University of Calgary analysis tar sand oil extraction show it is sometimes not even a net producer of energy
According to a new scientific analysis, many tar sands wells are actually using more energy than they produce. If it requires a barrel of oil – or its equivalent in gas – to retrieve a barrel of oil, then what’s the point? It appears this is only possible at present in Canada as the price of oil is lower than the price of oil, so it is commercially viable to burn the cheaper gas in order to get out the more expensive oil. It may make some (warped) financial sense, but it makes no energy or environmental sense. But if the price of gas rises, in relation to the price of the oil, these tar sand wells will go bust. The economics of oil extraction use the term EROEI (Energy Return on Energy Investment) – ideally with EROEI as high as possible (eg. the light, sweet crude found near the surface in Iraq). Other assessments have found the EROEI for tar sands may be 7:1 for extraction and 3:1 after it has been upgraded and refined into a useful fuel. Squeezing oil out of tar sand is an extremely wasteful process, requiring between 2 – 4 tons of tar sand and 2 – 4 barrels of water to produce one barrel of oil. The richest deposits are being exploited first, but already produce a low return – which will become worse once the “lowest hanging fruit” has been removed.
The Tar Sands Smoking Gun
The Canadians have argued that the carbon intensity of tar sands production is similar to other crudes and therefore should not be “discriminated against”.
For years, the Canadians have also been lobbying the Obama administration to approve the highly controversial Keystone XL pipeline.
On both sides of the Atlantic, a central part of their lobbying campaign has been the claim that the exploitation of the tar sands is both economically and ecologically sustainable.
But the tar sands industry has a dirty little secret that has overwhelming political and economic consequences for the development of the tar sands.
According to a new scientific analysis, many tar sands wells are actually using more energy than they produce.
From an economic and environmental perspective, this is total madness.
In fact, according to the paper, the only reason that these wells are in any way economical is due to the prevailing low natural gas price in North America.
If and when the price of natural gas increases, these wells will go bust.
So what is going on?
Some of the most iconic and disturbing images associated with the tar sands are huge open pit mines, with vast dumper trucks, but this production method is increasingly being outdated as producers move to develop deeper bitumen deposits.
These deeper deposits account for 80 percent of total proven tar sands reserves and are expected to account for 80 percent of total tar sands production, up from about 50 percent today.
They are extracted in a process called Steam-Assisted Gravity Drainage, or SAGD for short, which has now become the extraction method of “choice”.
SAGD uses two wells: one to inject steam to heat and reduce the viscosity of the tar sands, and one to collect the oil.
So a study carried out at the University of Calgary, published in the journal, Fuel, has examined the energy and emissions intensity of operating SAGD projects, and argues that “SAGD requires large amounts of energy and emits significant volumes of greenhouse gases”.
The scientists conclude that the thermal efficiency of SAGD projects varies immensely due to the huge differences in geology and differing properties of fluids used in the extraction process.
“Actual oil sands reservoirs are completely different from the homogeneous sandstones with uniform fluids envisaged by the reservoir engineers that developed the early SAGD process,” the scientific paper warns.
Field data suggests that these wells are operating with a thermal efficiency of less than 40 per cent, with some wells even less efficient.
The scientists conclude that:
“many operations exceed this value and thus are not net energy generation processes yet may be ‘‘economic’’! With disconnected price markets for natural gas and bitumen, it is possible for bitumen recovery under these conditions to be economically viable today even though it makes no sense to pursue such an energy inefficient process“. (Our emphasis added)
So many wells are using more energy than they produce. However because tar sands companies burn cheaper natural gas to produce more expensive oil, the low gas price is hiding how inefficient the wells are.
This led the industry’s top trade journal, the Oil Sands Review, to suggest that:
“From the standpoint of many of Alberta’s thermal bitumen producers, a recent study on the efficiency of SAGD could be titled “Thank God for low natural gas prices.”” (our emphasis added, article behind pay wall).
It goes without saying, the U of C scientists warn, that “in all cases, carbon dioxide intensity is high”.
It also goes without saying that this research is the smoking gun that shows that the tar sands are not economically or environmentally sustainable at all.
Given that SAGD is the future of tar sands production, and that the standard progression of oil exploration is to exploit the richest deposits first, the study should be cause for a reexamination of the data on the carbon intensity of tar sands production.
The industry, the Canadian government, and the U.S. Department of State, which is analyzing the climate impact of the Keystone XL pipeline, all use data from a handful of SAGD and mining projects to extrapolate a figure for tar sands carbon intensity.
It is clear from this study that if a full survey were conducted, the true climate impact of tar sands production would be much higher than current figures suggest.
As the U of C scientists conclude:
“The results demonstrate that on an energy and carbon dioxide emissions basis, bitumen or bitumen-based energy recovery processes need to step well beyond the capabilities of current steam-based bitumen recovery processes, such as SAGD, if practical and sustainable energy balance and emissions scenarios are to be achieved from the in situ oil sands operations.”
Given that there are dozens of SAGD projects under construction and proposed, it is clear that the tar sands industry is out of control and needs to be stopped in its tracks.
The first step is to stop the Keystone XL pipeline.
University of Calgary analysis of energy balances and emissions of SAGD oil sands production finds need for improved processes; some operations not thermally efficient or net generators of energy
19 October 2013
Although optimized SAGD can yield “reasonably high” recovery factors, they found, the economic and environmental costs can be large given the amount of steam required. The data suggests that at the extreme, some operations are actually not net energy generating—i.e., the energy injected via steam exceeds the recovered chemical energy in the retrieved bitumen. The results suggest that in situ bitumen recovery processes need to advance well beyond current capabilities “if practical and sustainable energy balance and emissions scenarios are to be achieved,” they said.
One of the key challenges in producing bitumen and heavy oil is their high, variable viscosity. Heavy oil (between 10° and 20° API) has a dead oil viscosity ranging up to the thousands or tens of thousands of cP. Bitumen (<10° API) has viscosities ranging from the tens of thousands to more than 10 million cP at reservoir conditions.
Low energy return on investment (EROI) need not limit oil sands extraction
June 10, 2013
[EROI is Energy Return on Energy Invested]
Low energetic returns (e.g., EROI, NER) from oil sands extraction and upgrading have been noted as a potential limit to the development of the oil sands as a substitute for depleting conventional oil resources (e.g., Herweyer and Gupta, 2008). In this article we will examine this claim from a variety of perspectives. Specifically, we will examine the following questions:
- Are the energetic returns from oil sands extraction lower than conventional oil?
- How have the energy returns from oil sands extraction varied over time?
- What energy sources are used in oil sands extraction, and what are the implications of this sourcing for net energy availability from the oil sands?
- Will low energy returns limit the net output of energy from the oil sands industry?
This article is based on the peer-reviewed journal article: Brandt A.R., J. Englander and S. Bharadwaj (2013). The energy efficiency of oil sands extraction: Energy return ratios from 1970 to 2010. Energy.
…. there is a long article ……. which contains this couple of paragrphs:
“5. Will low energy returns limit the output of net energy from the oil sands?
These data suggest that oil sands processes exist that have reasonably high energetic returns relative to external energy provided by other energy sectors. That is, relative to the amount of energy that they consumed from the rest of society (e.g., natural gas, imported diesel, and electricity), these processes produce a significant amount of net energy output. This is partly a result of historical development and geographic considerations: the oil sands mining operations developed in a remote and poorly-integrated part of Alberta, and therefore were designed to be largely energy self-sufficient. Importantly, these conclusions are not just limited to mining operations. In situ operations such as the Nexen Long Lake project produce steam using upgrader by-products (asphaltene residues).
“Our results suggest that it is not realistic to expect oil sands extraction to be limited by their calls on natural gas and other resources. If natural gas becomes expensive, processes can be adopted to use byproducts of the processing of bitumen to fuel extraction (e.g., integrated operations). However, these integrated processes have implications for the amount of oil sands resource available (e.g., not all barrels able to be produced will be available as “net” barrels of output) and can have important climate implications (e.g., using coke for fueling bitumen separation or steam production is more GHG intensive than using natural gas). ”
Tar Sands Too Inefficient & Energy Intensive, Not Worth Cost
Perhaps you’ve heard of the Keystone XL pipeline. It’s been in the news a lot lately. The pipeline was intended to carry tar sands oil across the Canadian border to the U.S.There was a big hullabaloo in Congress over the pipeline, which was finally voted down by the Senate this week. Notably, 45 Republicans voted in favor, while the other two abstained.
The obvious question is, what is the value of tar sands?
The story currently being promoted by some suggests that Canadian tar sands (also known as oil sands) are the solution to America’s energy needs and a way to relieve us of our reliance on Middle Eastern oil.
Somehow, this story ignores the fact that tar sands are still a form of imported oil, and that most of America’s imported oil already comes from Canada and Mexico, not the Middle East.
But that’s not the heart of the matter.
Here’s the key question: What is the net energy returned after utilizing oil or natural gas to obtain more oil? In the oil business, this is referred to as Energy Return On Energy Investment (EROEI).
EROEI is defined in the following way: Energy Produced / Energy Used = EROEI
For example, if oil is selling for $100 per barrel and it costs $10 in energy to produce a barrel, the EROEI is 10. Traditional oil development is currently estimated to have an EROEI of about 15.Obviously, the higher the number (i.e., the higher the EROEI), the better.
If it requires a barrel of oil to retrieve a barrel of oil, then what’s the point? Energy producers have to take into account the market price of oil or natural gas, versus how much it will cost to extract and refine them.
The light, sweet crude is the good stuff that sits at the top, where it’s relatively easy to extract. The lower quality oil — like tar sands — just happens to be the most expensive oil because it is the most difficult to extract.
With tar sands, the cost to produce a unit of energy is much higher than with traditional oil. Simply put, tar sands do not come cheaply.
Just how energy-intensive are tar sands? Professor Kjell Aleklett of Uppsala University in Sweden, a recognized expert on tar sands, puts it this way: “The supply of natural gas in North America is not adequate to support a future Canadian oil sands industry with today’s dependence on natural gas.”
The problems begin right at the start of the operation. Tar sands are typically mined, which means a large amount of energy is required just to get the process started.
Tar sands are a mixture of roughly 90 percent sand, clay and water, plus 10 percent bitumen, a thick hydrocarbon liquid. After extracting that 10 percent of bitumen from the tar sand mixture, the bitumen can be purified and refined into synthetic crude oil.
Bitumen is one of the world’s most expensive and heaviest hydrocarbons. And it is very energy intensive. In fact, bitumen production requires so much natural gas for processing and enrichment that it now accounts for one-fifth of Canada’s natural gas demand.
That’s the problem Professor Aleklett was referring to above.
Since bitumen is a highly viscous “heavy” oil that doesn’t flow as easily as lighter crude, it requires more processing to facilitate its flow through oil pipelines.
In fact, bitumen is so heavy and viscous that it will not flow unless it is heated or diluted with lighter hydrocarbons, such as natural gas. Typically, tar sands are produced using natural gas to heat the steam that drives the oil out of the sands. And it takes a lot of gas to do this.
Finally, bitumen has to be upgraded so that it can be refined. This can be done by adding methane or hydrogen — from even more natural gas — to the bitumen to create lighter oil.
Even if electricity is used to extract the tar sands and natural gas, this ultimately comes from a coal-fired power plant. It doesn’t change the equation; you’re still exchanging one form of energy for another.
Perhaps you now get a sense of just how inefficient tar sands really are. In fact, tar sands are so inefficient that just 75% of the bitumen can be recovered from sand.
At the turn of the 20th Century, it took just one barrel of oil to find and liquidate 100 barrels. That amounted to an extraordinary Energy Return on Energy Investment.
However, according to Peter Tertzakian, the chief energy economist at ARC Financial Corporation, the EROEI for tar sands amounts to 7:1 for extraction and drops to 3:1 after it has been upgraded and refined into something useful, such as gasoline.
The process of making liquid fuels from oil sands requires abundant energy from beginning to end, extraction to refining. The entire process generates two to four times the amount of greenhouse gases per barrel of final product as the production of conventional oil.
Ultimately, squeezing oil out of tar sand is an extremely wasteful process, requiring between two and four tons of tar sand and two to four barrels of water to produce a single barrel of oil. The current level of water consumption is enough to sustain a city of two million people every year, according to an analysis by Energy & Capital. And after the water has gone through the entire process, it is so toxic with contaminants that it cannot be released into the environment.
When you look at the big picture, tar sands clearly aren’t the answer to our energy needs. They’re not even part of the answer. They are too energy intensive, release far too much carbon into the atmosphere and are far too dirty, polluting precious water supplies.
Until some renewable, synthetic fuel is developed that can reduce our reliance on fossil fuels, conservation will be our best bet. Oil prices are in a long term upward trend, and tar sands present more problems than solutions.
Greenpeace website at http://www.greenpeace.org.uk/files/tarsands/tar-sands.html
Disaster for the Albertan wilderness and people
The tar sands are already the biggest industrial development anywhere on Earth, and also the biggest opencast mining operation.
The tar sands deposits of heavy oil mixed with clay and sand lie below the surface of the Canadian wilderness. To extract the tar, oil companies clearcut the Canadian boreal forest, gouge out hundreds of metres of topsoil, and turn the landscape into a gaping black pit. Two tonnes of earth has to be dug up and processed to produce each barrel of bitumen. The tar sands are producing 1.35 million barrels a day.
The huge lakes of toxic sludge that fill with the toxic water used in the operation are poisoning the Albertan landscape and water supplies. The impact falls heavily on the First Nations indigenous people of the area. George Poitras, a member of Mikisew Cree indigenous First Nation, says: “My people are dying, and we believe British companies are responsible … UK oil companies like BP … are extracting the dirtiest form of oil from our traditional lands, and we fear it is killing us.”
If the bitumen is too deep to be mined, the oil companies inject high-pressure steam into the ground, to blast the oil out of the sand and up to the surface. This is called ‘in-situ’ extraction, and as oil companies begin to go after the tar sands deposits that are deep underground, it’s lined up to be the extraction method of the future.
In-situ extraction doesn’t create the same enormous opencast pits, but to install the gas piping, roads and rigs it requires still means cutting a swathe through the Canadian boreal forest, destroying the habitat of many plants and animals, and driving many local wildlife species to extinction.
Disaster for the planet
It’s very carbon-intensive to produce oil from the tar sands. The site that BP is planning to invest in will produce about three times the emissions per barrel of oil than you would get from normal crude. The steam used in the extraction is produced by burning huge amounts of natural gas – in energy terms, it’s up to seven times less efficient to get oil from the tar sands than it is from normal crude.
On any rational assessment of what’s happening to the climate, there’s no way tar sands make any sense. This is the most polluting source of oil in existence.
Nobel laureates demand European Commission action to classify oil from tar sands as very high carbon
German research institute pulls out of Canadian tar sands project
“A 2011 report commissioned by the EU from Adam Brandt, an Assistant Professor at Stanford University, found that the lifecycle emissions of fuel from tar sands – also known as oil sands – were between 12-40% higher than conventional crude, with the most likely barrel being 22% more carbon intensive.
“Brandt wrote that tar sands were “significantly different enough from conventional oil emissions that regulatory frameworks should address this discrepancy with pathway-specific emissions factors that distinguish between oil sands and conventional oil processes.” ”