Toshiba Planning 4S Fast Neutron Reactor for Alberta Oilsands in 2020

An undisclosed Alberta oilsands operator is working with Toshiba to install a 10 MWe 4S nuclear reactor underground to use for in situ oilsands production by the year 2020.

The 4S reactor is a sodium-cooled fast neutron reactor operating at high temperature, capable of providing high temperature steam for steam assisted in situ oilsands production for 30 years between required refueling.

In situ oilsands production is generally cleaner and more profitable than oilsands mining.

In situ oil sands production means extracting bitumen from underground by drilling wells into the reservoir, as with conventional oil and natural gas production. This distinguishes in situ recovery from surface mining, which requires removing topsoil and other overburden and creating a large open pit mining area.

Steam-assisted gravity drainage (SAGD) is a specific form of in situ extraction. Nearly all bitumen is too viscous or thick at ambient reservoir temperature to flow on its own. It must be thinned, either through heating or by diluting it with solvents, or both. SAGD recovery involves drilling pairs of horizontal wells, one placed above the other in each pair. Steam is injected into the upper well. The steam heats the reservoir, thinning the bitumen which can then drain threw gravity to the lower well. The bitumen-water mixture (along with solvents, if applicable) is then pumped to surface.

Another common form of thermal recovery is cyclic steam stimulation (CSS). CSS or “huff-and-puff” uses vertical wells that alternate as both steam injectors and bitumen producers, creating a cycle of injection, heating and recovery from each vertical well. _Alberta Oilsands

Nuclear reactor production of steam -- particularly using a high efficiency reactor such as the 4S -- should also help profit margins. This will be particularly true as the cost of natural gas begins to climb inexorably higher with the projected greater number of uses for gas.

The firm [Toshiba] has completed a basic design for the reactor and has already started approval procedures for construction in the United States. After getting the official go-ahead from the U.S. government, Toshiba will then undergo safety checks in Canada.

Currently, oil sands are mined using boiler-generated steam. However, as this method requires natural gas to fuel the boilers, it is necessary to transport the gas as needed. Also, carbon dioxide emissions from burning natural gas is seen to be a problem.

By contrast, the planned small reactor would not require refueling for up to 30 years after construction or release any carbon dioxide. Furthermore, nuclear reactors would also be cheaper should the general price of natural gas increase.

... constructing a small reactor costs between 50 billion yen and 100 billion yen, less than 20 percent the cost of building a regular reactor. This would make the new reactor easier to introduce in frontier areas. Therefore, Toshiba has been working in Alaska and municipalities in northern Canada to introduce its small reactor as a small-scale power station. _Yomiuri

Oil production is a potentially high-profit area, which should help to provide a good return on investment in a timely manner. Once the reactor has proven itself in such applications, getting approval for a much wider range of applications should become easier.

Similar schemes using even higher temperature reactors -- such as high temperature gas cooled reactors -- could be used to produce the abundant oil shale kerogens found in the Green River formation of the US mountain west.

The use of nuclear process heat for production of unconventional hydrocarbons used as fuels, chemicals, polymers, and other materials, is likely to become routine as newer, safer, more affordable and efficient reactor designs are developed and approved.

High temperature reactors should be able to convert oilsands (Canada), heavy oils (Venezuela), kerogens (USA), coal (US, Australia, China etc.) and biomass (worldwide) to high quality hydrocarbons at costs very compatible with conventional oil production by the mid- to late 2020s, as long as the US government does not continue to stonewall new nuclear designs.

Advanced Lessons in Profitable Oil Sands Production

Canadian oil sands production is headed upward, thanks in large part to increasing efficiencies of in situ production methods.

WSJ Advanced Oil Sands

...oil companies... are experimenting with technologies that could unlock even more reserves from what is some of the world's heaviest and stickiest petroleum. The new technologies could also drive down the cost of producing oil in Canada.

One consortium aims to get oil flowing to the surface by sending radio waves from huge antennae pushed through wells deep underground—adopting technology first developed for the U.S. government to eavesdrop on underground bunkers.

Another company is working on inserting electrical heating coils into wells to melt the oil, while other firms are tinkering with petroleum-based solvents they hope to pump into wells to get more oil out.

All the experimentation is aimed at improving a standard method of oil-sands extraction: so-called steam-assisted gravity drainage, or SAGD.

...SAGD quintupled the amount of bitumen that may be possible to recover in Canada, and helped lift Canada's overall recoverable oil reserves to No. 3 in the world, behind Saudi Arabia and Venezuela.

But those reserves are only a 10th of the 1.7 trillion barrels of bitumen found in Canada. Alberta's Energy Resources Conservation Board estimates there are also more than 400 billion barrels of bitumen trapped in carbonate rock formations in Alberta, mostly in a large formation called the Grosmont that stretches across the center of the province.

"If we postulated that 25% of that can be recovered, Canada could move to No. 1" in world oil reserves, said Glen Schmidt, chief executive of privately owned Calgary energy-technology company Laricina Energy Ltd.

...Basic SAGD technology uses two horizontal wells drilled parallel to each other, one above the other. Natural gas is used to boil water into steam, which is injected underground into the top well. The steam heats and softens the bitumen, separating it from the sand, causing it to drip down to the bottom well, which sucks it back up.

Laricina is part of a consortium including large Canadian energy companies Suncor Energy Inc. SU -0.96% and Nexen Inc. NXY +51.82% that is testing replacing the steam with an antenna, developed by Melbourne, Fla., telecommunications-equipment manufacturer Harris Corp. HRS -1.24% After being fed down a well, the antenna blasts out heat, warming the bitumen.

..."If we eliminate steam, we eliminate potentially 60% of the cost of a facility, which is huge," he said. The technology could be ready as soon as 2019.

...Harris and other antenna designers try to reduce electromagnetic heat as much as possible to improve the efficiency of a radio antenna for communication. Harris "realized that we can take our antennae and instead of using them for communications, we can use them as a source of electromagnetic energy that generates heat," Mr. Covell said.

Athabasca Oil, another big Canadian oil producer, is testing a similar electric-heating technology to unlock bitumen from carbonate rock. The company inserts electric coils, made of the same material as heating elements on a stovetop, into wells. If tests are successful, Athabasca plans to start a commercial project for its technology by 2018.

Laricina and several other companies are also testing adding light hydrocarbon solvents to steam in SAGD wells to boost output. The solvent dilutes bitumen, making it easier to flow.

_WSJ

The bottom line is that oil sands producers are learning how to reduce the cost of in situ extraction of bitumens, while also increasing the overall yield.

Breakeven prices may approach $50 a barrel for some approaches, and yields may improve by 30%. How quickly all of this happens will depend in part upon global oil demand over the next 10 years.

Using nuclear power and heat to economically produce oil sands (PDF)

Median Breakeven for Tight Oil is $52 per Barrel

Many tight oil projects achieve payout of the capital invested very quickly because so much of the economic value comes out in the first year, he said. According to Peters & Co. estimates, a median tight oil project is economic, with a 10% rate of return, at around US$52 a barrel. _Financial Post_via_GWPF

Cost of Oil Production 2007 Dollars

Improved technologies for production of tight oil and oil sands will allow for more and more economical production of these formerly uneconomical forms of crude. By shifting to in situ production, for example, Canadian oil sands producers can reduce breakeven costs from above $80 all the way down to around $60 a barrel.

Now if Americans can either get rid of Obama, or convince Obama to sign off on Keystone XL and other crucial projects, they may revive their economy, while being able to temporarily go back to exporting oil.

And as long as North American tight oil projects provide rich profits as early as the first year, we can expect to see production in North Dakota and Texas continue to ramp up. This boom is likely to last for at least 10 to 20 years, if not longer.

North American tight oil (& gas) alone is not likely to change the world appreciably. But oil prospectors have barely begun to explore the tight source rocks of the world for their riches. Why should they, when there is so much conventional oil still being found in the hinterlands and deep under the seas?

But the resource is there, and likely to be much richer than currently assumed, when and if it is ever needed.

Finally, the US had best move quickly ahead with development of the next few generations of nuclear power technology. That will assure the world of several tens of thousands of years of abundant electrical power and cheap high quality industrial process heat.

Perhaps the Russians, the Saudis, and the Mexicans can get away with oil-based over-complacency, but Americans and Canadians had best stay on their toes.

North American Energy Colossus is Poorly Understood

The rapid ongoing rise in North American energy production is receiving a great deal of attention in the energy media. But very few analysts have accurately described the potential impact of the energy technologies which have made this growth in production possible. A recent report from the Manhattan Institute (PDF) seeks to place the North American Energy Colossus in perspective. (h/t Mark Perry)

NA Energy Colossus (PDF)

New energy tools and technologies are making large energy deposits accessible at affordable prices. As these tools and technologies themselves grow more affordable, the underlying commodity or product also grows more affordable.

NA Energy Colossus (PDF) Executive Summary

It is not just the mere fact of this growing trove of affordable energy that is important to keep in mind. It is all of the economic effects which result from these affordable resources which must be kept in mind -- as well as the effect of ever newer technologies on affordability of resources (neglecting an ongoing governmental devaluation of currencies and other destructive governmental policies).

NA Energy Colossus (PDF)

When the increased jobs and local and regional government revenues are taken into account, the economic effects of these new energy resources become more obvious.

There is always the possibility that global energy prices might be driven so low as to render much of this unconventional energy production unprofitable. That is a point which has been pressed not only here at Al Fin Energy, but also in the energy media at large.

The shale gas-ification of oil, a recent article in Petroleum Economist, goes so far as to claim that unless Brent oil prices remain above $100, that most of this grand new North American unconventional energy production will go bust.

That claim has been widely made elsewhere, with the breakeven price varying from $60 a barrel up to $120 a barrel or more for unconventional production (including oil sands, CTL, GTL, oil shale, shale oil, etc).

But if unconventional energy production has a built-in economic stimulant incorporated in itself, much of this concern about an imminent oil bust may well be overwrought.

As long as governments do not insert themselves unduly into the production of unconventional liquids -- including offshore oil, tight oil & gas, CTL, GTL, oil sands etc. -- the natural boom and bust price swings are likely to work themselves out throughout the economy. Some enterprises will thrive, others will go bankrupt -- just as they have always done. Best to keep government out of the corrupting job of picking winners and losers.

Canadian Oil & Gas Coming On Strong

Canada's growing oil & gas production is driving the economy. The recent elections in Alberta reflect the oil sands' growing importance.

Image via NBF


The slideshare presentation below provides an extended look at near to intermediate term developments in Canada's oil & gas industry.

Canadian Oil and Gas Industry Outlook – Opportunities & Challenges

View more presentations from Canadian Association of Petroleum Producers (CAPP)

h/t Brian Wang


Canada and Australia are developing into two powerhouse energy and mineral exporting nations of the Anglosphere. Being blessed with abundant resources, the rule of law, ample human capital, and relative proximity to large markets, these two countries should have long and prosperous futures -- at least to the mid-century mark. This is true as long as they can avoid ruinous policies of carbon hysteria and energy starvation, and as long as they can develop and maintain sound immigration policies.

Obama: I'll Do It "The Chicago Way!" A Tale of Two Pipelines

Enbridge has just announced the expansion of its pipeline access to the Gulf of Mexico, to provide an alternative pathway for Canadian oilsands in the wake of the recent Obama rejection of the Keystone XL pipeline northern leg.

Enbridge Oil Sands Alternative via Chicago
When Obama took executive action to prevent the upper leg of the Keystone XL pipeline, environmentalists celebrated as if they had won a victory. But there may be more involved in the story than what was printed in the newspapers or broadcast on the airways and cable channels. Whenever an economic decision is made by a government, sceptical people always ask: "Who benefits?"

Brian Westenhaus takes a look at the recent Enbridge announcement that it is expanding its pipeline network to provide an alternative pathway to the Gulf of Mexico for Canadian oilsands.

Oil flowing through Illinois is subject to local fees and taxes, which enrich the many corrupt FOOs (friends of Obama) who have taken up positions of power there. But one must also wonder what goes on behind the scenes before such a decision is even made.

Keystone XL Bypasses ChicagoAs you can see if you follow the dotted green line representing the Keystone XL pipeline, the pipeline which Obama is stonewalling does not come anywhere close to Illinois or Chicago. In that sense, the pipeline is no good to Obama or all the crazy FOOs in that corrupt state. Unlike the alternative pipeline plan recently announced by Enbridge.

More from GCC

Politics can be a byzantine affair, twisted and labyrinthine in its ways of distributing power and money to those who please the king.

Can Canada Leverage Its Hydrocarbon Wealth to Create An Abundant Future Based Upon Advanced Energy Sources?

Canadians are understandably upset at the US in general, and at US President Obama in particular. Obama's abrupt and corrupt killing of the Keystone XL pipeline sent an unfriendly message of contempt and disregard to the US' neighbors to the north.

While the US Republican Congressional members are attempting to devise a way to approve the Keystone XL pipeline's completion and border crossing, Canadians are forced to contemplate other markets for their increasingly valuable oil sands product. After all, oil sands production has been ramped up in anticipation of cheap & ready pipeline transport to the south, all the way to refineries on the Gulf of Mexico. With the destruction of that rational plan by the congenitally feckless Obama, China is forced to look to China and India as alternative markets:

While the media fixates on the political spin around the Obama government's rejection of TransCanada's Keystone XL pipeline, there's another, more important element to this story that has been grossly underplayed:... in Asia...demand for energy of all kinds will continue to soar, according to BP's 20-year forecast....

``By 2030 China and India will be the world's largest and third-largest economies and energy consumers, jointly accounting for about 35 per cent of global population, GDP (Gross Domestic Product) and energy demand,'' the report says.

``Rapid economic development means industrialisation, urbanisation, and motorisation. Over the next 20 years China and India combined (will) account for all the net increase in global coal demand, 94 per cent of net oil demand growth, 30 per cent of gas and 48 per cent of the net growth in non-fossil fuels.''

No, that's not a typo. Let me repeat that: over the next 20 years, BP says China and India will account for 94 per cent of the net worldwide increase in oil demand. _Canada.com

The author goes on to warn of Canada's dependency on the US as an export market, at a time when US consumption of imported oil continues to decline.

Canada itself needs to also think about what kind of energy infrastructure it wishes to build for itself, using the oilsands wealth as a springboard. In the medium and long-term, advanced nuclear fission (and later, fusion) technologies make the most sense. Canada has rich ore resources for production of nuclear fuels, and with rational recycling and breeding technologies, the resource could last almost indefinitely, in practical terms.

Wisely, Canadian utilities are beginning to look toward building their nuclear infrastructure:

Utilities in Canada are expressing interest in the Westinghouse AP1000 pressurized waterreactor (PWR) and the Westinghouse Small Modular Reactor, a 200 MWe class integral PWR currently under development that is suited for smaller electrical grids, distributed generation, and process heat requirements. _Power-Eng

In an attempt to create a more sustainable oil sands industry, engineers are looking for ways to substitute geothermal heat in place of natural gas, for the production of oil sands. The key factor is industrial heat, which can be provided in multiple ways.

Al Fin energy analysts prefer the use of gas-cooled nuclear reactors for long term in situ production of oil sands, oil shales, heavy oils, and for even more unconventional fuels such as coal to liquids (CTL) and gas to liquids (GTL). Canada is rich in several hydrocarbon resources which could be economically converted to high quality fuels and high value chemicals, using process heat from gas cooled nuclear reactors.

All of these projects will require significant capital, which can be at least partially provided from export profits derived from sales of oil sands. The key issue is to convert a modern-day source of export wealth into a long term foundation for energy abundance, industrial sustainability, and commercial viability.

Neither large-scale wind power nor big solar power are rational foundations for a prosperous Canadian future, as both of these green approaches are inherently unreliable, expensive, intermittent, difficult to manage, and lead to exponential increases in customer energy bills.

US President's Clueless Policies Continue to Weaken US

If the United States chooses to cut itself off from its largest, most reliable, and most durable supply of crude oil, from where will it, with its continuing high use of transportation fuel, get its future imports? Crude oil production in two other major U.S. suppliers in the Western hemisphere, Mexico and Venezuela, has been declining (by, respectively, more than 20 percent and more than 15 percent between 2005 and 2011), and in the Middle East the United States faces enormous competition from China.

By preventing the oil flow from Canada, the United States will thus deliberately deprive itself of new manufacturing and construction jobs; it will not slow down the increase of global CO2 emissions from fossil fuel combustion (OK, by two weeks, perhaps); it will almost certainly empower China; and it will make itself strategically even more vulnerable by becoming further dependent on declining, unstable, and contested overseas crude oil supplies. That is what is called a spherically perfect decision, because no matter from which angle you look at it, it looks perfectly the same: wrong. _Vaclav Smil

Vaclav Smil
If the US President were to pay attention to intelligent voices for a change -- such as the voice of Vaclav Smil, quoted above -- he would probably make a lot fewer mistakes, and his country would be in a much stronger position.

Unfortunately, Obama's bad ideas are not limited to the energy sector:

President Barack Obama continued his efforts to make China stronger and America weaker during last weekend’s Asia-Pacific Economic Cooperation (APEC) summit in Hawaii. How? By pressuring Chinese President Hu Jintao to increase the value of the yuan relative to the dollar. If successful, this policy will make Americans poorer relative to the Chinese.

The theory behind the Obama Administration’s weak dollar policy is seductive, but wrong. _Forbes

One must look for a long time to find anything that Obama has done right. So sad, and so preventable.

Obama has invested deeply into the green scams and bubbles of his crony friends and supporters, while suppressing and prohibiting all possible forms of energy which are reliable and plentiful.

Without huge government subsidies, big solar and big wind are not viable. Neither are truly viable even with the huge subsidies which are proving ruinous to government budgets from Spain to California -- but without the subsidies, these renewables quickly go nose down into a crash and burn.

If the US re-elects their clown president, they will be committing suicide as a nation. Even with a more rational administration, there is no guarantee that the US can pull out of its steep nosedive.

Hope for the best. Prepare for the worst.

In Situ Oil Sands Extraction Taking Off

Bitumen Steam Extraction via Technology Review
Canadian oil sands producers are gradually moving away from the open mining of oil sands. Instead, they are increasingly utilising in situ production methods which leave the land surface features unaltered, and allow access to deeper deposits of bitumen which are not accessible from the surface.

Natural Gas Steam Generators for Bitumen Extraction

...the mines give way to tidier industrial sites amid boggy greenish-brown muskeg and stands of white spruce, jack pine, and aspen. These forest-ringed facilities have traded shovels and enormous trucks for an extraction process that drills down hundreds of meters into solid ribbons of bitumen and, using vast quantities of steam, melts the tarry petroleum in place. Liquefied bitumen then oozes out through a system of parallel pipes. Such "in situ" extraction operations now account for nearly half the current output of northern Alberta's oil business, and that figure will only increase. Alberta's 1.8 trillion barrels of bitumen may be the world's largest single accumulation of hydrocarbons, but four-fifths of this resource lies deeper than strip-mining can reach.

In situ extraction is expensive—on average, it's not profitable if world oil prices are below $60 per barrel. But with today's prices consistently well above that, the practice is booming. The oil sands will generate over 1.5 million barrels of oil per day this year, according to the Canadian Association of Petroleum Producers, a Calgary-based group. That accounts for more than half the oil that Canada pipes to the United States (Canada is its neighbor's single biggest source of imported oil). By 2025, oil-sands production is projected to more than double, to 3.7 million barrels per day, and in situ operations will deliver nearly two-thirds of that boost.

...the Canadian economy, particularly in Alberta, has become heavily dependent on the growth of the oil-sands industry. Investments from Canadian firms and global oil giants totaled $13 billion in 2010 and grew to $16 billion this year. The oil sands have made Alberta the hottest place in Canada for jobs, investment, and growth, helping the country avoid many of the economic woes afflicting the United States and much of Europe.

The oil sands mean hundreds of millions of dollars in taxes and royalties, and job creation from Newfoundland to Vancouver. So many Newfoundlanders have come to Alberta to work in Fort McMurray that it amounts to "Newfoundland's third-largest city," says Murray Smith, a former Alberta energy minister. Such economic heft makes it a given that Canada is going to keep exploiting this resource, he says: "We're next door to a customer that has 250 million vehicles driving three trillion miles a year. You can be sure that as long as that demand is there, there will be product to sell. We'll produce the oil sands." _TechnologyReview_via_Brian Wang

Faux environmentalists, carbon hysterics, and lefty-Luddite dieoff.orgiast greens, will lament the rapid, progressive buildup of oil sands development in Canada. But then, if they could think clearly, they would focus on solving problems rather than whining about their imaginary nightmares.

A recent report from Calgary investment bank Peters & Co. crowns Cenovus’ Christina Lake operations as the most energy efficient in August by steam-oil ratio — the number of barrels of steam required to produce one barrel of bitumen.

It produced 18,900 barrels per day, five per cent over rated capacity, at an SOR of 2.3, closely followed by Cenovus’ Foster Creek, which churned an estimated 111,200 bpd, 93 per cent of capacity, at an SOR of 2.4.

Suncor Foster Creek was third at 2.5 as it produced 29,100 bpd or 88 per cent of capacity and MEG was fourth with an SOR of 2.6 and production of 26,400, six per cent over rated capacity. _CalgaryHerald

Profits from Canadian Oil Sands Paying for Next-Gen Fusion Research

It is only fitting that old wealth pay for the transformative technologies which will make society better, and create new wealth at the same time. That is what seems to be happening in the advanced biofuels sector -- where old wealth chemical and oil companies are paying for the amazing new technologies of renewable fuels. And it also seems to be happening in the next-generation fusion sector, where wealth being made in Canadian oilsands is supporting avant-garde energy research by General Fusion Inc., of Burnaby, B.C.

General Fusion Inc. of Burnaby, B.C., may look like a sophisticated nuclear research company. It’s also the manifestation of a mid-life crisis. A decade ago, physicist Michel Laberge and engineer-executive Doug Richardson were working together at another B.C. firm making software for print designers. When Laberge turned 40 he came to a realization, says Richardson: “[Michel] didn’t want to help cut down forests anymore.”

Today Laberge is the president and chief technology officer—with Richardson as CEO—of a small company that hopes to become the first to get more energy out of a man-made experimental nuclear fusion reaction than it puts in. General Fusion has raised more than $33 million to date from a mix of government eco-research programs and private investors, including Amazon.com CEO-founder Jeff Bezos.

Among the partners, one stands out as especially counterintuitive: this summer the company received funding from Calgary-based oil sands company Cenovus. In backing fusion research, Cenovus is supporting what could become an alternative to its own business, if fusion generation can ever shed its long-standing pie-in-the-sky status. “For us, the investment isn’t a large amount,” says Dave Hassan, who oversees the Cenovus eco- fund. “For a small research company with cash requirements it’s big.” Fusion is a long shot, Hassan concedes, “but it’s a game changer if it works—carbon-free energy, essentially, forever.” __Macleans

The smarter people among the "old money" are risking at least some of that wealth on the long-shot gambles that threaten to change everything. Of course, these days, the "old money" doesn't have to be very old. Bill Gates, Jeff Bezos, Elon Musk, and Peter Thiel, for example, are generally considered to be "old money" these days. And each of them is pushing world-changing technologies which could change everything.

But even older money -- such as Exxon Mobil, Dow Chemical, Shell Oil, Monsanto, etc -- are investing inways to push the envelope of technology in order to invent and innovate ways out of current and near-term quagmires. That is the way markets and capital are supposed to work, as long as greedy governments and layabout special interests do not destroy the normal mechanisms of capital markets.

If any institution is threatening to destroy the future, it would be big statism in conjunction with its many enablers. If any protest movement actually wanted to make a difference, in terms of making the world better, that would be the place to start.

Keystone XL Pipeline Fights Faux Environmentalist Energy Starvation

The Keystone XL pipeline is meant to carry oil sands crude all the way from Canada to the US Gulf of Mexico coast refineries and terminals. This pipeline will provide deepwater access to Canada's oilsands, as it ramps up in production.

The US State Department has issued a final environmental impact statement, finding no significant environmental impacts from the pipeline. The bureaucratic process for approval of the pipeline is far from exhausted, however. The Obama agenda of energy starvation has barely begun to sink its fangs into Canada's oilsands, US coal, US offshore oil, US kerogens, US nuclear etc. -- despite the risk to the US economy of shutting down virtually all reliable forms of energy.

As for the Keystone XL and other oilsands pipelines -- Most analysts believe that it is the price differential (about $25) between North American oil prices and global oil prices which is driving various pipeline routes to the sea.

Will the pipeline connection to the Gulf Coast simply be a conduit for Canadian oil to be trans-shipped to foreign markets and capture more favorable world pricing? If so, how does that help America?

Or will the flow of 500,000 to 900,000 barrels a day through the Keystone XL pipeline to the Gulf Coast be sufficient to bring down bulging inventories of stranded, land-locked oil in Cushing, Oklahoma and eliminate, or at least substantially reduce the huge price spread between Brent and West Texas Intermediate?

If it doesn’t, and the over $25-per-barrel spread between U.S. domestic oil prices and world oil prices persists, new pipelines will be built in Canada to provide a more direct connection to global oil markets.

One way or another, it is oil price differentials, not James Hansen’s concerns, which will ultimately determine the flow and direction of oil from Canada’s tar sands. _Globe&Mail

Faux environmentalism is little more than a primal desire to return to a pre-industrial global state. Since such a return would inevitably result in the dieoff of several billion human beings, faux environmentalism is a thinly veiled yearning for a massive reduction of the human population to less than 10% of current levels.

Energy starvation of the developed world is the quickest route to this dieoff. By shifting from reliable forms of energy such as nuclear, coal, gas, etc. in favour of unreliable forms of energy such as big solar and big wind, faux environmentalism is apparently trying to bring about massive poverty, hunger, hardship, disease, and death. Think of that the next time you are solicited by Greenpeace, the Sierra Club, or World Wildlife Fund.

Can Oil Production in the Americas be Boosted by 16 mmbd?

By the 2020s, the capital of energy will likely have shifted back to the Western Hemisphere, where it was prior to the ascendancy of Middle Eastern megasuppliers such as Saudi Arabia and Kuwait in the 1960s. The reasons for this shift are partly technological and partly political. Geologists have long known that the Americas are home to plentiful hydrocarbons trapped in hard-to-reach offshore deposits, on-land shale rock, oil sands, and heavy oil formations. The U.S. endowment of unconventional oil is more than 2 trillion barrels, with another 2.4 trillion in Canada and 2 trillion-plus in South America -- compared with conventional Middle Eastern and North African oil resources of 1.2 trillion. The problem was always how to unlock them economically.

But since the early 2000s, the energy industry has largely solved that problem. With the help of horizontal drilling and other innovations, shale gas production in the United States has skyrocketed from virtually nothing to 15 to 20 percent of the U.S. natural gas supply in less than a decade. By 2040, it could account for more than half of it. _FP

FPBrian Wang links to a story in Foreign Policy which suggests that oil production in the Americas could be boosted by up to 16 million barrels per day! Such a large daily production boost would involve multiple sources, including shale oils, heavy oils, oil sands, oil shale kerogens, and offshore wells in the Gulf of Mexico and off of the Brazilian coast. Examples:

...analysts are predicting production of as much as 1.5 million barrels a day in the next few years from resources beneath the Great Plains and Texas alone...

...Brazil is believed to have the capacity to pump 2 million barrels a day from "pre-salt" deepwater resources, deposits of crude found more than a mile below the surface of the Atlantic Ocean that until the last couple of years were technologically inaccessible. Similar gains are to be had in Canadian oil sands, where petroleum is extracted from tarry sediment in open pits. And production of perhaps 3 million to 7 million barrels a day more is possible if U.S. in situ heavy oil, or kerogen, can be produced commercially... _FP

US President Obama's ongoing de facto drilling moratorium in the Gulf of Mexico, US Arctic, etc. is costing the US roughly one quarter of a million jobs or more, and a huge amount of daily oil production.

Petrobras is showing strong profits, and has ambitious plans for offshore production.

Energy companies are rushing to Ohio to develop large shale oil deposits

Texas is riding high on new oil discoveries and technologies

Development of the huge bitumen and heavy oil deposits in Canada and Venezuela, and oil shale kerogens in the US, will be a challenge. But if the market demand for liquid hydrocarbons expands as has been predicted, new technologies to develop these resources in an environmentally responsible manner will be developed.

Canadian OilSands: A Cleaner More Bountiful Bitumen

Canadian oilsands producers are making progress on many fronts, to produce a cleaner and more environmentally friendly product, in ever greater quantities. Brian Wang discusses the N-Solv Process, an in situ bitumen extraction process that does not require water and uses 85% less energy.

NSolv Image via NBF

In N-Solv, heated solvent vapour is injected at moderate pressures into the gravity drainage chamber. The vapour flows from the injection well to the colder perimeter of the chamber where it condenses, delivering heat and fresh solvent directly to the bitumen extraction interface. The N-Solv extraction temperature and pressure are very gentle compared to in situ steam processes. The use of solvent also preferentially extracts the valuable components in the bitumen while the problematic high molecular weight coke forming species (asphaltenes) are left behind. The condensed solvent and oil then drain by gravity to the bottom of the chamber and are recovered via the production well.

The in situ solvent deasphalting is very selective and leaves the asphaltenes evenly dispersed throughout the extracted portion of the chamber. Post extraction core analyses show that the residue contains 60 to 70% asphaltenes. By leaving the majority of the asphaltenes behind the produced oil contains less sulphur, heavy metals (zinc, vanadium, iron) and carbon residue. This partially upgrades the oil to 13-16°API from a value of approximately 8°API for the raw bitumen. The produced oil is also less viscous, thus it requires less diluent for pipeline transportation to the refinery. _NSolv_via_NBF

Another promising water-free approach to the clean extraction of oil sands bitumen, is the ionic liquid approach. This process was developed by scientists at Penn State.

Oilsands producers are also making progress in cleaning up oil sands tailings, with the formation of the Oil Sands Tailings Consortium. More information here.

Current oil sands production is roughly 1.5 mbpd, with projects online slated to ramp production up to 7.5 mbpd -- a significant contribution to global oil production.

The United States is coming to rely on the growing supply of bitumen sourced oil, although the Obama government has been trying to shut down US importation and consumption of oil sands from its earliest days in power. If Obama's regime rejects Canadian oilsands, the Chinese market is more than willing to take up the slack. Either way, the future for Canada's oil provinces appears very promising, both economically and environmentally.

Catalysts and Solvents: Making Everything Possible

While we like to dwell on more exotic technologies and scientific theories, it is the nuts and bolts of modern industry and industrial scale agriculture which keeps you safe, warm, dry, and well fed. Almost no one likes to think about catalysts and solvents, but the quality of those arcane, mundane, nitty-gritty ingredients of your hidden underworld, determines much of what you can do with yourself.

Some interesting developments in catalysts:

New, cheaper nickel-based catalysts may spark a fuels and chemicals revolution

Newer, cheaper, platinum-free catalysts may open the door to cheap fuel cells, and fuel cell automobiles

Cheap molybdenum catalysts may make electrolysis of water to hydrogen / oxygen cheap and practical

Nanotechnology advances add an extra dimension to progress in catalysts

Solvents are even more easily ignored in everyday discussion than catalysts -- except in the context of a faux environmental armageddon. But they are no less important to everyday life for all of that.

New ionic solvents likely to revolutionise oil sands industry -- making oil sands and heavy oils environmentally friendly and setting back peak oil decades.

Supercritical CO2 and steam are proving to be effective solvents for more and more processes.

The movement toward cleaner, cheaper, more sustainable and effective solvents is accelerating, just like the movement toward better catalysts. And those are just two of the basic foundations of modern life where marginal improvements can pay huge dividents in quality of life.

Paying attention to such things can provide amazing investment opportunities as well.

New Roads to Fuels, Thanks to Over-Hyped Crude Oil Prices

For the US, the huge and growing alternative to crude oil is Canada's oil sands. New mines and refineries are being installed in Canada, and new pipelines are being built to deliver the product to US refineries and customers. Many of the environmental concerns over oil sands development are being answered by evolving new technologies.

More: Suncor and Total are teaming up to accelerate oil sands development

Another promising approach to liquid fuels is gas-to-liquids (GTL). The new Pearl GTL plant in Qatar is beginning preliminary operation.

Making syngas. In the gasifier at around 2,200-2,650°F (1,400-1,600°C) methane and oxygen from an air separation plant are converted into a mixture of hydrogen and carbon monoxide known as synthesis gas, or syngas. The reaction produces heat, which is recovered to produce steam for power.

Making liquid waxy hydrocarbons. The synthesis gas enters one of 24 reactors. Each reactor holds a large number of tubes containing a Shell proprietary cobalt synthesis catalyst. The catalyst serves to speed up the chemical reaction in which the synthesis gas is converted into long-chained waxy hydrocarbons and water.

The total surface area of the microscopic holes in the catalyst granules is more than eighteen times the surface area of Qatar. Placed end-to-end the tubes would stretch from Qatar to Japan. The synthesis process generates heat, which is also used to produce steam that in turn powers the GTL plant via steam turbines. All water in the GTL process is purified and reused in the utilities system of the plant to generate steam.

Shell’s catalyst company, CRI/Criterion, spent around four years using dedicated facilities in Europe in full-time production to provide the thousands of tonnes of catalysts needed for the start of production at Pearl GTL.

Making GTL (gas to liquids) products. Using another Shell proprietary catalyst, the long hydrocarbon molecules from the GTL reactor are contacted with hydrogen and cut (cracked) into a range of smaller molecules of different length and shape. Distillation separates out the products with different boiling points. _GCC

Other emerging alternatives to crude oil made more economically viable by artificially boosted oil prices also includes the coming wave of advanced biofuels: both cellulosic and algal. The cellulosic-derived fuels will require large volumes of biomass, such as designed tree farms or advanced grasses and seaweeds might deliver. Although the energy density of biomass is less than that of oil, gas, or coal, nature just keeps producing year after year. Many locations which are ideal for growing biomass do not have readily available fossil fuels.

Other alternatives include the processing of kerogens to liquids -- oil shale refining, coal to liquids, and waste to liquids. The technology for all of those approaches is improving thanks to investment spurred by high oil prices.

Continue to look into these possibilities, if you want to understand why -- at least on the supply side -- all the glib predictions of $200 a barrel oil in 2011 might have been self-serving. As for the demand side, things are bleak in the US under Obama, and conditions in Europe and China are not much better. Japan has a lot of re-building to do and will need more hydrocarbons to replace the loss of power production from nuclear plants, at least in the short to intermediate term. But Japan's population is shrinking rapidly, and long term demand from Japan can only decline.

Don't get so caught up in peak oil hysteria (and carbon hysteria) that you forget to breathe.

Israeli Oil Shale: 250 Billion Barrel Oil Equivalent Bonanza?

Dr. Harold Vinegar of Israeli Energy Initiatives is very optimistic about turning tiny Israel into a world giant of fuels. Estimates place Israel's reserves of oil shale kerogens second only to those of the US.

Dr. Vinegar has developed a new, deep in situ process of extracting oil from oil shale, which are not supposed to use excessive amounts of either water or energy. In fact, Vinegar claims that it will cost no more to produce oil from Israeli oil shale, than it costs Brazil to produce its offshore oil.

According to Dr Vinegar, Israel has the second-biggest oil shale deposits in the world, outside the US: "We estimate that there is the equivalent of 250 billion barrels of oil here. To put that in context, there are proven reserves of 260 billion barrels of oil in Saudi Arabia."

...According to Dr Vinegar, IEI, which is owned by the American telecoms group IDT Corp, hopes to begin production on a commercial basis by the end of the decade, with a view to producing 50,000 barrels per day at the outset. This would be a fraction of the 270,000bpd consumed daily by Israel, but would be a significant step towards making the country energy-independent. _Australian

The Israeli oil shale project is still in early development, but the massive global reserves of oil shales suggest that eventually someone will develop a cheap and clean way of developing this resource.

One possible direction to look is the new "ionic liquid" approach which is being developed for use with Canadian oil sands. Ionic liquids are an area of exciting research for energy and industrial use.

• Laboratory studies show ILs [Ionic Liquids, ed.] have potential for application in a number of energy-related areas:
1. Liquefaction, gasification and chemical modification of solid fuels (coal, oil shale, kerogen), biomass at temperatures below 400°C. (e.g., Patell 1993, Keol et al. 2001)
a. Reduction of viscosity, molecular weight of components in heavy oil (Johnson 2002)
b. Coals can be dissolved in chloroaluminate(III) IL, reacted (acylated) for liquifaction and desulfurization (Boesmann et al. 2001)
c. Acidification of petroleum wells (Fu and Card, US Patent 6,350,721)
2. Sweetening of sour gas (replacement for amine scrubbing)
a. Absorption of H2S and CO2 (Brennecke & Maginn US patent 6,579,343)
b. Mercaptan removal (O’Rear et al. Patent WO2002034863)
3. Optimization for high-octane fuel additives – Use of nickel catalyst solvated in IL in formation of 2,3-dimethylbutenes from propene (e.g., Chauvin and Olivier-Bourbigou 1995)
4. Environmental removal of contaminants from waste streams. ... Adsorption of CO2 and other compounds from gas streams (Brennecke and
Maginn 2003)... _Chemicalvision2020 PDF

Neoteric Solvents in Oil Shales PDF

Reversible Ionic Liquids for Energy Applications PDF

The possibilities seem endless for the application of these solvents, for separating and purifying a wide range of substances, as well as for catalysis of a number of processes. Their use in oil sands and oil shale are likely to be among the least important uses for this class of substance.

The main thing to remember is that these new chemical and industrial tools can reduce the need for water and energy in the extraction and processing of unconventional fuels -- and a whole lot more.

New Efficient Oil Sands Separation Method Uses Less Water

...oil sands represent approximately two-thirds of the world’s estimated oil reserves. Canada is the world’s major producer of unconventional petroleum from sands, and the U.S. imports more than one million barrels of oil per day from Canada, about twice as much as from Saudi Arabia. Much of this oil is produced from the Alberta tar sands. _Newswise

Newswise
Penn State researchers have developed a cleaner, more economical, and more water-efficient method of separating the bitumen component from oil sands.

Paul Painter, professor of polymer science in the Department of Materials Science and Engineering at Penn State, and his group have spent the past 18 months developing a technique that uses ionic liquids (salt in a liquid state) to facilitate separation. The separation takes place at room temperature without the generation of waste process water. “Essentially, all of the bitumen is recovered in a very clean form, without any contamination from the ionic liquids,” Painter explained. Because the bitumen, solvents and sand/clay mixture separate into three distinct phases, each can be removed separately and the solvent can be reused.

The process can also be used to extract oil and tar from beach sand after oil spills, such as the Exxon Valdez and Deepwater Horizon incidents. Unlike other methods of cleanup, the Penn State process completely removes the hydrocarbons, and the cleaned sand can be returned to the beach instead of being sent to landfills. In an experiment using sand polluted by the BP oil spill, the team was able to separate hydrocarbons from the sand within seconds. A small amount of water was used to clean the remaining ionic liquids from the sand, but that water was also recoverable. “It was so clean you could toss it back on the beach. _Newswise_

Also see Green Car Congress

Cleaner and more efficient methods for producing oil from abundant oil sands should make a lot of people happier and less frantic about the future of global energy supplies. Unfortunately, for too many "doomers", the only joy they get in life is from contemplating the total breakdown of global civilisation. For such as those, good news is bad news.

For the rest of us, we will do the best we can and move on from there.

Canadian Oil Sands Going In Situ

For oil sands that are too deep for surface mining operations, some form of "in-situ" is needed to extract the oil. Most in-situ operations involve the injection of steam into the oil sands deep underground.

The steam warms the bitumen, making it more mobile, so that it can then be extracted through drilling.

Some sources say 20 per cent of this area will be mined versus 80 per cent being developed in situ. (The Alberta government disagrees, telling The Tyee the number is more like 2.5 per cent mining and 97.5 per cent in situ.) _TheTyee

... the number of in situ or thermal projects continued to multiply as foreign investors lined up to inject dollars. _CalgaryHerald

Cenovus Foster Creek
There are several approaches to mining oil sands. Not all oil sands projects are equally economical to construct. Some of the most economical approaches involve in situ extraction of bitumen from the sands.

Ten years ago, big mining projects were the only game in town - now there are choices not only between mining and in situ but sophisticated money is also seeking out the projects with the best reservoir quality.

What they are finding is that in situ technologies, through which 80 per cent of the oilsands will be accessed, are gaining an economic advantage.

Capital intensity, for example, at Imperial Oil's under-construction Kearl mine project is about $70,000 per flowing barrel - it'll cost about $8 billion for a project expected to produce 110,000 barrels of bitumen per day.

Suncor has said its oilsands mines will cost around $60,000 per barrel to build while its multiple Firebag thermal in situ projects will come in for between $30,000 and $35,000 per barrel.

"People like Cenovus are saying that, in some cases, they can add in situ capacity at about $20,000 per daily barrel," Dunbar said. _Calgary Herald

As technologies improve and become cleaner and more economical, expect Canadian oil sands production to grow exponentially. A giant new pipeline going all the way to the Gulf of Mexico should speed up the process, once completed and running.

Just as North American shale gas technology has revolutionised the energy industry, so will Canadian oil sands technology.

Other unconventional forms of hydrocarbons will also likely step in to provide liquid and gaseous fuels, as needed. There are trillions of barrels of oil equivalent in known unconventional reserves around the world, with variable accessibility. Many trillions more barrels are undoubtedly sitting around, unsuspected, waiting for better technologies of exploration and production.

Canada as Energy Superpower?

Canada Energy 2006
Oil, coal, gas, unconventional hydrocarbons -- you name it, Canada has it. In addition, Canada has rich mineral resources, including uranium. Canada even has a large hydropower resource to call upon to supply between 15% and 20% of its energy. For the next 20 years, at least, Canada will be in a comfortable position in terms of energy economics. Just don't let the carbon hysterics botch it all up.

As Peter Boag, president of the Canadian Petroleum Products Institute, noted recently in his presentation to the Senate standing committee on energy, environment and natural resources that gasoline and diesel -- fossil fuels -- will still be needed and make up the lion's share of how Canadians transport themselves and their goods for the foreseeable future. The same applies to the rest of the world. That's due to simple physics: "They store large amounts of energy in a relatively small space and are therefore ideally suited for transportation use," said Boag in his presentation.

...Even the International Energy Agency, in its recent forecast looking ahead to worldwide energy use 25 years from now, forecasts that even for its most radical carbon replacement plan and most hopeful energy efficiency plans, many of the technologies needed are not yet available and that many others require substantial refinement and cost reductions.

So by 2035, traditional sources of energy will still make up the vast bulk of energy usage -- and this despite the IEA's urging for governments to spend trillions over the next decades on alternative energies and hoped-for technological breakthroughs. _Sun

The US Obama regime has been working behind the scenes to shut off imports of Canadian oil sands to the US -- using the carbon hysteric's rationale. But reality has already over-ruled the Obama regime on more than one occasion, and is likely to do the same on this particular point.
Giant oil sands pipeline in the works

nuclearfaq.ca

Obama Devastates Gulf Coast, Rejuvenates Alberta's Oil Sands

While Obama's inept moratorium on oil drilling along the US Gulf Coast heaps misery upon millions of Americans, Alberta's economy is being rejuvenated by the shift of resources northward to the oil sands. If Obama's political agenda prevents oil companies from investing in the United States, they will naturally turn to the vast hydrocarbon resources of other nations such as Canada -- while Mexico, Cuba, Russia, China, and Brasil move to take advantage of deep sea oil resources that the US government eschews.

In a research note this week, investment bank Peters & Co. said as much as $30 billion will be spent from 2011 to 2015 on mining and in situ oilsands projects to boost production by almost one million barrels per day.

"Most new sizable projects are controlled by majors with less financing risk and lower costs of capital than juniors of previous cycles," wrote research analyst Todd Garman.

"Based on our assessment of currently planned oilsands mining and in situ projects, including phase expansions, we forecast total potential production additions of about 900,000 bpd, with mining and in situ production of 300,000 bpd and 600,000 bpd, respectively."

..."Specifically, we anticipate that ConocoPhillips' Surmont, Husky's Sunrise, Imperial's Kearl, MEG's Christina Lake and Suncor's Firebag 4 projects provide potential oilsands construction growth opportunities for Flint, with these projects expected to be awarded by 2010 year-end," Garman wrote.

He said the biggest risk for development is related to oil prices -- the projects are projected to break even at between $55 and $65 US per barrel. _CalgaryHerald

As long as oil is priced in terms of the weak Obama Dollar, the price of oil is likely to be above $55 per barrel.

As peak oil drifts ever further into the distance, the more relevant and proximal causes of energy shortages derive from "political peak oil", and the disastrous decisions being made daily by incompetent clowns in public office.

Cross-posted to Al Fin