Alberta energy sector benefits from oil sands ingenuity

Athabasca Oil Sands Project, BP Canada Energy Co. top list of innovative firms

By Gordon Jaremko

February 05, 2010

Winning plaudits from green factions may not rank high on industry’s to-do list. Yet Alberta Oil’s list of innovators — from companies pioneering new supply chain relationships, to those using next-generation technologies to reshape age-old practices — proves that environmental imperatives and profit are anything but mutually exclusive. Welcome to the new frontier.

Double oil sands firsts

A one-of-a-kind production line more than 400 kilometers long positions the Athabasca Oil Sands Project for an environmental breakthrough too. About two kilometers beneath the Scotford site near Edmonton – which serves as the synthetic crude upgrader for Athabasca’s Fort McMurray bitumen mega-mine – lies an ideal disposal vault for carbon emissions, in spongy sedimentary rock capped by denser leak-proof stone.

The Scotford plant enables the Athabasca consortium of Shell Canada, Chevron Canada and Marathon Oil to advance their pioneer Quest Project as the most economic oil sands candidate for carbon capture and storage. Total costs are forecast to be about $1.4 billion for eventually disposing of 1.1 million tonnes of carbon dioxide a year, or the equivalent of emissions by 200,000 cars. The Alberta and federal governments have agreed to kick in $865 million from greenhouse gas reduction programs. But Quest would be even more expensive if the Athabasca group’s bitumen upgrader were at its northern mine. The Fort McMurray region’s geology is unsuitable for secure carbon storage. A new pipeline network has to be built for greenhouse gas disposal by other oil sands megaprojects.

Next Generation Natural Gas

With a vow to stay on top of rising environmental, community and regulatory standards for decades to come, BP Canada Energy Co. is using an emerging next generation of natural gas production technology in northern British Columbia. The company estimates that, as an integrated system, the improvements will cut carbon emissions by 90 per cent compared to established fields that were originally developed 20 or more years ago. The program also tackles other side effects of industrialization that are increasingly being frowned upon, such as noise.

The $1.4-billion budget over the next eight to 10 years for the Noel project, 20 kilometers south of Dawson Creek, includes an array of advances intended to make large-scale energy development blend into the sensitive region of farms and green woodland. The plan calls for 130 long-leg horizontal wells that will reduce land surface distubances compared to traditional drilling methods, yet still eventually produce a forecast 130 million cubic feet of gas per day for three or four decades. The vanguard technology includes silent electric motors, clean solar power sources for them, automated well control systems, a fiber optic cable network and sealed production testing that eliminates flaring and odors.

Production trendsetter

Since its birth as Alberta Energy Co. (AEC) in 1975, EnCana Corp. has evolved a method of growing through lean and hard times alike that is catching on and giving the industry a new buzz phrase – “resource plays.” AEC incubated the strategy on its first big property, the natural gas-rich Suffield Block near Medicine Hat in southeastern Alberta. The other half of the merger that created EnCana, PanCanadian Energy, independently developed a similar strategy for the vast endowment of legacy mineral rights across the West that it inherited from railway land grants to its former corporate parent, Canadian Pacific.

The method is an organization and planning style that spawns new technology. Resource plays depart from explorer traditions of tracking down sponge-like geological pools that flow naturally. The new approach focuses on large blocks of dense rock formations embedded with tightly trapped gas or oil. Using advanced tools such as computer imaging and well simulations, production systems are custom-designed to match the deposits, tested with pilot projects, then refined into factory-like repetitive operations. Resource plays are tapping gas in dense shale with horizontal wells, and rock-shattering “frac” injections of fluids under high pressure and extracting bitumen from deep oil sands deposits with horizontal wells and steam.

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