Part of the Kearl oil sands mine. Photo: Courtesy Imperial.

This is not your grandparents’ oil sands

How oil sands leaders are setting out to create low-GHG oil as good or better than the U.S. average.

There are some critics who have labelled Canada’s oil sands “dirty oil” due to the relatively energy-intensive methods needed to extract it out of the ground. However, the Canadian oil sands industry has worked hard to improve environmental performance: minimizing their impact on air, land, water and wildlife through their commitment to innovation and technology development. And that commitment is paying off.

The latest oil sands projects employ technologies and approaches that significantly reduce greenhouse gas (GHG) emissions. Context: Energy Examined spoke recently with two oil sands producers who have unveiled projects that produce oil at about the same level of GHG emissions as an average barrel of oil refined in the United States. They highlight their efforts, and how new innovations in development could lower GHGs even further.

Major players, major commitments

In August 2018, Imperial publicly announced a new commitment to cut GHG emissions intensity from oil sands projects by 10 per cent by 2023. The company plans to achieve this through technologies and efficiency improvements at its Kearl oil sands mine near Fort McMurray and its Cold Lake operations in northeastern Alberta.

In the Calgary Herald, Rich Kruger, Imperial’s chairman, president and CEO, was quoted as saying: “This isn’t your grandparents’ bitumen anymore. What we’re doing is taking an oil sands mine and essentially producing a hydrocarbon barrel that has the same level of carbon intensity as the average barrel refined in North America today.”

Imperial CEO Rich Kruger speaks during a tour of Imperial’s oil sands research centre, August, 2018. Photo: THE CANADIAN PRESS/Jeff McIntosh

A month later Suncor officials made a similar declaration during opening ceremonies for their new Fort Hills mine. Calling the mine “the new face of the oil sands,” former Suncor president and CEO Steve Williams said the mine would produce a barrel of oil “that’s on par” with average refined crude in the United States.

These are bold statements by two of the industry’s major players.

Suncor is Canada’s largest independent producer while Imperial is Canada’s largest petroleum refiner. These two have much in common: both have deep roots in the oil sands business (Suncor since starting its first mine near Fort McMurray in 1967; Imperial since beginning an experimental program in 1964 to extract bitumen at Cold Lake). They both share a deep belief in continuous improvement, spending hundreds of millions of dollars each year to create new, more efficient, environmentally effective technologies.

Former Suncor CEO Steve Williams says Fort Hills is “the new face of the oil sands”. Williams (right) seen here at the Fort Hills grand opening in September 2018. Photo: THE CANADIAN PRESS/Jason Franson

And they are not alone. Almost all of Canada’s major oil sands producers have signaled a deep commitment to collaborative innovation and improved environmental outcomes through membership in Canada’s Oil Sands Innovation Alliance (COSIA). COSIA members have spent more than $1.4 billion developing and sharing nearly 1,000 distinct environmental technologies, with over half a billion dollars dedicated to active projects. COSIA reported last year that GHG emissions intensity for members has fallen by 11 percent and 9 percent for in situ and mining projects respectively. Some members have has set goals of cutting GHG emissions intensity from another 10 per cent over five years, to 30 per cent by 2030.

PFT is a game changer

Paraffinic froth treatment, or PFT, has been a key technology for both Suncor and Imperial’s latest projects.

PFT has been a core part of the Kearl mine, ever since operations started up six years ago, and produced 206,000 barrels-a-day in 2018. Taking technology originally conceived through an industry consortium, Imperial’s scientists and engineers refined the process to suit Kearl.

This breakthrough invention has proven to be a big success at Kearl. PFT processes bitumen to remove a portion of the heavy ends of the barrel (asphaltenes), using less energy and saving costs. This results in a lighter, higher quality bitumen along with substantially lower GHG emissions intensity. (Note: emissions intensity is the amount of GHG emissions per barrel of oil produced.)

“It’s one of the things that’s allows us to talk about Kearl as a next-generation oil sands operation. It’s achieving lower greenhouse gas intensity as planned, and it’s integral to the product we ship by pipeline,” says Stuart Lunn, Imperial’s vice-president of policy and advocacy.

Likewise, Suncor has also made PFT a centrepiece of Fort Hills, which started up in early 2018 and is now producing 194,000 barrels-a-day.

Like Kearl, the Fort Hills mine uses the less carbon-intensive PFT process to convert bitumen into a cleaner, higher quality product.

According to Gary Bunio, Suncor’s general manager of oil sands strategic technology, the addition of PFT has been well worth the investment. In just a year its impact has been significant—so much so, that overall GHG emissions intensity at the mine is on par with average crude refined in the U.S.

“PFT was a large step. Not only are we lowering GHG emissions at our own plant, we’re lowering emissions at our customers’ processing plants and at our own refineries downstream,” Bunio says.

In the case of each company, implementation of PFT has been game-changing and they’re proud of what’s been achieved. However, they’re not stopping there when it comes to investing in cleaner technology.

Hydrocarbon solvents could help solve GHGs

“We consider our technology development even more important in this low-price environment because we want to accelerate technology that leads to lower capital expenditures, lower operating costs and a lower environmental footprint,” Bunio says.

At Fort Hills, Suncor has a substantial research effort underway to develop a new technology that could reduce, even eliminate, the need for water to extract bitumen in oil sands mining. By replacing water requirements with hydrocarbon solvents, the company could curb water usage and the need for tailings ponds while reducing its GHGs.

“Right now, we’re looking at if it’s possible to get the most, if not all, of the water out of bitumen extraction and replace it with hydrocarbon solvents,” Bunio says, of the project that’s just completed bench-scale testing. The company is now in the early stages of planning a commercial-scale pilot.

Cheryl Trudell is looking for ways to lower GHG intensity at Imperial’s Aspen project. Trudell is Imperial’s vice-president upstream research. Photo: Courtesy Imperial.

Similarly, as Imperial builds on PFT and other efficiencies at Kearl (the company wants to keep energy use flat while adding production capacity), the focus is on new technologies that could achieve even greater GHG emissions intensity reductions.

If developed, Imperial’s Aspen project, situated south of Kearl could have one of the lowest GHG emissions intensity in the in situ industry.

Helping to deliver this GHG intensity will be a new solvent-assisted, steam-assisted gravity drainage (SA-SAGD) process. Injecting a 20 per cent light hydrocarbon mixture underground, with some steam, mobilizes the heavy oil so it can be brought more easily to the surface.

“It basically lowers the steam-oil ratio and GHG emission intensity and water-use intensity by up to 25 per cent, compared with traditional steam assisted gravity drainage (SAGD) technology,” says Cheryl Trudell, Imperial’s upstream research vice-president.

To prepare, Imperial tested the SA-SAGD technology through a field pilot at Cold Lake for five years, and this effort is ongoing.

“We continue to learn from the pilot and enhance the technology,” Trudell says of the research.

Continuous improvement and step-out technologies

Across the oil sands industry, there’s a busy agenda of research activity with different technologies at different stages to increasingly decarbonize bitumen.

Suncor, for instance, sees as a next big challenge finding new “step-out” extraction technologies at its in situ developments. As Bunio explains, these hold the potential to not only reduce costs but to also significantly lower GHG emissions intensity—if successful by as much as 50 to 70 per cent.

This effort could include advancing a technique called electromagnetic assisted solvent extraction (EASE). Combining electromagnetic heating with a light solvent, this innovation has the potential to eliminate the need for steam, which would in turn reduce energy usage and therefore, GHG emissions. A demonstration project for EASE is planned for 2019.

Stuart Lunn calls Kearl a “next-generation oil sands operation.” Lunn is Imperial’s vice-president of policy and advocacy.

“The fact is with these technologies we could see oil sands not being just on par in GHG emissions intensity but moving to being significantly below average on a North American basis,” Bunio says.

At Imperial’s research centre in Calgary, Trudell and her team are investigating a bold, new evolution of SAGD called enhanced bitumen recovery technology (EBRT). This process significantly increases the amount of light hydrocarbon injection to a 90 per cent mixture.

So far, the team has completed initial tests to understand project physics, using a “reservoir box” or pressurized vessel. Filled with glass beads, the box contains a miniature-sized wellbore configuration and is equipped with different pressure and temperature sensors.

It’s still early days for the technology, but lab results have been positive. According to Trudell, tests show potential to lower GHG emissions intensity by up to 60 per cent and reduce stream requirements by up to 90 per cent compared to current SAGD methods. At the same time, the technology, which operates at a lower pressure, could reduce initial capital and operating costs and unlock reservoirs previously considered unviable.

It’s a promising start—one that was recognized with a $10 million funding grant in 2018 from Emissions Reduction Alberta. To prove up the concept further, the company intends to carry out a field trial within the next few years.

“We’re planning to get out in the field to get operational learnings,” Trudell says.

Learning from history, building on innovation

In the meantime, Trudell’s team continues to use the reservoir box to run additional tests, trying out different operating pressures and different light hydrocarbon/steam combinations. Not too far away from their work area stands a physical experimental model used in the 1970s by Roger Butler, then a research scientist at Imperial, to develop SAGD, today’s most commonly used technique for in situ development. For the team, the model is a source of inspiration.

“It’s a memento of what’s really possible,” Trudell says.

It’s a scene of research activity that sums up the sense of possibility that is shared not only by this team, but by others across the industry. In talking to them, there’s a palpable awareness that each is adding to this legacy of accomplishment as they work hard to create cleaner bitumen.

Much is at stake, and they know it.

“When we look at what we’re doing with different solvent technologies, we’re going to do even better when it comes to managing GHG emission intensities. It’s exciting,” Lunn says.

Bunio agrees: “If we can cut GHG intensity from the oil sands by a third and even more, there’s a significant runway here for the industry. It starts with PFT and ends up with a completely transformative way to think about oil sands development.”