(242d) Future Oil Sands Production Costs and GHG Emissions Based on Emerging Technologies

1.7 trillion barrels of oil are hosted in Western Canada with about 167.9 billion barrels considered recoverable using existing technologies (AER, 2012). This makes oil sands in Alberta, Canada the world’s third-largest oil reserves after those of Venezuela and Saudi Arabia (Alberta Energy). However, extraction of these resources requires unconventional methods that lead to high production costs and environmental impact. Competitiveness challenges in a low oil price environment, evolving climate change policies and pressures to reduce environmental footprints prove that the high costs and GHG emissions conventional methods of bitumen extraction and processing are no longer permissible in the long run.

Therefore, it has been acknowledged by many stakeholders that the oil sands industry must innovate to be competitive. On the other hand, if the "business as usual" is continued in the current environment of growing momentum of environmental concerns, alternative fuel developments, and increasing market access limitations, the industry may experience limited growth with investment communities migrating away from oil sands toward other fuel enterprises (Nduagu and Gates, 2015).

There has been increasing effort towards the development of new technologies that address the costs and GHG emissions challenges. Some of these efforts have progressed from ideas or concepts to field and commercial demonstration stages of research and development (R&D). Some attempts have been made to catalog, and in some cases, assess the technologies being developed for bitumen extraction and processing (Council of Canadian Academies, 2015, Findlay, 2016). However, to our knowledge, the potential cost and emissions reduction potentials of these technologies have not been assessed or quantified in a comprehensive and systematic manner. This gap increases the uncertainty of estimating future production costs and GHG emissions associated with bitumen extraction and processing.

Thus, this study fills that gap by estimating future oil sands bitumen production costs and GHG emissions by determining the potential impacts of new and emerging technologies and processes to reduce costs and emissions. We identify new and emerging technology options that can be deployed in the oil sands industrial sector in the short-term, focusing on in situ process-based projects, spanning bitumen production, processing and upgrading. Then the resulting impacts of adopting these technologies in oil sands in situ operations and processes are assessed.

Results show that near-commercially ready technologies, deployable across bitumen extraction and processing chain in 5-7 years, can achieve dramatic reductions in costs and emissions simultaneously. By combining technologies in different in situ oil sands segments, bitumen production costs and emissions can be reduced by 34-40 percent and 80 percent, respectively.

References

AER, 2012. ST98: Alberta’s energy reserves & supply/demand outlook. Available online at https://www.aer.ca/data-and-publications/statistical-reports/st98

Alberta Energy, Facts and Statistics. Available at http://www.energy.alberta.ca/OilSands/791.asp

Council of Canadian Academies, 2015. Technological prospects for reducing the environmental footprints of Canadian oil sands. The expert panel on the potential for new and emerging technologies to reduce the environmental impacts of oil sands development. The Council of Canadian Academies, Ottawa, ON, Canada.

Findlay, P.J., 2016. The Future of the Canadian Oil Sands: Growth potential of a unique resource amidst regulation, egress, cost, and price uncertainty. Report No. WPM 64. Oxford Institute for Energy Studies, Oxford, UK.

Nduagu, EI, Gates ID, 2015. Unconventional Heavy Oil Growth and Global Greenhouse Gas Emissions. Environ. Sci. Technol. 2015, 49, 8824−8832