Masri_subbed.qxp 24/10/08 11:25 Page 34
Alberta’s Oilsands
Figure 4: Comparison of Bitumen Production Projections
is facing growing opposition from various organisations and political
opponents in Canada and the US. Some of the opposition is based
5,000
on legitimate concerns pertaining to the long-term strategy for
4,500
managing the waste streams from mining operations. These are the
4,000
tailing ponds, which contain a mixture of sand, water, chemicals and
3,500
heavy metals associated with the separation process that takes place
3,000
at a mine site.
2,500
Mining operations are investigating ways to reduce the life and
2,000
quantity of tailings and reclaim the site at the end of its useful life.
T
housands of barrels per day
1,500
However, mining will ultimately account for only 20% of the total
1,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
recovery of bitumen from the oilsands. For this reason, it is
CERI 2007 Reference Case CERI Q2 2008 Projection innaccurate to generalize the impact from mining and to imply that
CAPP Canadian Crude Oil Production Forecast (Pipeline Planning Case)
CAPP Canadian Crude Oil Production Forecast (Moderate Growth Case)
the entire industry is ‘dirty’.
ERCB, ST-98 2008 Figure 2.9 NEB (All Projects) NEB (Base Case)
This leads to the debate about greenhouse gas emissions (GHGs)
• CERI 2007 Reference Case and CERI 2008 Q2 Projection – data are updated to January 2008 for the
Q2 projection. from the oilsands industry. Currently, the emissions are a fraction of
• Canadian Association of Petroleum Producers (CAPP) Moderate Growth and Pipeline Planning Cases
8
–
Canada’s total GHGs – less than 5% according to the Alberta
data are updated to early 2007, oilsands projections extend to 2020.
• National Energy Board (NEB) all projects and base case
9
– data are updated to late 2006, oilsands
government and CERI’s own estimates. Point source emissions
projections extend to 2015.
• Alberta Energy Resource Conservation Board (ERCB), Alberta Crude Bitumen Production projection –
represent those emissions that could be ‘cleaned’ to separate out
data are updated to late 2007.
carbon and sequester it underground.
production capacity. The delays and probabilities correspond to Of the point source emissions, as estimated by CERI, mining bitumen
the project’s position in the regulatory process. Projects further and upgrading it to SCO results in about 1.5 times the level of GHGs
along the regulatory and development process are given relatively from conventional oil in Canada. In situ projects are likely to produce
shorter delays and high probabilities of proceeding to their just over 2.0 times the level of GHGs that are produced from
announced production capacity on target. conventional oil in Canada. This differs from the often quoted three
times level that tends to be used by stakeholders opposed to
Accounting for potential constraints reduces the 2006 and 2007 CERI continued oilsands development.
oilsands projections by almost 1 million barrels per day. Figure 4
illustrates not only one of CERI 2007 oilsands constrained projections CERI has looked at how the oilsands could reduce the emissions to
(CERI 2007 Reference Case), but also provides a rough estimate of levels below those of conventional oil, thereby producing what we
our soon-to-be-released 2008 projection.
7
Other organisations have call ‘green bitumen’. While it is possible, it will not come without
made projections that are similar to CERI’s using different
assumptions and different project lists. Figure 4 therefore illustrates
the differences between a wide variety of oilsands projections.
Most estimates for the cost of
As indicated in Figure 4, most projections are for oilsands production
extracting bitumen from the oil
to achieve 3 million barrels per day by 2016. Between 70 and 85%
sands are based on a ‘supply
of the bitumen is destined for upgrading within Alberta, while the
remaining bitumen will likely be exported to the US for upgrading
cost’ approach.
and refining. Achieving this level of production and upgrading could
inject almost CA$170 billion into the Canadian economy in the form
of investment in capital expenditures. This does not include the some costs. Green bitumen can be produced by utilising nuclear
injection for new pipeline capacity and the value to the economy energy, carbon capture and storage or technological breakthroughs
from the production and the seconday effects from the investment. that could drastically reduce the inputs of natural gas required.
The Uncertainty with Moving Forward The oilsands will continue to be an important contributor to the
While the oilsands has the potential to become a more important Alberta and Canadian economies while providing a stable and
supplier of North American and potentially global crude, the industry reliable source of oil for North America. ■
1. Alberta, Canada, Alberta Energy Resource Conservation 5. Canadian Energy Research Institute, Canadian Oil Sands quarter of 2008.
Board, Statistical Series 2008–98: Alberta’s Reserves 2007 Supply Costs and Development Projects (2007–2027), 8. Canadian Association of Petroleum Engineers (CAPP),
and Supply Demand Outlook 2008–2017, 2008. Available Study No. 117, October 2007. Crude Oil Forecast, Markets, and Pipeline Expansions, June
at: www.eub.gov.ab.ca/bbs/products/STs/st98_current.pdf 6. Alberta Energy and Utilities Board, Alberta’s Reserves 2006 2007.
2. To convert barrels to cubic metres, divide by 6.29. and Supply/Demand Outlook 2007–2016, June 2007. 9. National Energy Board (NEB), Canada’s Energy Future –
3. Data are sourced from the Energy Resource Conservation 7. For the purpose of this article we have smoothed out Reference Case and Scenario’s to 2030. Available at:
Board (ERCB) and BP Statistical Review 2008. our 2008 projection and are presenting it using information www.neb-one.gc.ca/clf-nsi/rnrgynfmtn/nrgyrprt/nrgyftr/
4. Marilyn Radler, Worldwide reserves increase as production dated to early 2008. When CERI’s 2008 update is 2007/nrgyftr2007-eng.html#lot.
holds steady, Oil Gas J, 23 December 2002. released, it will reflect projects updated to the fourth
34
EXPLORATION & PRODUCTION – OIL & GAS REVIEW 2008 – VOLUME 6 ISSUE II
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