The development of the oil sands is something that will be beneficial to the world, however, we must continue innovating in order to reduce the environmental footprint of extraction. Conventional crude oil production is declining at a rate of approximately 5 percent a year. On the other hand, global oil demand is increasing every day. Huge markets such as China and India are consuming more energy than ever before and will be doubling their demand for oil in the next 25 years. Furthermore, conventional crude oil is very difficult to find at this stage and the cost of production has gone up in recent years.
All of this has made alternative sources of crude oil extraction, including the oil sands, much more attractive. We produce approximately 1.7 million barrels of oil per day (bopd) in the Canadian oil sands, and this could increase to between 4 million and 6 million bopd over the next 25 years. As it stands, unconventional sources of crude only accounts for approximately 5 percent of global consumption, but that figure should increase to 13 or 14 percent in 25 years.
SERIOUS MATTER: The challenges of climate change are serious and we need to take measures to reduce our carbon emissions. While renewable energy is an attractive option, the technology simply isn’t there yet for it to start to play more of a prominent role in the global energy matrix. Some renewable sources, such as biofuel, wind and solar, are technically proven. However, we need better technologies to reduce costs. Massive improvements in infrastructure will be needed in order for biofuels, wind or solar to become mainstream energy sources.
Furthermore, there are other important considerations that make renewable energy less attractive. For example, ethanol is the most common biofuel and it is derived from corn and sugarcane. By turning food products into energy sources, prices are driven up and the world’s poor can be affected. I am hopeful that technological advances will lead to the development of second-generation biofuel technology that will be derived from different sources, such as starch.
INNOVATION AHEAD: Everything that we have achieved in the oil sands in the past 40 years is down to technology. Steam-assisted gravity drainage (SAGD) extraction has unlocked billions of barrels of bitumen that we previously were unable to access. We are going to depend on innovations that will produce more bitumen from the oil sands, while reducing environmental imprint. First of all, 20 percent of proven reserves will be recovered using mining, while the remaining 80 percent will require in-situ methods. In-situ operations have a smaller environmental footprint on the earth’s surface. However, it creates more emissions as steam is used to heat bitumen in order to loosen the resource for extraction.
There are several technologies that are currently being developed that could present breakthroughs. Canadian oil company PetroBank is experimenting with a technology called Toe to Heel Air Injection (THAI) that will increase oil recovery from 35-40 percent to 70-80 percent, while at the same time reduce carbon emissions by trapping carbon in the ground and not using natural gas to generate steam. Siemens and other companies are looking to develop technologies that will use electric heating in wells. Beyond that, there are promising technologies that use solvents or combinations of solvents and steam.
Aside from innovations in oil sands extraction, there are also exciting technologies and projects planned in upgrading and refining. The Alberta government and industry are jointly investing $2 billion in three demonstration projects that focus on carbon capture and storage (CCS) technology: the Shell Canada Energy Quest Project, the North West Redwater Partnership and the Alberta Carbon Trunk Line CCS Project. Alberta has committed to reduce its greenhouse gas emissions by 200 million tonnes by 2050, and in order to achieve that it will rely on CCS to account for 139 million tonnes. Beyond reducing emissions, CCS can be used to enhance oil recovery by maintaining pressure in reservoirs.
OPEN DIALOGUE: We live in a free, democratic country steeped in the core values of safety, environmental protection, human rights and peace. Whenever anyone feels that one of these core values is being compromised they speak up, and that is as it should be. However, it is critical that everyone understands the facts. Opponents of the oil sands claim that greenhouse emissions involved are 300 percent compared to conventional production, while proponents maintain that there are only 5 to 17 percent more emissions involved. We must open our minds and have a dialogue based on reality.