Canadian Tar Sands By: Chris Wolfe

Tar Sand History -Most Canadian tar sands located in three major deposits in northern Alberta -Sands have been in production since the 1967 Suncor mine -In 1998, the Syncrude mine shipped its billionth barrel of oil -For the period 1996 to 2016, approximately 87 billion dollars of investment

Reserves -As of 2005, billion barrels in proven recoverable reserves -Estimated 315 billion barrels in recoverable reserves -Total resource base of trillion barrels -Canada has 15% of the world’s proven oil reserves -At current production rates (1.1 mm bbl/d), it would take ~433 years to deplete these reserves

Surface Mining -Tar sands typically lie meters beneath the surface -Tar sands first mixed with hot water and caustic -Resulting bitumen froth is separated and further purified -Water purification and recycling is the key to a successful operation -2 tons of oil sands required per barrel of crude - Each barrel of crude produced requires 3-6 barrels of water and 730 scf of natural gas

Steam Assisted Gravity Drainage (SAGD)

Cyclic Steam Stimulation (CSS) Vapor Extraction Process (VAPEX) -Used since the 1950s -First, the steam at degrees Celsius is pumped into a well for a period of weeks -Second, the steam is left to soak in for a few days -Finally, the hot oil is pumped up from the ground until production dies down -The process is then repeated -Uses hydrocarbon solvent vapors much like SAGD uses steam -Potential for much greater efficiency than steam -Still a new technology

Economic Viability -Average cost per barrel in 2007 is $28 -Current labor shortage in Alberta is raising costs -A growing material shortage is hurting the oil sands as well -Environmental concerns have led the Canadian government to phase out tax breaks for the tar sand industry in the near future -Royal Dutch Shell reported an average 2006 profit of $/bbl -Current oil prices ~90 $/bbl -Canada has been the largest single provider of crude to the US for almost a decade

Environmental Impact

-According to current production rates, tar sands mining and processing uses ~293.1 billion scf of natural gas per year and ~1.2 billion barrels of water per year -All the water used for tar sand mining comes from local rivers and lakes -Once the water is used, it cannot be purified enough to return to the environment -As water supplies run low, refineries will be forced to switch to deeper, brackish aquifers

Water Treatment Options -Water treatment can cost up to 20% of invested capital -Evaporation -- technical road blocks, waste disposal -Inorganic/Ceramic Membranes – successful pilot work, not economical enough to be implemented in the market -Polymer Softening Membranes – risk of damage due to process temperature, risk of organic fouling -Membrane Bioreactors – excellent separation, new technology

Conclusion -Canadian tar sands have proven, stable reserves -Production of tar sands has been profitable -Promising new technology gives the indistry a brighter future -Serious environmental concerns -Material and labor shortages already

Questions?

References Alberta Energy. “Fact Sheet Link.” Oil Sands Fact Sheet. June Nov Barbajosa, Alejandro. Energy Bulletin. 17 Nov Robertson, John. “Emerging technologies and challenges in water use and re use.” CHOA Technical Luncheon. 2 Oct Spragins, Frank. “Oil Sands History.” Syncrude Canada. 16 Nov United press. Sustainable Transport Coallition. 16 Nov