Synthetic oil prospects are very real in sandy reserves of Canada
PPROBABLY when most people think of oil-rich nations, Saudi Arabia, Iraq, Mexico, perhaps Venezuela, come to mind. They may forget Canada. Yet this past summer the United States imported some 700,000 barrels per day from Alberta and Saskatchewan. That was more oil than the US got from any other country.
Moreover, Canada has more ``black gold'' than even Saudi Arabia. If the oil sands north of here are included, Canadian reserves amount to well over 1 trillion barrels - enough to last hundreds of years.
Sure, someone may retort, but it's too expensive to exploit those oil sands.
``People may get the impression it [synthetic oil] is dead,'' notes Maurice A. Carrigy, vice-chairman of Alberta's Oil Sands Technology & Research Authority.
After all, the US spent billions on a crash program during the late 1970s and early '80s to find economic technologies for producing synthetic oil from shale or other sources. The money has not produced much in the way of solid results.
``They [the US] didn't go about it the right way,'' comments Mr. Carrigy, a geologist.
Canada's synthetic oil program was tackled differently. Like the turtle in Aesop's fable, Canada moved slowly but steadily with its research and development. It has spent C$1 billion (US$760 million) over 10 or so years to devise technologies that now show strong promise of making economic production from the more abundant viscous and deeper oil sands.
The Alberta government financed some of the R&D or shared with the oil industry in its cost. Private companies have paid about half the C$1 billion costs so far.
``Companies can't afford to do years of testing before they get any financial results,'' Carrigy contends. ``So the government has a role to play here.''
Whatever the government's role, research success will be vital to the world's reliance on petroleum for vast amounts of energy.
Today there may be a superabundance of relatively low-cost light oil. But much of this resource, with the exception of Saudi Arabian and Iraqi oil, will be depleted in the not too distant future. American oil production has been heading down steadily for some time.
About 10 percent of the 1 trillion barrels of heavy oil and bitumen in Alberta's tar sands is close enough to the surface that it can be exploited by open pit mining.
The first such mine, owned by Suncor OIl, was opened in 1967 about 235 miles north of here. It was joined by Syncrude in 1978, several miles north of the first mine in the Fort McMurray area.
At the moment, these mines produce roughly 180,000 barrels a day, or about 13 percent of total Canadian crude production. Suncor announced in July it would spend C$150 million to expand its current capacity of 63,000 b.p.d. to 73,000 b.p.d.
Myron Kanik, deputy minister of energy, hopes ``in the next three or four months'' to sign a deal with Esso Resources Canada Ltd. for the first phase of a third C$4.2 billion, 75,000-b.p.d. mine in Oslo, across the Athabasca River from the existing mines.
All these mines basically just wash the bitumen out of the sand with hot water. This extracts 85 to 90 percent of the oil from the sand.
A successful method for exploiting deeper oil sands involves injecting steam down a drill hole into the underground sand for about a month. That makes the heavy oil and bitumen more fluid, and about 20 percent of it can be pumped to the surface.
This technique works in the oil sands around Cold Lake, east of Edmonton, and in other deposits in the Peace River area to the northwest of here. Esso, the largest producer, is pumping 100,000 b.p.d. at Cold Lake. Last summer it announced plans to spend C$325 million to add another 40,000 barrels of capacity by 1991.
At the largest oil sands deposit, however, the Athabasca field, the bitumen is too stubborn to be loosed from the sand efficiently by steam ejection from the surface. The massive deep deposits, being too far down for open-pit mining, have not been exploitable so far.
Carrigy, though, hopes his research authority has a solution. It has sunk two mining shafts 600 feet down into an oil sands site to a depth 30 or 40 feet below the deposits. Then it tunneled under the deposits and drilled upward and sideways through the oil sands. In two or three weeks it will start pumping hot steam through those pipes into the sand.
The oil, it is expected, will soon be flowing by gravity through other pipes into the underground passages and pumped to the surface.
If all goes well, this underground test process will recover about 50 percent of the oil from the sand, pumping out 10,000 barrels a day at this one test site. After about a year of testing, it is hoped the process will be found cheaper and quicker than the in situ steam technology used at Cold Lake.
That underground technique could make another 200 billion to 300 billion barrels of oil accessible to mankind. That is a huge amount of oil. It may mean our grandchildren will be able to fuel their cars with oil.