Sunset falls on Alberta’s oldest
oil and bitumen upgrading facility, Suncor Canada Ltd.
The northern Alberta oil sands are the engine
of the Canadian economy, they support the strength of the dollar, and provide
some the United States with a safe and reliable source of oil; they are also
the number one reason why Canada’s emissions are rising and why it is highly
unlikely the country will ever meet a climate change goal.
BY SARKA HALAS
The oil sands hold the largest deposits of oil
outside the Middle East, massive investment and upcoming mega projects show
they will be squeezed to the last drop. Alberta oil however, is not cheap oil, just
to get it out of the ground and upgraded into a usable light crude requires an
extensive effort.
Despite the industry boom in the last decade, the oil patch
has been using the same energy guzzling technology since the 1970s. The
industry is notorious for turning its back on innovation, even if a soft-spoken,
bespectacled, MIT trained engineer has found the holy grail of oil sands
innovation.
Zero emissions extraction of oil
John Nenniger, CEO of Calgary based, N-Solv
Corp., has developed a way to extract oil while producing almost zero emissions.
“If our technology lives up to its promise, we could eliminate greenhouse gas
emissions, and of course we don’t use any water, if we could do this at the
same time as delivering some very strong profits, that’s important,” he says. Nenniger
has been working on his solvent extraction technology for over a decade and
while his lab experiments were so promising, the commercialization of the
technology hit a road block - funding, he still doesn’t have the cash to fully fund
the project.
A field pilot is on the
order of 50 to 60 million dollars; and while the location has been picked, a
federal grant received from Sustainable Development Technology Canada, and the
vocal support of oil patch insiders has been mustered, Nenniger has still
received five rejections for funding from the provincial government.
Difficult extractions of oil in Canada leads to the employment of new technologies
Unlike the conventional oil that flows out of
vast fields like Ghawar in Saudi Arabia, northern Alberta bitumen (a mixture of
oil, sand, clay, and metals) is a sticky tar-like substance.
About 80 per cent
of bitumen is too deep to be open pit mined, so it needs to be coaxed out of
the ground using steam assisted gravity drainage (SAGD).SAGD injects massive quantities of steam into
the ground and turns bitumen into a fluid enough substance that can be brought
to the surface.
Sounds simple enough, but
the energy needed to generate steam produces almost three times as much carbon
dioxide per barrel of oil as other crude. SAGD uses so much natural gas that in
15 years Canada will be burning 20 per cent of its natural gas just to get oil
out of the ground.
Nenniger’s technology however, uses a solvent instead of
steam to extract the bitumen, so it uses much less energy.The solvent process is also cleaner and more
specific than SAGD, it leaves behind the sulphur and coke that is currently
land-filled.
New environmental technology exists but it is a problem of proximity
“We have the technology, we have a vary
substantial and commercial advantage over SAGD, we think its on the order of $20
a barrel, so the technology is wonderful environmentally and commercially, but
it very, very difficult to get out there” Nenniger says.
For the past decade, Alberta
has been a feeding frenzy for the world’s largest oil companies. In order to
encourage investment, a compliant provincial government coupled with its
archaic royalties system has subsidized operating fuel costs for the world’s
largest oil companies, while simultaneously providing no economic incentive for
energy and resource efficiency.
The system is very harmful for companies like N-Solv,
because they actually end up paying higher taxes and royalties than energy
inefficient companies.
What happens when oil prices hit triple digits
At an Energy Services Summit in Edmonton, Alberta,
Canada, in July, former Chief Economist for CIBC World Markets, Jeff Rubin said
when oil prices hit triple digits again, the oil patch will have the incentive
to bring production up to four million bpd from the current 1.1 million bpd.
Nenniger says his technology could increase
the amount of resources available from the oil sands by as much as a factor of
four; but instead of promoting cheap oil, N-Solv blends market demand with
energy efficiency
“In terms of an engineerthat’s kind of a home run, if you can have the technical, commercial, forces
lined up in the direction of a reduced environmental footprint. That’s the best
scenario and whenever that happens its something that we celebrate,” he says.
Sarka Halas is a Czech-Canadian who grew up
during the oil boom in Alberta and has a healthy obsession with all things
energy related.She has worked for Radio
Prague (Czech Radio), the Canadian Broadcasting Corporation, The BBC World
Service, Canadian Business magazine, and Journalists for Human Rights.She is currently completing her master’s
degree as part of the Erasmus Mundus program.
