Alberta Oil - One Glob for the Price of Two Globs

Has anyone noticed the elegantly profitable symmetry that is unfolding in the Alberta oil patch?

A phalanx of oil companies, all of whom swear that they do not have time nor resources to put up a few windmills or do any other reasonable thing, are lining up to get their dibs in on the Athabasca Oil Sands.

Why is this, I wondered to myself.

Of course, the answer came quite easily.

Because these oil sands are a profitable operation.

But, they are really more profitable, even, than meets the eye. That's because there is a special magic in the air in Alberta that actually doubles the sales... and who knows what's going on with the profits? The oil companies are raking it in as it is, of course. Posting gargantuan profits with minimal worries about what the economy is doing. Cheating the public outright at the retail level at every turn. It is mind boggling what they get away with.

The coffee card effect

But the real sleight-of-hand goes on in the oil sands. Remember, this is the operation where it takes something like 4 times the energy to produce a barrel of oil as it does in conventional oil production. For starters, it takes 1200 cu. ft. of natural gas to produce one barrel of oil in the extraction process of conventional tar sands production. Since a barrel of oil is equal to about 6,000 cu. ft. of natural gas, it's just about like a Tim Horton's coffee card - extract 4 barrels of oil - you get to sell another barrel! Then there is all the other fuel used in the operation. Running all those dump trucks on steroids, shuttling the workers, etc., would all be additional energy burnt and additional Co2 and other emissions in the air and water. Even today, with oil production at possibly 15-20% of the anticipated future levels, the tar sands are consuming 40% of Alberta's natural gas production.

At that point we can consider the barrel of oil delivered, for the purpose of this discussion, but the consumption of fossil fuels associated with that barrel has only just begun. That's because Alberta has the intent of using carbon capture and storage (CCS) to reduce or neutralize the impact of the fuel burnt in the extraction process. In a nutshell, each time the Co2 emissions from one unit of fossil fuel is sequestered in CCS, the equivalent of another 50-75% of a unit of fuel is burnt. As explained in more detail here, this includes 20-30% in the capture, another 20-30% in liquefaction and a long list of other costs, including transportation of the liquid to the storage site, facilities construction, etc.

The net effect is a clusterbomb of fossil fuel consumption. To be sure, there may be few, if any, cases where the oil company running a project is one and the same as the company supplying the natural gas. But it is clear that all of these companies, together with their smaller suppliers and the Province of Alberta, form a common community that, as a whole, stands to realize exceptional benefits from the multiple combustion engine that is the Athabasca Tar Sands.

CCS - Carbon Capture and Storage - Solution? Stopgap? or a Gimmick to Drive Oil Sales?

One of the least popular alternatives, in environmentalist circles, for reducing GHG in the atmosphere, is the whole concept of carbon capture and storage.

This is the process where Co2 emissions are captured at some point in a combustion cycle and, by one of a variety of means, are trapped and sequestered so they do not enter the atmosphere.

This is seen by many as, at worst, nothing but a trick dreamed up by the oil companies to facilitate even greater profits while postponing the inevitable, that is, the day we wean ourselves from carbon fuels altogether. Others view CCS as a stopgap type of measure, which could be quick to implement and relatively useful until such time as alternative energy production is brought up to speed. And, there are others who see this option as the holy grail of making our energy needs compatible with the healthy future of the planet. Which is it? I dunno but let's take a look.

There are many different variations of CCS. Probably the most common is where Co2 is captured in a coal burning or other combustion process and then pressurized, liquefied and injected into the earth. The most common injection sites used so far are old oil fields, where the liquid Co2 is effective for recovering additional oil that otherwise wouldn't have been possible to get out of the old wells.

Then there are many variations of this process ranging from different ways of preparing the underground site to ocean floor scenarios, etc.

The other most promising technique, rather than liquifying the Co2, is to use a process called carbon mineralization, where the Co2 is used to form carbonate solid material, such as limestone or other rock.

CCS is well established on a small scale. One of the largest facilities in the world is the Petroleum Technology Research Center in Weyburn, Saskatchewan. Once full, this facility will contain the equivalent of the Co2 produced by 6 million cars in one year.

The government of Alberta has budgeted $2 billion for CCS and several projects have already started.

The problems with CCS at a glance are as follows:

* high cost of capturing the Co2 (approx 20-25% of energy produced)
* high cost of liquefaction
* cost of transport
* potential of leakage
* the solution is not permanent
* sequestration sites are finite

CCS drives petroleum consumption

So, the total cost in energy and dollars of the CCS process would be something like 50% of the energy produced in the original process.

Add to this consideration the fact that oil from the tar sands already implies a huge energy component in initial production.

Well, the good thing about all this for the oil companies is that the additional energy they use can be seen as additional sales for their industry, which also have the effect of supporting petroleum prices and so forth.

The other problem is that this method only deals with the Co2. Many other serious pollutants are still dispersed into the atmosphere.

This problem is also present with the carbon mineralization technique. However, there are some advantages. First of all, the by-products of carbon mineralization, whether they be limestone or a similar carbonate, are all inert, non-toxic, solid materials that can be buried, piled or used for pretty much anything. Secondly, this technique is permanent - and, for the sake of discussion, sustainable.

In the case of carbon mineralization, you still have to capture the Co2, so you still have that cost. Most of the other costs are as yet undetermined.

Company claims to produce fuel from Co2

The down side of this technology is that tried and proven methods of rapid carbon mineralization are still in the research stage. Much of the information out there is locked down in academic portals that you have to subscribe to or pay as you go. In short, C-M could have potential, but working models are still few and far between.

There are many other techniques out there.

There has been a proposal floated for such a thing as zero-emission coal, a complex process that seems to lead to either CCS or carbon mineralization in the end anyway.

Beyond that, there is even a company in California, Carbon Sciences Inc., that is claiming to be able to produce fuel from Co2, effectively recycling the emissions.