Extracting heavy oil has always been a challenge but I have watched
decades of effort, step by painfully slow step succeed. I have no
doubt that we will ultimately succeed in recovering all of it if we
desire it.
It is enough to know that all oil runs like water after around 170
degrees Fahrenheit. That is why SAGD will extract as high as 70% of
contained oil in its steam chamber.
Although I personally think we are on the cusp of exiting the oil
age, the process itself will still take a couple of decades. It will
be kept alive by the convenience of paid for technology and a legacy
of engineering flexibility and know how. Recall that the steam
engine is still used in spots and needed a full generation to be
replaced in its time. In fairness, a thermal plant is a steam
engine.
In the meantime, Canada's real oil reserves are equal to twice all the oil ever burned, and that is what we know about and can access easily.
The Hunt to Unlock
Oil Sands
In Canada, Radiowaves
and Heating Coils Are Among Efforts Used to Extract Sticky Petroleum
From Rock
By EDWARD WELSCH
ALBERTA, Canada—Ten
years ago, new oil field technologies unlocked vast crude supplies
from western Canada's oil-sands deposits, propelling America's
northern neighbor to the top echelon of the world's petroleum
repositories.
Now oil companies here
are experimenting with technologies that could unlock even more
reserves from what is some of the world's heaviest and stickiest
petroleum. The new technologies could also drive down the cost of
producing oil in Canada.
One consortium aims to
get oil flowing to the surface by sending radio waves from huge
antennae pushed through wells deep underground—adopting technology
first developed for the U.S. government to eavesdrop on underground
bunkers.
Another company is
working on inserting electrical heating coils into wells to melt the
oil, while other firms are tinkering with petroleum-based solvents
they hope to pump into wells to get more oil out.
All the
experimentation is aimed at improving a standard method of oil-sands
extraction: so-called steam-assisted gravity drainage, or SAGD.
(That is pronounced
"Sag-Dee" in industry parlance.) That technology is itself
a recent breakthrough—essentially injecting superheated steam into
wells to heat deposits of sticky bitumen, a form of petroleum, making
it liquid enough to be pumped to the surface.
The technology was
commercialized in Canada's northern Alberta province early last
decade, and helped enable oil companies to tap deeper oil-sands
reserves. For decades, most oil-sands development had more in common
with strip mining than conventional oil drilling. Companies dig up a
mix of bitumen and quartz sand and wash the sludge down with hot
water to extract the bitumen.
But those reserves
are only a 10th of the 1.7 trillion barrels of bitumen found in
Canada. Alberta's Energy Resources Conservation Board estimates there
are also more than 400 billion barrels of bitumen trapped in
carbonate rock formations in Alberta, mostly in a large formation
called the Grosmont that stretches across the center of the province.
"If we postulated
that 25% of that can be recovered, Canada could move to No. 1"
in world oil reserves, said Glen Schmidt, chief executive of
privately owned Calgary energy-technology company Laricina Energy
Ltd.
Laricina is one of several companies including Royal Dutch
Shell RDSB.LN -1.47% PLC,Athabasca
Oil Corp. ATH.T -1.38% and Husky
Energy Inc. HSE.T -1.70% that are adapting SAGD
technology to rock formations like the Grosmont and trying out new
enhancements to cut the use of fresh water and energy, which will
bring down the overall cost and greenhouse gas emissions of
operations there.
While SAGD doesn't
gobble up as much surface area as conventional oil-sands mining, it
still uses lots of energy and water. That makes it expensive and
carries a big greenhouse-gas footprint.
Basic SAGD technology
uses two horizontal wells drilled parallel to each other, one above
the other. Natural gas is used to boil water into steam, which is
injected underground into the top well. The steam heats and softens
the bitumen, separating it from the sand, causing it to drip down to
the bottom well, which sucks it back up.
Laricina is part of a consortium including large Canadian energy
companies Suncor
Energy Inc. SU -2.34% and Nexen Inc. NXY +0.15% that
is testing replacing the steam with an antenna, developed by
Melbourne, Fla., telecommunications-equipment
manufacturer Harris Corp. HRS -1.03% After
being fed down a well, the antenna blasts out heat, warming the
bitumen.
Nexen announced Monday
that Chinese international energy company Cnooc Ltd. plans to acquire
it for $15.1 billion.
Mr. Schmidt said early
tests show the technology could cut energy use by 40%. It also
removes the high upfront costs of water treatment and steam
generation facilities. That could cut the cost the cost of SAGD
production, which is currently around $55 to $65 a barrel for most
projects.
"If we eliminate
steam, we eliminate potentially 60% of the cost of a facility, which
is huge," he said. The technology could be ready as soon as
2019.
The antenna project
got started back in 2008, when Harris was working on technology aimed
at improving underground listening capabilities for the U.S.
Government.
As part of its
research, Harris executives sought out oil field experts experienced
in horizontal drilling techniques.
"We were trying
to gain access to underground facilities, underground locations, so
we had to bring in people who had specialties in horizontal
drilling," Wes Covell, a Harris vice president, said. He
declined to be more specific about what he said was a classified
project.
Harris executives had
an epiphany when the drilling experts mentioned the Canadian oil
industry's problem of getting energy-efficient heat to travel down
horizontal wells into the bitumen reservoirs deep underground.
Harris and other
antenna designers try to reduce electromagnetic heat as much as
possible to improve the efficiency of a radio antenna for
communication. Harris "realized that we can take our antennae
and instead of using them for communications, we can use them as a
source of electromagnetic energy that generates heat," Mr.
Covell said.
Athabasca Oil, another
big Canadian oil producer, is testing a similar electric-heating
technology to unlock bitumen from carbonate rock. The company inserts
electric coils, made of the same material as heating elements on a
stovetop, into wells. If tests are successful, Athabasca plans to
start a commercial project for its technology by 2018.
Laricina and several
other companies are also testing adding light hydrocarbon solvents to
steam in SAGD wells to boost output. The solvent dilutes bitumen,
making it easier to flow.
Cenovus
Energy ICVE -1.72%nc. is working on a solvent
project that could be rolled out commercially in 2017.
Jason Abbate, head of
production engineering at one of Cenovus' projects, said solvent
technology could increase oil production rates by up to 25% and cut
the amount of steam and natural gas use by up to 30%. It could also
improve the percentage of oil that producers can capture from bitumen
deposits.
"If you can get
80% to 90% of that rather than the regular 70% with SAGD, there's a
big economic benefit for us," Mr. Abbate said.
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