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From Fossil To Fuel™
From Fossil To Fuel™

Episode 24 · 2 years ago

Episode 23 - Oilsands

ABOUT THIS EPISODE

A high level overview of the two most common types of oilsands operations: mining and SAGD (Steam Assisted Gravity Drainage)

My name is Brendan McDougall and I'm a professional engineer. Or the last decade I've worked in many different facets of the oil and gas industry. While I have a pretty solid technical background in oil to gas, I don't really know a whole lot about the other non technical departments that help run an oiling gas company. Recently I took a course to help develop my business acumen and better understand how the financial side of the business works. What a novel concept to educate the technical people on the business and financial side. I thought it would be a really cool idea to return the favor and educate the non technical people on the technical side. This is how the concept from fossil to fuel was born. Through these twenty four episodes, we will take a journey from how oil and gas was formed millions of years ago to how it is refined into the fuel that runs our cars and heats our homes. Come join me on this adventure as we learn how the oil and gas industry operates, from fossil to feel. The oil sands, also known as the Tar Sands, are technically known as Bitchmin is bands, and I know that doesn't exactly roll off the tongue. It's a Bitchumen, which is the hydracarbon that sought after in the oil sands, is a very heavy and viscous hydrocarbon that kind of has the consistency of peanut butter or cold molasses. The topic of the oil sands is polarizing in the media, which is why we're talking about it here, due to the perceived impact that they have on the environment, and I guess I should be careful here when I say perceived impact. I'm not saying that...

...they don't have an impact on the environment. They certainly do. The conversation of the debate is really around the perceived magnitude of the impact that they have on the environment. However, they are a lucrative asset for oil companies and that's due to the massive size of the bitchman deposits. Because of that, meaning, because of the massive size of the deposits, they have a long life and they also have a low cost of exploration because, generally speaking, their shallow deposits. The estimated worldwide deposits of Bitchumen are over two trillion barrels, with most of those found in Canada, Venezuela, Russia and Kazakhstan. Of these two trillion barrels there are about a hundred billion barrels of proven reserves. Proven reserves, and over seventy percent of those hundred billion barrels of proven reserves are located in northern Alberta, Canada. So how did they form? Well, millions of years ago, tectonic plate movement below the Earth's surface cause some oil posets to rise and others to get pushed deeper into the earth. Oil Sands are what's left of the oil deposits that rose up and where there was massive microbial biodegradation that converted light oil into Bitchumen. You probably have no idea what the heck I just said, so let me explain that. So what that means is that there was a whole bunch of bacteria living near the surface of the earth, where it's not too hot and they can survive. So as this light oil rose up, the bacteria started eating it and as massive amounts of bacteria started consuming off all of the light oil, the byproduct of their massive feast was this super extra heavy oil, which is what we called bitchuman. So, for Comparisons Sake, the lightest hydrocarbon molecule is methane, which only has one carbon atom. Bitchamin molecules generally have at least thirty...

...five carbon atoms and potentially up to hundreds more. So all of these extra carbon atoms is what makes them these big long hydrocarbon molecule chains, and that's what makes them heavy and thick and gives them that kind of knit butter consistency. So, since Bitchaman has the consistency of peanut butter or cold molasses, it can't be produced through traditional means of extraction. Bo Well, I mean you can picture in your head if you've got a cup full of water and you're sucking it through a straw, no problem. But all of us, or most of us, have at least experienced that feeling when you've got a milkshake that's too thick and you just simply can't suck it up through the straw because it's too thick. Well, that's what's happening with Bitchaman. It's just too thick. We can't produce it through traditional means. So the most common methods of recovery or production are through surface mining, so to think of like shovels and buckets, kind of mining and other thermal methods. The most common one is known as say D or steam assisted gravity drainage. So the bitchaman deposits I mentioned before our shallow deposits, and so generally they range from less than sixty five meters deep to maybe a couple hundred meters deep. So this entire range of depths is considered quite shallow. Remember that conventional wells that we've been talking about to date are usually several thousand meters deep. So the shallowest deposits, so say less than seventy five meters, are close enough to surface that they can be mined, like I said, with the shovels and buckets approach. Will talk about that in a bed. But beyond seventy five meters it's not really economic to mind them because there's just too much dirt on top of it that you have to move. That's where we would use thermal methods...

...like Sagd. So when most people think of oil sands, at least perhaps in the Western Hemisphere, they think of the mining operations in Alberta, Canada. CNN and National Geographic have become famous with this because they've got a vast array of picture and videos that resemble an apocalyptic post nuclear war. So just Google it. Google Oil Sands Canada and you'll chances are you'll see some pretty eye opening pictures. These pictures and videos certainly helped make the jobs of environmental lobbyists a lot easier. But I will say the oil sands and Albert are vast and cover roughly a hundred and fortyzero square kilometers, which, to put it in perspective, is larger than the entire country of Greece and twice the size of Ireland. It's massive. Now, the actual mining operations do not cover such a vast area and to put that in perspective, the mining operations only cover somewhere around nine hundred square kilometers, which is point six percent of the total. It's still a widespread area and to put put that in perspective, that nine hundred square kilometers is probably somewhere between the size of Rome and Bert Limb. So you're talking an operational area that's the size of a big city, but the whole oil sands itself is the size of a country. I mentioned Sagd as the most common thermal method to recover bitchuman. So remember Sagdy is steam assisted gravity drainage and to the casual observer, if you were looking at the surface location or surface operations for Sag d, it would look like any other oil and gas, conventional oil and gas operation. There's no deep pits, no giant trucks and shovels, no apocalyptic landscape, and that's...

...because Sag d and other thermal operations take place below the surface, just like other conventional oil and gas wells. These type of operations, Sag d use steam to heat up the bitchuman and more or less melted. That's the steam assisted part. Gravity drainage means that once the BITCHUMAN is heated up in a it's more fluid and it's actually able to drain into the well and then flow to surface. The steam assists the bitchman to drain into the well via gravity and thus you have steam assisted gravity drainage. So, just to give a little bit more detail on how it works, when you're drilling and completing a conventional oil and gas well, you're just drilling one hole. For Steam assisted gravity drainage, were actually drilling to that parallel each other, and so you have these two wells, one on top of the other. Usually they're about five meters, or say fifteen to twenty feet apart, or on stacked on top of each other, and one is used to inject steam. So you inject steam into the reservoir and it'll actually because, especially because it's hot and because water or the steam is going to come up. The steam, as it's rising, is going to heat the Bitchuman, and so you basically create this almost like a bubble, I guess, as the steam is rising up and heating the bitchuman and as the bitchuman heats up and becomes more fluid or mobile, more mobile, it'll actually fall down because of gravity, and so that's what the second hole or well is force for producing the Bitchaman. So...

...just to recap that, you have one well that is used for injecting steam and another one that's maybe fifteen or twenty feet apart for it, that produces the bitchumen as it drains down. These types of thermal recovery for Bitchumen obviously need a constant source of heat or at least some sort of cyclic steam injection to keep the bitchumen in this liquid form, because if you take the heat source away, it's just going to cool, cool off and become that thick sort of peanut butter. Consistency again. So you have to keep a constant source of heat. So there's a significant amount of engineering that goes into deciding the best method of injecting steam or heat into the reservoir, and also many different opinions on how to best do this and what source of energy to use in the future. Generally speaking, its natural gas that we use to make the steam. So I mentioned before Bitchmen, deposits are not located well, generally not located on the surface of the earth, meaning that there's going to be a layer of dirt. So the mining operation begins by first stripping away all of this dirt or soil. We call this overburden. So stripping away all of the overburden on the top, and then we have to use massive hundred ton shovels to dig up the tar sands and load them into enormous dump trucks that can carry four hundred tons at a time. So, to put it in perspective, for these dump trucks, the engines are four thousand hors power and the wheels on these trucks are thirteen feet hull. If you think the tires on your BMW are expensive. These tires can cost up to fiftyzero bucks each. The mining operations will also have large processing facilities where the bitchamen is separated from the oil sands using basically hot water and they extract it using...

...something called Froth treatment. So Froth treatment, basically all you're doing is attaching air bubbles to the bitchuman like little mini life jackets, so the bitchuman molecules can float to the surface in order to facilitate extraction. So the whole thing looks like a giant Latte from starbucks, where as the bitchuman with the air bubbles attached to it, floats to the top and creates this foam or froth, and you're basically continuously skimming the froth off the top. Hence Froth treatment. Once you've now got the bitchuman separated, it can be mixed with light oil, which we call condent sate or Dillu want to make it easier to move down pipelines. It basically takes the Bitchumen, because it's still these heavy molecules that are thick, and makes it a little bit lighter so it's easier to move via pipeline. So remember, because the bitchuman is still composed of heavy hydrocarbon molecules, at some point it's going to need to be upgraded into crude oil. This is generally done at an upgrader or refinery, which will talk about in the next episode. But upgrading basically involves breaking or cracking the large hydrocarbon molecules into smaller and more valuable ones that ultimately become the fuel source that we need. As you can probably tell by now, everything about the oil sands is big. It's part of the reason why it has such a profile, or high profile I guess, and get so much attention. The Alberta oil sands alone produced two point four million barrels of oil per day and two thousand and fifteen, the entire world produced just over ninety million barrels of oil per day in two thousand and fifteen. The large reserves, remember that's important to the low finding costs because it shallow, and the long lasting production...

...because of the massive deposit are part of the reason why oil sands grew in popularity so much among Canadian and foreign oil companies in the last twenty years. However, increasing costs and obviously the environmental pressure have put a lot of stress on existing projects and certainly cast out on future projects. Remember that because the oil sands is so big. I mean everything about the oil sands is big. So there's going to be a large sticker price associated with new projects. And you know in a market where you've got low oil prices or there's a pressure on spending your capital, it's pretty toft to start proposing going forward with the new oil sands project that's going to have a sticker price in the billions. The oil sands are one of the largest industrial contributors of CO two emissions in North America. That's due to the magnitude and size of the operations. An immense amount of water is used for both bitchumen extraction and steam injection, although they do try to reuse almost all of the water. In addition to that, you've got tailings ponds which are used to store the waste, waste water, and the size of the ponds really depends on the size and scale of the operations, although they are big and there's no doubt that the visual environmental impact of the oil sands is significant. Oil companies in the play are heavily focused on improving extraction methods and improving the overall environmental footprint. Like anything, there are strong arguments on both sides of the table, with the truth likely lying somewhere in between. The fact remains, though, that oil and gas operations are instrumental to day to day life on earth, at least for...

...the time being in the near future, because, at the end of the day, we all need affordable energy. It is certainly not perfect, but for better or for worse, it is here to stay until we can find something better, sustainable and certainly more economical. For now, the best thing we can do is limit the impacts based on what the environment can support, manage the existing challenges and continue to develop and innovate ways for a cleaner and more affordable energy future. Hey guys, if you like today's episode, make sure you subscribe to the podcast. Unlike most podcasts that release an episode every week or two, I did all twenty four at once, Netflix style, so you can listen to them all right now if you just hit subscribe. If you like today's episode, make sure you leave me a comment or thumbs up, or you can email me at from fossil to fuel at GMAILCOM or look me up on Linkedin on Brendan McDougall.

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