Oil sands
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RAND Study Concludes Oil Sands Synthetic Crude Can Be Cost-Competitive with Conventional Petroleum Even Over a Wide Range of CO2 Prices
October 12, 2008
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| Estimated unit costs of SCO from steam-assisted gravity drainage (SAGD) with upgrading, with and without CCS, and of conventional crude oil in 2025, versus different costs of CO2 emissions. Click to enlarge. Source: RAND |
A new report from RAND concludes that in 2025, synthetic crude oil (SCO) produced from oil sands can have a cost advantage over conventional petroleum at a wide range of CO2 prices, even though it is more CO2-intensive (15-20% on a life-cycle basis). Coal-to-Liquids (CTL) transportation fuels can also be cost-competitive with conventional petroleum, although the degree of cost-competitiveness is more sensitive to the price of oil and the CO2 emission cost, the report says. CTL fuels can be approximately twice as CO2-intensive on a full life-cycle basis as conventional petroleum fuels.
Current methods for oil sands production require large quantities of water and can harm local water quality, the report notes. Development of oil sands can also cause large-scale disturbances of land and habitat. Both resources also represent potentially significant sources of carbon dioxide emissions. The study was funded by the National Commission on Energy Policy.
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UOP, Albemarle and Petrobras to Cooperate on Catalytic Crude Upgrading for Heavy Oils
October 03, 2008
UOP LLC, Albemarle and Petrobras have signed a technology cooperation agreement to demonstrate and further the commercialization of UOP’s Catalytic Crude Upgrading (CCU) process technology. UOP developed the CCU process in 2005 as a cost-effective option to upgrade heavy crude oils and bitumen-derived crude.
Under the agreement, UOP will provide the technology, equipment and system design. Albemarle will provide an improved Fluid Catalytic Cracking (FCC) catalyst to be used in the process. Petrobras, which has already run the process in its pilot plant, will offer knowledge and experience with FCC catalyst as well as heavy crude processing.
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Argonne and KPM Developing New Efficient Process for Extracting Hydrogen from Hydrogen Sulfide in Unrefined Petroleum, Including Oil Sands
August 26, 2008
Researchers at the US Department of Energy’s Argonne National Laboratory and Kingston Process Metallurgy Inc. (KPM) of Kingston, Ontario are developing a new process to extract and reuse pure hydrogen from the hydrogen sulfide that naturally contaminates unrefined oil, including oil sands. The hydrogen can then be used to upgrade and clean crude oil and petroleum products and aid in a number of refining processes.
The process uses a molten copper reactor invented by Argonne and KPM researchers. Hydrogen sulfide gas is first separated from the crude oil stock in the reactor, using technology already in place. This gas is then bubbled though molten copper, which releases pure hydrogen, which is captured. As the sulfur reacts with the copper, the copper is gradually turned into copper sulfide.
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Report Assesses Energy and Carbon Efficiency of Canadian Oils Sands Projects
July 30, 2008
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| Oil sands projects vary widely in carbon intensity. Click to enlarge. |
Trucost Plc, an UK-based environmental research company, has analyzed carbon data from Canadian oil sands projects to identify which oil producers are more exposed to financial risk from energy and carbon costs. Oil sands production is, in general, 3-4 times more carbon intensive than conventional oil production, reflecting the large amounts of natural gas and other fossil fuels burned during the production process.
While energy and carbon efficiency is improving in the oil sands industry, carbon intensity varies widely among projects. The carbon intensity of eight projects analysed by Trucost ranges from 9 kg CO2e per barrel of oil produced up to 106 kg CO2e per barrel. The average was 76 kg CO2 per barrel. This intensity correlates with energy costs and potential profitability of each company’s oil sands operation.
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TransCanada Announces $7B Expansion to Keystone Pipeline Project; Capacity Could Reach 1.5M Barrels per Day
July 17, 2008
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| The existing Keystone pipeline project and the Keystone XL expansion project. Click to enlarge. |
TransCanada Corporation, on behalf of the Keystone Pipeline partnerships (Keystone) between TransCanada and ConocoPhillips, plans to expand the still-to-be-completed Keystone crude oil pipeline system project (earlier post) to provide additional capacity of 500,000 barrels per day from Western Canada directly to the US Gulf Coast by 2012.
The expansion (“Keystone XL Pipeline Project”) is expected to cost approximately US$7.0 billion. When completed, the expansion will increase the commercial design of the Keystone Pipeline system from 590,000 barrels per day to approximately 1.1 million barrels per day and result in a total capital investment of approximately US$12.2 billion.
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US Conference of Mayors Calls for Fuel Life-Cycle Analyses; Halt to Purchasing of Oil Sands-Derived Fuels
June 25, 2008
At its 76th Annual Meeting in Miami, Florida (20-24 June), the US Conference of Mayors adopted a resolution encouraging the use of life cycle analyses that evaluate the greenhouse gas emissions from the production—including extraction, refining, and transportation—of fuels, including unconventional and synthetic fuels.
The resolution further encouraged mayors to track and reduce the lifecycle carbon dioxide emissions from their municipal vehicles by preventing or discontinuing the purchase of higher-carbon unconventional or synthetic fuels for these vehicles. The resolution specifically names fuels derived from unconventional sources, such as oil sands, coal to liquids and oil shale as examples.
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Alberta Oil Sands Output Estimated to Increase Almost 2.5x by 2017
June 06, 2008
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| The ERCB is projecting the production of synthetic crude oil from bitumen to almost triple over the forecast period. Click to enlarge. |
Annual production of non-upgraded bitumen and synthetic crude oil from Alberta’s oil sands will increase almost 2.5 times by 2017 from 2007 levels, according to the just-published report Alberta’s Reserves 2007 and Supply/Demand Outlook 2008-2017 by the province’s Energy Resources Conservation Board (ERCB).
In 2007, Alberta produced 209,900 m3 (1.32 million barrels) per day of bitumen from the oil sands, a 5% increase from 2006. Alberta raw bitumen production is expected to increase to 513,000 m3 (3.2 million barrels) per day by 2017, based on announced expansions of existing projects and new projects.
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Ivanhoe Energy to Acquire Oil Sands Assets; First Commercial Application of HTL Upgrading Technology
May 30, 2008
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| HTL processing in High Quality mode. Vacuum tower bottoms (VTBs) are routed to the Reactor where thermal cracking takes place. Upgraded VTBs (product) are quenched at the exit of the Reactor Cyclone and routed to the Atmospheric Distillation Unit where distillate and lighter material is sent to product tank and blended with straight run gas oils. Atmospheric bottoms are recycled to the front end of the Vacuum unit to separate VGO and lighter material. VTB’s can be recycled to extinction depending on the site specific energy requirements. Click to enlarge. |
Ivanhoe Energy Inc. has signed a preliminary agreement with Talisman Energy Canada to acquire all of Talisman’s interests in three leases located in the heart of the Athabasca oil sands region in Alberta, Canada. The transaction will enable the first commercial application of Ivanhoe Energy’s proprietary HTL heavy-oil upgrading technology in a major, integrated heavy-oil project.
HTL is a field-located upgrading process that converts heavy oil to a transportable, partially upgraded synthetic crude oil and converts the upgrading byproducts to onsite energy. The process frees the heavy oil producer from the need to purchase diluent for transport, significantly eliminates the need to purchase natural gas to steam the reservoir, and allows the producer to capture the majority of the heavy oil-light oil value differential. In addition, a study by Enbridge in 2002 concluded that partial field upgrading of bitumen could reduce total greenhouse gas emissions by more than 20% from a generic Steam Assisted Gravity Drainage (SAGD) operation.
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Eni to Invest US$3B in Republic of Congo; Focus on Tar Sands and Palm Biodiesel
May 20, 2008
Italy-based oil and gas major Eni will invest US$3 billion in the Republic of Congo over the next four years, generating an expected equity production of 150 million barrels of oil equivalent from tar sands and biodiesel production.
Eni reached an agreement with the government for the exploration and exploitation of non-conventional oil in tar sands in Tchikatanga and Tchikatanga-Makola, two areas covering a total of 1,790 square km. According to preliminary studies undertaken on a 100 square km area, recoverable reserves are estimated at between 2.5 billion barrels unrisked and 500 million barrels risked.
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Titanium Corporation Receives Grant To Research Extraction of Hydrocarbons and Minerals from Oil Sands Tailings
March 30, 2008
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| Without recovery, oil sands production is projected to lose 30 million barrels per year of bitumen and naptha by 2015. Click to enlarge. |
Alberta Energy has awarded Titanium Corporation a C$3.5-million grant to research the value-added opportunities and environmental benefits of stripping out hydrocarbons and heavy minerals from oil sands tailings streams. Funding for this two-year project is being provided through Alberta’s C$200-million Energy Innovation Fund.
Titanium Corporation is a Canadian company that is developing a commercial process to maximize the value existing in waste material presently being deposited in Alberta’s oil sands tailings. Rather than channeling mine froth tailings into disposal areas, the mineral-rich stream is sent to a separation plant via pipeline where bitumen, titanium minerals, zircon and naphtha are to be recovered for commercial use. (Earlier post.)
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Government of Canada to Require New Oil Sands Operations to Implement Carbon Capture and Storage Starting in 2012
March 10, 2008
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| Projected reductions in the future growth of greenhouse gas emissions based on the Turning the Corner Plan. Click to enlarge. |
The Government of Canada has published details of its regulatory framework originally announced on 26 April 2007 to reduce greenhouse gas emissions. The newly published requirements include setting a target that will require oil sands starting operations in 2012 to implement carbon capture and storage.
Canada’s greenhouse gas emissions—to which the oil sands industry is a major and growing contributor—currently are more than 25% higher than they were in 1990, putting Canada more than 32% above its Kyoto target. Without immediate action, Canada’s greenhouse gas emissions are projected to grow a further 24% by 2020 to reach about 940 megatonnes—58% above 1990 levels.
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Suncor Board Approves C$20.6B Oil Sands Expansion
January 31, 2008
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| The diagram depicts the assets of the 200,000 bpd “Voyageur” expansion program; however, Voyageur will be operated on an integrated basis with existing operations. Click to enlarge. |
The Board of Directors of Suncor Energy gave final approval to a C$20.6 billion (US$20.7 billion) investment to boost crude oil production at the company’s oil sands operation, located north of Fort McMurray, Alberta, Canada, by 200,000 barrels per day (bpd) over its planned 2008 levels to reach 550,000 bpd in 2012.
The expansion plans include constructing four additional stages of in-situ bitumen production, a new upgrader (Suncor’s third) to convert that bitumen into higher-value crude oil, and various infrastructure and utilities.
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Schlumberger Acquires Raytheon Technology for Oil Extraction from Oil Shale and Oil Sands
January 23, 2008
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| Radio Frequency / Critical Fluid Oil Extraction Technology. Click to enlarge. |
Schlumberger, a leading oilfield services company, has acquired Raytheon’s technology for the extraction of oil from oil shale and oil sands. Financial details of the transaction were not disclosed.
The technology, developed by Raytheon and partner CF Technologies for oil shale processing, combines radio frequency (RF) technology from Raytheon with critical fluid (CF) technology from CF Technologies. (Earlier post.) Raytheon has projected that the same process could also be used to retrieve oil from Canadian oil sands and to reprocess spent wells.
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Discovery of Mechanism of Biodegradation of Crude Oil to Methane Could Lead to Cleaner Oil-Sands Production and Enhanced Energy Recovery from Oilfields
December 14, 2007
An international team of researchers has shown how anaerobic microbes in oil deposits around the world—including in unconventional sources such as the oil sands—naturally break down crude oil into methane in the reservoir.
Their discovery—published in the journal Nature—could lead to more energy-efficient, economic ways to extract difficult-to-recover energy from oilfields or heavy oil and oil-sands deposits.
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BP Moves Into Canadian Oil Sands with Husky Energy; Major Upgrade Planned at US Refinery
December 08, 2007
BP is moving into the Canadian oil sands by acquiring a half-share in the Sunrise field, located in the Athabasca oil sands in northeast Alberta, operated by Husky Energy. At the same time Husky will acquire a half share in BP’s Toledo oil refinery in Ohio, US, between them forming an integrated North American oil sands business. Two independent 50/50 joint ventures will be formed from the equally valued assets to own and develop the businesses.
The Sunrise oil sands field is expected to be sanctioned in 2008 with first production of bitumen in 2012, building to 200,000 barrels of oil a day (bpd) by the end of the next decade with a 40-year production plateau.
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Alberta Unveils New Royalty Plan for Energy Sector; 20% Increase Projected Over Current Levels
October 28, 2007
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| Alberta’s share from oil sands projects under the new royalty regime (hatched blue) compared to other countries. Click to enlarge. Source: Alberta Royalty Review Panel |
Saying that “Future generations of Albertans will receive a fair share from the development of their resources,” Alberta Premier Ed Stelmach last week unveiled the Canadian province’s new royalty regime for the energy sector. Under the New Royalty Framework, oil and gas royalties are expected to increase by C$1.4 billion in 2010, a 20% increase over currently projected revenues for that year.
Actual revenues will depend on future prices and production levels in the province. Therefore, the Alberta government’s annual budget development process will not change. The new royalty regime includes the following components:
