Saturday, March 21, 2009

Elizabeth Kolbert: Canadian tar sands, oil shale, synthetic crude, peak oil, SAGD, bitumen, strip mining, ExxonMobil, Chevron

Unconventional Crude

Canada’s synthetic-fuels boom.

by Elizabeth Kolbert, The New Yorker, November 12, 2007

The town of Fort McMurray occupies a set of irregularly spaced hillsides on either side of the Athabasca River, in northern Alberta. It has a dozen check-cashing joints, a roughly equal number of hotels, and a gaming center called the Boomtown Casino. It also has a museum, which is devoted to the region’s most important resource, the Alberta tar sands. Exhibits include an eight-foot-long rotor, half of a hundred-and-fifty-ton truck, and a pump of Brobdingnagian proportions. Near the entrance to the museum sits a black mound covered by a clear plastic dome. A sign invites visitors to scratch around in the mound with a little retractable rake, then lift up a flap and take a sniff. Tar sands look like dirt and smell like diesel fuel.

The tar sands begin near the border of Saskatchewan, around the latitude of Edmonton, and extend, in three major deposits, north and west almost to British Columbia. All in all, they cover—or, more accurately, underlie—some fifty-seven thousand square miles, an area roughly the size of Florida. It is believed that they were pushed into their present location seventy million years ago by the uplift of the Rocky Mountains.

For the most part, the tar sands consist of quartzite, clay, and water. The other ingredient—the “tar”—is a mixture of very heavy hydrocarbons known as bitumen. Bitumen can be used as a sealant—supposedly the word “mummy” is derived from the term in ancient Persian—and as a paving material. With the right technology, it can also be converted into a form of petroleum known as synthetic crude.

There are two ways to assess the world’s oil supply. One is to consider only conventional reserves—the sort of oil that comes gushing out of the ground. Estimates of conventional reserves vary widely, but most analyses suggest that their output will begin to decline sometime in the next few decades (if it hasn’t already)—a development that so-called “peak oilers” predict will lead to a variety of gruesome consequences, including blackouts, food shortages, and general economic collapse. The second way is to look beyond conventional reserves to unconventional ones, like the tar sands.

It is estimated that there is enough bitumen in Alberta to yield 1.7 trillion barrels of synthetic crude. Assuming that only ten per cent of this is actually recoverable, it still represents the second-largest oil reserve in the world, after Saudi Arabia’s, and more oil than is contained in the reserves of Kuwait, Norway, and Russia put together. Unconventional crude can be found in many other parts of the globe besides Canada; these include eastern Venezuela, which is home to a huge tar-sandslike deposit called the Faja Petrolífera del Orinoco, and portions of Colorado, Utah, and Wyoming, where there’s a thick layer of oil shale known as the Green River Formation. Even coal can be converted into liquid fuel. During the Second World War, the Nazis employed a technique called the Fischer-Tropsch process; the same process is now in use in several countries, most notably South Africa, which invested heavily in coal-to-liquids technology during the apartheid era. Build enough coal-to-liquids plants and places like Montana and West Virginia could one day become major petroleum producers.

In Fort McMurray, what might be called the world’s first unconventional oil boom is already under way. Since 2002, Shell, ConocoPhillips, Chevron, and Imperial Oil, which is primarily owned by ExxonMobil, have all received approval to construct major projects in the tar sands; Total has announced its intention to follow suit. Over the next five years, investment in the Fort McMurray area is expected to amount to more than seventy-five billion dollars. Residents of the town have taken to calling it Fort McMoney.

Thanks in large part to what’s happening in the tar sands—output now tops a million barrels a day—Canada has become America’s No. 1 source of imported oil; the country supplies the United States with more petroleum than all of the nations of the Persian Gulf combined. (If you have bought gas recently in Colorado, Ohio, or Indiana—states where tar-sands oil is refined—you are probably driving around with a piece of northern Alberta in your tank.) By 2010, the tar sands’ yield is expected to double, and by 2015 to triple. Crude from the tar sands and other unconventional sources could keep oil flowing well into the middle of the century, and perhaps beyond. Depending on how you look at things, this is either a heartening prospect or a terrifying one.

The company that has been producing oil from the tar sands the longest is known as Suncor. (Suncor used to be a part of Sun Oil, now Sunoco, but today it is owned and operated independently.) One day this summer, I went to take a tour of its operations, which sprawl across several hundred square miles. I was picked up at the entrance to the site by a grandmotherly guide named Gloria Jackson, and together we went to fetch another Suncor official, named Darin Zandee. “There’s no blasts today, so that’s good,” Zandee said, referring to the charges that are periodically set off to loosen the sands. We drove up to a lookout, from which we could see, spread before us, Suncor’s newest mine, the Millennium. Rings of jet-black earthworks were scattered across an enormous pit, an arrangement that might have been based on a blueprint from the Inferno.

The Millennium Mine opened in 2002. Suncor expects to continue to pull tar sands out of it for the next twenty-five years. By then the pit, which is now roughly two miles in diameter, will be six miles across. We drove over the edge of the mine and slowly made our way down to the bottom. There a huge, Mike Mulligan-esque shovel was standing idle. Its bucket hung in midair, steel teeth glinting. Zandee said that to lift one of the teeth would require thirty men—“That gives you a sense of the scale.” A gargantuan truck rumbled by. Zandee estimated that it was carrying about three hundred tons. “That’s some of our smaller equipment,” he said. The largest truck in the mine—the Caterpillar 797B—can haul more than four hundred tons. It has twelve-foot-tall tires, and its cab sits twenty-one feet off the ground. Driving one, I was told, is like trying to steer a house while peering out the window of the upstairs bathroom.

At the Millennium, the tar sands start at a depth of roughly a hundred feet and extend down in a more or less continuous layer, known as the “feed,” for about a hundred and fifty feet. Before mining begins, everything above the feed—trees, bushes, grass, soil, rocks, wildlife—gets scooped up and carted away. (The material is delicately referred to as “overburden.”) Below the tar sands, there’s a thick layer of limestone, the remains of an ancient ocean that once covered Alberta. Suncor mines some of the limestone, too, and uses it to shore up the roads in the pit. What with the overburden and the tar sands and the limestone, Zandee said, “We try to move a million tons a day.” He pointed out a truck in the distance that was dumping a load of tar sands onto what looked like a large platform. The platform was actually a grate, through which the sands were being fed into a giant tank of hot water.

In any given load of sands, only about ten per cent is bitumen; to produce synthetic crude, the other ninety per cent has to be separated out. In the hot-water tank, the sands get spun around; the liberated bitumen is then siphoned off. For every barrel of synthetic crude that Suncor eventually produces, forty-five hundred pounds of tar sands have to be dug up and separated.

We made our way out of the pit and headed on, following the bitumen to its next stop, the upgrader. Along the way, we passed a murky expanse of water with oily scum on the surface. A few dozen scarecrow-like creatures, fixed to empty barrels, were bobbing on top. This, Gloria Jackson explained, was a tailings pond; it held water that had been used in the separation process and was too contaminated with mercury and other toxins to be released back into the Athabasca. (Suncor has nine such ponds, which collectively cover an area of eleven square miles.) The scarecrows, known as “bitumen,” were supposed to discourage birds from landing on the pond and poisoning themselves. Every minute or so, a dull boom filled the air. This was the sound of a propane cannon, another bird-intimidation device.

The primary difference between bitumen and ordinary crude is the size of the hydrocarbon molecules: in liquid oil, these molecules contain between five and twenty carbon atoms, while in bitumen they contain more than twenty. (At room temperature, pure bitumen is so viscous that it will not flow.) The main job of the upgrader is to break down the oversized hydrocarbons into smaller units. We drove along roads with names like Sulphur Street and Diesel Alley and pulled up to a huge refinery-like complex that covered several square blocks. There were dozens of smokestacks and tanks, and more pipes than could possibly be counted. Jackson explained that somewhere inside this maze the bitumen would be “cracked,” at a temperature of nearly nine hundred degrees. After that, in the form of synthetic crude, it would be piped to specially outfitted refineries, either in the United States or Canada, to be converted largely into transportation fuels—gasoline for cars, diesel for trucks, and jet fuel for planes. (Suncor owns a refinery near Denver that processes tar-sands oil.) I had told Jackson that I had twin boys at home, and at the end of the tour she handed me two yellow Matchbox-size versions of the 797B.

American accounts usually give the start of the oil age as 1859, the year that a former railroad conductor named Edwin L. Drake drilled his first successful well, near Titusville, Pennsylvania. Canadian accounts go back a year earlier, to 1858, when a businessman named James Miller Williams decided to dig a well for drinking water outside the town of Bear Creek, Ontario. Instead of water, he struck oil.

Efforts to extract oil from the tar sands soon followed. Entrepreneurs and con men sunk dozens of wells around Fort McMurray in the second half of the nineteenth century. (One enterprising German immigrant who claimed to have struck oil apparently poured the stuff down the hole himself.) Eventually, it became clear that there was no oil, and attention turned to mining the bitumen. In 1930, a former farmer named Robert Fitzsimmons set up the first commercial separation plant in the tar sands; in 1938, Fitzsimmons had to flee Canada to avoid his creditors.

In 1956, an American geologist, Manley Natland, came up with the idea of streamlining the process by using atom bombs. Natland reasoned that “thermal devices” could be lowered into the limestone beneath the tar sands and exploded. This would create cavities into which the bitumen, heated to more than a thousand degrees, would flow and from which it could then be collected. The idea was taken seriously at the highest levels in both Ottawa and Washington—the United States Atomic Energy Commission even agreed to supply a bomb to test Natland’s theory—but it was never implemented. (Beginning in the mid-nineteen-sixties, the Soviet Union actually tried the experiment, setting off half a dozen nuclear explosions to stimulate conventional oil production; production increased, but, unfortunately, much of the oil turned out to be radioactive.)

The technology for removing bitumen from the tar sands is probably still best described as a work in progress. Where the feed lies closest to the surface, as, for example, at the Suncor site, the bitumen is strip-mined and then separated. But most of the tar sands lie too deep to be mined profitably. In these zones, a method known as in-situ extraction is used. In-situ extraction is based on much the same principle as Natland’s scheme, minus the atom bombs. Typically, two horizontal wells are drilled into the sands, one above the other. High-pressure steam is injected into the top well; eventually, the tar sands grow hot enough—nearly four hundred degrees—that bitumen begins to flow into the bottom well. The technical name for this process is Steam Assisted Gravity Drainage, or SAGD (pronounced “sag-dee”).

Whichever method is used, a great deal of energy is required. To produce a barrel of synthetic crude through mining takes roughly eight hundred and ten megajoules, which is the energy content of about an eighth of a barrel of oil. To produce a barrel of synthetic crude through SAGD takes more than sixteen hundred megajoules, which is the energy content of more than a quarter of a barrel of oil. This means that, for every three barrels extracted via SAGD, one has, in effect, been consumed.

Tar-sands oil itself could, in principle, be used to power the operations; in fact, most of the energy used to generate the steam for SAGD, as well as to run all the upgraders and separators, now comes from natural gas. It is estimated that by 2012 tar-sands operations will consume two billion cubic feet of natural gas a day, or enough to heat all the homes in Canada. Such is the demand for natural gas around Fort McMurray that a consortium of companies, including Shell Canada and Imperial Oil, has proposed building a seven-hundred-and-fifty-mile pipeline from the Arctic Ocean through the largely undisturbed wilderness of the Mackenzie River Valley and down into northern Alberta. The proposal, which has been challenged by native and environmental groups, has yet to receive regulatory approval; meanwhile, a variety of other plans have been floated. As it happens, while I was visiting Fort McMurray a company called the Energy Alberta Corporation filed an application to build a pair of nuclear reactors four hundred miles west of town. Early reports stated that the company already had a “large industrial off-taker” lined up to buy nearly three-quarters of the twenty-two hundred megawatts that the reactors would generate. Energy Alberta would not disclose the identity of this “off-taker”; in the local press it seemed to be taken for granted that the power would be going to the tar sands.

The rest of the article is at this link: http://www.newyorker.com/reporting/2007/11/12/071112fa_fact_kolbert?currentPage=all

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