100 MtCO2 Emissions Cap ...................................... 84 APPENDIX ADDITIONAL ASSUMPTIONS AND METHODOLOGIES ................................. 87 Theoretical Framework: Economic Theory of Carbon Policy and Innovation .................. 87 Alberta Innovation Ecosystem ........................................................................................... 89 CAPEX and OPEX ................................................................................................................ 92 SAGD Base Case Capital Cost ............................................................................................