Home' Technology Review : November December 2011 Contents Feature Story 57
Alberta’s Energy Resource Conservation Board. That’s why, once
shipping and refining are taken into account, Alberta’s in situ pro-
duction process creates far more greenhouse-gas emissions than
making fuel from conventional crude.
Those figures are nothing but scandalous to John Nenniger,
the founder and CEO of N-Solv, a Calgary-based startup explor-
ing technologies for exploiting oil sands. Nenniger says that the
industry has improved little since the first SAGD field pilot in the
late 1980s: “That very first test had a steam-to-oil ratio of 2.38.
Since then the steam-oil ratios have actually deteriorated. There’s
been no progress at all.”
It’s not as if no one is trying. Large oil companies, including Shell,
Suncor Energy, and Exxon subsidiary Imperial Oil, as well as entre-
preneurial startups such as N-Solv and Laricina, are field-testing a
growing number of in situ techniques. Some are pumping air deep
underground and igniting some bitumen in hopes of melting the
rest more efficiently. Others see potential in using electricity to
heat deeply buried bitumen.
Cenovus is testing a method that uses a combination of steam
and a solvent, butane, to help loosen up the bitumen. Pad A02
looks like any other at Christina Lake, except that it has just one
pair of wells supported by some extra hardware: three 50-foot-long
storage tanks for the butane and equipment to blend it with the
250 °C steam that roars in by pipe from the steam generators. Add-
ing that equipment boosts the cost of building a new site by almost
a third, but it’s worth it, says Harbir Chhina, Cenovus’s executive
vice president for oil sands. Chhina says adding butane delivers 10
to 15 percent more bitumen from the same resource and does so
roughly 30 percent faster.
The effects of that improvement on energy use, profits, and
greenhouse-gas pollution are to get a first commercial-scale test at
Narrows Lake, an in situ project immediately northwest of Chris-
tina Lake where Cenovus hopes to be producing 130,000 barrels of
bitumen per day by 2016. (Approval for Narrows Lake is expected
by next summer; Alberta has never rejected an oil-sands applica-
tion.) Chhina’s prediction: Narrows Lake’s steam-to-oil ratio will be
around 1.7, 15 percent lower than it would be without the solvent.
He says the technology could decrease greenhouse-gas emissions
by as much as 30 percent at most SAGD sites.
Meanwhile, Nenniger is gearing up for tests of a solvent-only
process that was invented in the 1970s by his father, who was
vice president for process engineering at Hatch, Canada’s second-
largest engineering firm and N-Solv’s majority shareholder. From
a makeshift work space in Hatch’s Calgary offices, Nenniger plots
the technology’s comeback: a $60 million pilot test is under way
at Suncor Energy’s Dover site northwest of Fort McMurray, the
same place where the SAGD process was originally tested.
Nenniger estimates that eliminating the use of steam and low-
ering temperatures will save $9 on each barrel of bitumen. What’s
more, the solvent process can extract the best-quality bitumen,
leaving more of the heaviest asphalt-like materials in the ground.
That should make N-Solv’s bitumen easier to refine, fetching pro-
ducers an extra $15 for every barrel they ship. Nenniger also pro-
jects that the process will use 80 to 90 percent less energy per barrel
of bitumen than SAGD, reducing carbon emissions accordingly.
N-Solv plans to drill observational wells at its pilot facility this
winter, and injection and production wells should follow in the
summer. Warm solvent could begin flowing as early as the fall
of 2012, delivering production results by the following summer.
Nenniger projects commercial-scale application in as little as five
years. “Proving we’re better than SAGD on a head-to-head basis
will open up the entire oil-sands market,” he says.
The question for oil-sands innovators is whether the financial
risk of developing new types of in situ technologies will pay off.
Nov11 Feature Oil Sands.indd 57
10/12/11 6:18 PM
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