Oil sands operators turn to electric currents
'It will be like moving from the cart and horse to the automobile if we get it right.'
Illustration by Kelly Sutherland
Too deep to mine and too shallow for steam” is how Bruce McGee describes the middle child of bitumen reserves in Alberta’s oil sands. Sitting between 50 and 150 meters below the earth’s surface, the range has mostly gone untapped by producers in the Athabasca region, but it’s the “sweet spot” for McGee and E-T Energy Ltd. Estimates put Alberta’s recoverable reserves of bitumen close to 170 billion barrels. “Mining accounts for just eight billion of it,” says McGee, E-T Energy’s president and chief executive. “It doesn’t have a long life left, relative to in situ.”
High oil prices and new technology have allowed producers to dig deeper, using steam-assisted gravity drainage techniques to pull oil from thousands of feet underground. A typical SAGD well uses natural gas to turn water into steam in an effort to heat and thin the bitumen enough for it to flow up through a well. McGee turned to electrothermal dynamic stripping process (ET-DSP) technology in 2004 in the hopes of accessing what the underground extraction technique and strip mining leave behind.
His technology uses electricity to heat and thin oil reserves, as opposed to burning natural gas and using water resources. After completing trials of the technology, E-T has received a $6.86-million endorsement from Alberta’s Climate Change Emissions Management Corporation (CCEMC) and teamed up with Total E&P Canada Ltd. to help advance a 10,000-barrel-per-day development at Poplar Creek.
Although it’s only been in the past few years that SAGD projects have started to populate the oil sands landscape, in situ technology has been around much longer, going back to experiments conducted by Roger Butler at a Calgary research center run by Imperial Oil Ltd. in the 1970s. The work behind McGee’s ET-DSP has likewise evolved over time. McGee worked at Shell Canada Ltd. before pursuing a PhD in electrical engineering. His thesis, reflecting his professional experience, explored electric heating of heavy oil deposits. “I was going to work on lasers and their ability to burn out cancer cells,” he recalls. “But I was in the oil industry and it seemed like an amazing approach to extracting large amounts of bitumen.”
He drew on research conducted by professors at the University of Alberta, as well as the work of researchers at the University of California Berkeley in the Golden State’s heavy oil fields. At the time, commercial applications for the novel technology were few and far between, so McGee started a consulting firm working on environmental remediation of contaminated sites.
Not surprisingly, McMillan-McGee Corp. harnesses electric currents to get the job done. The Calgary firm has applied its specialty services to clean up spoiled industrial sites around the world. The technique passes electricity underground to safely remove chemicals from contaminated soil by burning them off or recovering them for treatment. The firm’s first consulting job, at a project in Livermore, California, attracted an unusual level of interest. “The project was written up in Scientific American and then we started getting calls from around the world,” McGee recalls.
As the firm graduated from consulting to conducting environmental cleanups at contaminated sites, McGee couldn’t shake the feeling that he needed to get back into the oil and gas industry. Soaring commodity prices provided a powerful incentive to make the move, but doubts about the salability of using electric currents to recover bitumen remained. “I didn’t think we’d get far selling the technology to mining or SAGD companies. They don’t understand it and it’s not a commercial technology,” McGee says. “We figured the best way to develop it was to bid on land and it was probably the smartest thing we’ve done.” Between 2004 and 2007, E-T Energy snapped up 10,560 acres in the southwest corner of the Athabasca oil sands region. The Calgary-based firm, still privately held, now holds a 100 per cent working interest in the land and estimates it has the potential to produce 1.2 billion barrels of bitumen.
Using electric currents to unlock reserves of bitumen only sounds like a far-fetched bit of science fiction. At E-T’s Poplar Creek property, a series of electrode wells will be drilled approximately 16 meters apart. Electricity drawn from a nearby substation passes between the wells, heating the bitumen. Water from the formation helps move the electrical current between the wells. This water is separated from the oil and treated at the surface before being recycled through the well system, kind of like radiator fluid, to help control the direction and conductivity of the electrical currents.
Once a grid of wells has reached the end of its production cycle – expected to last about a year – the entire setup is moved to another square section on site, and remediation work gets underway. The rotating process is not much different from a farmer rotating crops, McGee says. He thinks the pattern of development could accelerate reclamation of disturbed land, one of several environmental advantages proponents of electric production say give the technology a leg up on its conventional rivals.
McGee says the operation is cheaper to run than SAGD because surface facilities involved in the process are smaller. Nor does the E-T apparatus require giant trucks or shovels associated with surface mining, froth treatment equipment, boilers, high-pressure steam lines, massive separation “vessels” or tailings ponds. McGee expects the technique, which also cuts water use and shaves requirements for natural gas, will be further refined through use at Poplar Creek. “We’ll have to do multiple tests to understand the reservoir response, test different cables and connections,” he says.
The trials will be aided by Total E&P Canada. The two firms struck a “technology co-operation agreement” in April that commits the Canadian arm of the French oil major to providing financial and technical support to the project’s next two phases. The testing with Total is expected to last one year and commercial production of 10,000 barrels per day could start as early as 2013.
Interest in using electric currents to draw out hard-to-reach reserves of bitumen is growing. “The emerging use of electricity has lots of history behind it, so there are probably more companies using it than admitted,” notes Mauro Cimolai, technology advisor for Laricina Energy Ltd. “But while they’re all using electricity, they fall into slightly different camps.”
His Calgary firm, although a fairly new kid on the energy block, is working hard to crack the dense Grosmont formation, where estimated reserves top 300 billion barrels. (The total is not counted in Alberta’s official reserve estimates because there is no production in the formation). Launched in 2005, Laricina has five core project developments comprising an estimated 4.6 billion barrels of recoverable bitumen. All the projects use traditional in situ production methods – except one, which uses electricity as its main energy source.
The technology, long overlooked by cost conscious companies hesitant to sink millions of dollars into field testing an uncertain bet, is getting a second look thanks mainly to high oil prices. Cimolai recalls, “With the price of oil and the price of equipment, the cost of electricity was just high enough to put this out of arm’s reach. With $100 oil or better, all of a sudden using electricity becomes more intriguing.”
Laricina has partnered with Suncor Energy Inc., Nexen Inc., and Harris Corp. to advance commercial applications of the technology through a partnership known as the Enhanced Solvent Extraction Incorporating Electromagnetic Heating (ESEIEH and pronounced “easy”) consortium. Unlike McGee’s system, the Laricina-led venture, backed by $16.5 million from Alberta’s CCEMC, is not creating a new process. Instead the companies are just tweaking current SAGD extraction methods.
The drilling will still result in two horizontal well pairs, only the ESEIEH process will see the addition of an antenna. Instead of using natural gas to heat water and force steam into the reservoir, an electromagnetic field from the antenna is sent through the bitumen and a solvent is injected to increase heating and dilution. Cimolai says electricity has been used as a power source for so long and is so well understood that it is easier to control. The same can’t be said for steam. “With steam you pump it in and it goes where it goes by brute force, but there’s not a lot of control to where steam goes,” Cimolai says.
The ESEIEH project is being touted for its environmental, as well as its operational, benefits. “If you can go to a process that eliminates steam and water to heat the reservoir, you can eliminate greenhouse gas emissions,” says Bill MacFarlane, senior research and development advisor with Nexen. He says the project will also test the economics of the process. “How much infrastructure do you need? How much are energy costs? How fast does the temperature rise? What’s the distance from the well bore? We need metrics to go into a full-scale demonstration to show it is cost [effective].”
Harris Corp. brings more than 50 years of electromagnetic experience to the partnership, including contracts designing networks and radar systems for the U.S. Department of Defense. “What I’m excited about is it’s a good model for seeing technology rapidly evolve,” MacFarlane adds. “The future of the industry in research and development will rapidly develop, not through academia, but through partnerships like this.”
With the ESEIEH project launching just last year, it’s not expected to wrap up until 2014. Commercial use could still be 10 years away, but Cimolai is eager for that day to arrive. “The benefits are strong enough where people will drop the old techniques and will pick up this technology,” he says. “It will be like moving from the cart and horse to the automobile if we get it right.”