Imperial Oil mulls long-term water-less oil sands extraction
A novel technique could redefine sustainable development
Bruce March was speaking at an investor meeting in Toronto this winter, when in the middle of a presentation that focused on Imperial Oil Ltd.’s reserve base and ambitious growth plans, he uttered the words “non-aqueous extraction.”
“This technology would be a huge breakthrough from a number of perspectives,” the president, chairman and CEO of the Calgary-based company told the crowd.
“Energy costs would be much lower because the need for hot water would be largely eliminated. And it would eliminate the need for fluid tailings ponds altogether. This is only one example of our company’s focus on responsible development of Canada’s oil sands, and how the ongoing use of technology to develop one of the world’s largest recoverable energy resources is being developed.”
It was a bold statement. For the rub with the oil sands is that recovering a large portion of Alberta’s 169 billion barrels of reserves is no sure thing. Concern about water usage, carbon emissions, tailings ponds and how to remediate old strip mines means the Canadian Association of Petroleum Producers’ lofty projections of Canada going from producing 1.6 million barrels of oil sands per day in 2011 to 3.7 million barrels per day by 2025 could fail to materialize.
The sector is under increasing pressure to use less water, emit less carbon dioxide and disturb less land as it goes about developing the oil sands. While environmentalists beg to differ, players in the oil sands recognize this and they are taking steps to do something about it.
Enter Imperial Oil’s non-aqueous extraction (NAE) technology. It hasn’t even hit the pilot stage yet, but the technology has the potential to be a game changer for the industry. All oil sands mining operations use a version of the hot water separation process pioneered by Karl Clark at the Alberta Research Council in the 1920s to forcefully separate the bitumen from the sand and clay mixed with it. The process requires a lot of energy to heat the water, and the waste produced during the separation process must be dumped into large, unsightly and toxic tailings ponds.
The NAE technology could do away with all that. In a nutshell, the process involves placing the mined sand in a container. Then an organic solvent and a very small amount of water are added to the mix creating a liquid slurry. The lid is then closed and the contents get spun around the container like wet clothes in a dryer.
The rotation binds all the solids into ball-shaped forms. Then the bitumen and solvent are removed through a screening operation. A final process separates the bitumen and the solvent and the result is a bitumen product. The sand and clay that is left over can be placed back into the mine as dry tailings – eliminating the need for tailings ponds. In its 2011 annual report, Imperial says its NAE technology would reduce overall water use in the oil sands extraction process by more than 90 per cent.
A group of sell-side analysts got an exclusive look at the technology’s potential during a January tour of Imperial’s Calgary research lab. A demonstration of NAE was given and analysts from Calgary-based investment boutique FirstEnergy Capital came away impressed. But its analysts recognize how far away the process is from being ready to use at oil sands mines.
“This technology may not be ready for commercial implementation until the next decade. And if so, likely would not be applied at the Kearl [mine] project,” FirstEnergy analyst Michael Dunn wrote in a note to clients. “However, Imperial has other mining leases, and the intent is to move this process to commercialization for a mine that might get built in the 2020s.