New Oil Sands Technique Holds Promise for Future Development of Vast Canadian Oilsands

A technological revolution is brewing in the Canadian oilsands which promises to make the vast fossil fuel resources both more economical and of higher quality. A partnership between Nexen Inc. and OPTI Canada has developed a way of substituting syngas from low quality bitumen in place of expensive natural gas, which is used to generate steam to soften bitumen so that it will flow to the surface. The bitumen is then upgraded and hydrocracked to a light synthetic crude oil.

Briefly, bitumen is steamed out of the earth, then processed to separate out the sand and water, as other steam assisted gravity drainage projects, then the water gets recycled back into steam.

Where Long Lake gets interesting is that the diluted bitumen then gets partially upgraded, and those products get further upgraded through a hydrocracker into light synthetic crude with low sulphur content, with the asphalt-like bits turned into synthetic gas. The gas is subsequently burned to produce the steam to produce the bitumen, and as a source of hydrogen for the hydrocracker that produces the synthetic crude. _CalgaryHerald

Combining the substitution of syngas-from-trash-bitumen for expensive natural gas plus the upgrading to low sulfur light synthetic crude, will vastly improve the economics of the entire oilsands venture.

Until Hyperion and other companies can provide small nuclear reactors to provide the steam and energy for harvesting oilsands and upgrading in situ, this new gasification process will probably be the frontrunner for oil sands development.

It is too bad that BP and Husky weren't in on the project. They will either have to play catch-up or get out of the game.