Production of Alberta's oil sands exceeded one million barrels of oil a day in 2004 and was expected to more than double that early in the century's second decade, with new and expanded facilities that were actively underway. By then, oil sands production was expected to total about 800,000 barrels a day of steam-driven in situ production and about 1.8 million barrels a day from mining operations, not including planned projects that had not actually got underway by 2004.
But big challenges still confronted the growth of oil sands production, including emission of greenhouse gases, massive requirements for water and fuel, and environmentally safe disposal of billions of tons of mined sand, plus tailings from the hot water separation plants. Fortunately, tens of millions of dollars were also being spent in research and development of new in situ methods which, if successful, could go a long way to resolving these challenges.
The size of the challenges can be quickly sketched.
- Fuel. Oil sands are fuel hogs. Generating steam to recover one barrel of raw bitumen in the SAGD production process requires about 1,000 cubic feet of natural gas. Upgrading bitumen to synthetic crude oil requires about another 750 cubic feet of gas.38 That doesn't include the fuel used by the giant scoop shovels and the sand-and-bitumen separation process in mining operations. These figures suggest that projected oil sands production of 2.6 million barrels a day by 2015 would burn up gas at a rate of almost three billion cubic feet a day, about one-fifth of Canada's total gas production. Gas consumption could be reduced by using the bitumen itself or upgraded bitumen products for fuel. Either way, it's a lot of fuel.
- Greenhouse gases. Upgrading raw bitumen into synthetic crude oil a blend of naphtha, kerosene, and gas oil (similar to diesel fuel)-involves the removal of carbon, the addition of hydrogen (derived from natural gas), and removal of impurities. The process results in the emission of substantial greenhouse gases, primarily carbon dioxide and small amounts of methane. Burning natural gas to produce steam for in situ production also results in the emission of carbon dioxide. In 1990, each barrel of oil sands production resulted in emissions amounting to the equivalent of more than 220 pounds of carbon dioxide.39 Processing improvements have cut this in half, but total emissions have still increased with the rapidly growing volume of oil sands production. Emissions of nitrogen oxides and sulphur dioxide from oil sands production also impose environmental challenges.