Measured development ideal for megamines, Nexen Inc. VP says
Oil sands megamine projects are keeping in step with construction costs and energy price outlooks
Containing an estimated four billion barrels of recoverable reserves, the Mobil oil sands asset stood out as one of the big prizes in the $81-billion corporate combination deal. As the project inched through federal and provincial regulatory reviews, Exxon senior vice-president Stuart McGill told international financial analysts that “Kearl is the best of the undeveloped mining resources” in the Alberta bitumen belt. “We are being judicious about the development pace, and designing strategies to mitigate the overheated cost environment in the Fort McMurray area. We will invest in this large, high-quality resource when the project is ready and robust.”
McGill retired before Kearl’s hour arrived, but the plan did not change. “We take a long-term, conservative view,” Rolheiser confirmed. “We’re talking about a project that’s going to last 50 or 60 years.”
Imperial is building on insider experience and knowledge as a 25 per cent owner of the biggest oil sands mine, 41-year-old Syncrude Canada. Kearl adopts technology invented by the Syncrude consortium’s Edmonton research center and responds to environmental and socio-economic concerns in the Fort McMurray mining district.
Among the advances, an improved version of the 80-year-old hot water process
for separating bitumen from sand will cut its temperature, energy consumption, costs and greenhouse gas emissions. Between the processing site and the mine’s jumbo earthmoving equipment, hydrotransport pipelines that simultaneously carry and treat a blend of ore and water will enhance production efficiency.
Only one compact tailings pond will be created, as temporary waste storage for the first 10 to 12 years of mining. As the operation grows, a new process, known as consolidated tailings, will congeal clay, sand and residual bitumen leftover from the extraction system into lumps for immediate separation from water. Rather than repeat the older mine practice of storing yogurt-like waste fluid for decades in growing hazardous ponds, the new cleanup system will put tailings grains back into emptied ore pits as part of a reclaim-as-you-mine program.
Environmental measures include “compensation lakes.” About twice as much fish habitat as the mine takes away with stream diversions will be replaced by extensions of Kearl Lake, the main natural feature of the project region. The added aquatic room will be stocked with native species chosen by the aboriginal community. A water reservoir will also be developed. Storage will be topped up from the Athabasca River when it runs full in spring and summer, and drawn down in winters of low flows and deep freezes.
Community disturbance will be kept to a minimum. The project will skip over notoriously congested, expensive Fort McMurray.
Mine employees, starting at 550 and eventually increasing to 1,200, will be housed in a permanent camp that provides medical and training services. A new airstrip will be built for commuter flights between Kearl and Edmonton.
The site is only 70 kilometers northeast of Fort McMurray as the crow flies, but by road it is a hazardous 110-kilometer drive that takes 90 minutes in good conditions. “For a shift worker,” putting in the industry’s standard 12-hour day, “this would mean being away from home for at least 15 hours a day,” Imperial’s development application said. Without the self-sufficient mine village, the remote location would be “an obstacle to creating a safe, healthy, productive and efficient work environment.”
ExxonMobil expects markets to justify building up Kearl into its full potential size. While cutting previous forecasts to reflect improved energy conservation, the world’s top investor-owned oil empire still predicts global demand for liquid fossil fuels will rise by 30 per cent to 108 million barrels a day over the next quarter-century.
As the biggest development target open to private industry on the planet, oil sands output is projected to triple even at the more measured pace expected in the wake of the 2008 economic slump. ExxonMobil predicts, “Canadian oil sands production should reach about four million barrels a day by 2030.”
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