BORDER MANAGEMENT TRADE TRANSP by fjzhxb

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									THE CAN/AM BORDER TRADE ALLIANCE U.S. AND CANADIAN FOCUS
TRADE CORRIDOR - BORDER GATEWAY AND BI-NATIONAL REGIONAL ECONOMIES CONFERENCE

EDMONTON, ALBERTA CANADA OCT. 18-20, 2009 OIL SANDS TOUR FORT MCMURRAY AREA OCT. 19TH ALBERTA’S INDUSTRIAL HEARTLAND TOUR OCT. 20TH

OIL SANDS ENERGY REPORT
The Can/Am BTA Trade Corridor, Border Gateways and Bi-national Regional Economies Council was afforded the unique opportunity to be briefed, with a tour of the Oil Sands operations (including both the mining process plus the IN SITU Steam Assisted Gravity Drainage (SAGD) recovery process) received briefings including operational and environmental facts (see picture 1). Global Energy Consumption is approximately 35% Oil, 25% Coal, 21% Natural Gas, 10% Combustible Renewables, 6.5% Nuclear, 2% Hydro and 0.5% Renewables. Canada provides the most oil to U.S. (see picture 2). The Energy Challenge involves the doubling of the world population (since 1950). It is estimated to increase by 40% by 2050 (while easily recovered sources of oil are peaking with some major oil fields in decline). China and India, with a large proportion of the world’s population, are just beginning the major per capita energy use trend that will tax the capability of all types of energy supply including developing renewable. This Global Dilemma has 3 hard truths: 1) Population growth coupled with emerging nations industrializing and building infrastructure while the worsening of economic quality of life is not politically acceptable to any nation; 2) It is projected by 2015 easily accessible oil and gas will not match demand; 3) Environmental stresses are increasing. The ALBERTA OIL SANDS contain 173 Billion Barrels of Oil proven reserves that is recoverable with current technology. In total, the Oil Sands contain 1.7 trillion barrels of oil available to be recovered from new future technologies. In 2008, Alberta produced 2.1 million barrels of oil a day, of which 1.8 million barrels a day were from Oil Sands, and exported 1.5 million barrels a day to the United States.

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OIL SANDS MINING PROCESS: The mining approach is limited to areas where the overburden is of economic depth (less than 75 metres) to remove and subsequently return it. Mining makes up only about 2.5% of the geographic area containing Oil Sands. The IN SITU process that does not disturb the overburden covering the Oil Sands deposits will be utilized in 97.5% of the geographic area. Currently, 420 square kilometers are being mined. This total area, now being mined, is equal to half the geographic area of the City of Edmonton. 65 square kilometers have been reclaimed to their natural state (see picture 3) with some for habitat of Bison herds (see picture 4). The mining operation involves moving the overburden to expose the Oil Sand deposit that is then excavated using a shovel that recovers 100 tons of raw Oil Sand feed per scoop (see picture 5) and loads 4 scoops (400 tons) per truck (see pictures 6-8). Oil recovery from the mining process is 85 to 90%. The truck movements are GPS controlled (see picture 9) to optimize dumping station capacity and downstream processing of the raw Oil Sand feed through the crushing, rotary breaker, slurry steps and through the Upgrader process (cracks “heavy” hydrocarbon molecules by extracting carbon or by adding hydrogen producing light and medium synthetic crude (for feedstock) to the refinery (see picture 10) producing gasoline, diesel fuel etc. MINING OPERATION FACTS:  90% of water is recovered and recycled thus drawing a very small percent of the Athabasca River flow from which all withdrawals are regulated (Oil and Gas Industry limited to 2.2%). No process water is released into the Athabasca River.  5 to 10% energy efficiency improvement is made year over year.  Development is underway to meet the new Alberta Energy Resources and Conservation Board directive “to reduce liquid in tailings” to speed reclamation.  Radar and noise cannons are used to protect birds from landing on all settling, recycling and storm drainage ponds.  Mining Land Reclamation “as you go” is the philosophy of returning disturbed land to a productivity equal to its pre-mining condition under strict regulation of the Alberta Government. Completed reclamation has a 3 year wait before being certified to ensure monitoring is robust and complete. IN SITU Steam Assisted Gravity Drainage: Does not require removal of the surface overburden material. Each vertical well is drilled in pairs1000 to 1300 feet and then “directional drilled” sideways approximately 3300 feet (one pipe horizontally about 15 feet above the other). Initially steam is injected into both pipes to preheat the zone for about 3 months. The upper pipe is the steam injector (when production begins) as steam rises and displaces the oil downward. The lower pipe has holes with membranes that permit the heated oil to flow into the pipe while blocking entry of sand particulate matter. The geology pattern of the oil bearing strata being above limestone and below shale caprock contains the steam within the Oil Sands layer. A very small pad footprint contains 14 pairs of wells that each pair are only a few feet apart (see picture 11) at the surface (7 pairs each side of the pad in opposite directions) that are “directional drilled” below ground in parallel about 400 feet apart.

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Injector temperature is 200 degrees C and the return is at 190 degrees C so very little heat loss occurs. The life of a well is about 10 years with 50% to 60% recovery vs conventional oil wells at 20% to 30% recovery. The Bitumen yielded then follows essentially the same subsequent steps as the mined process for Bitumen. IN SITU OPERATION FACTS:  No fresh water is used. Make up water is non-potable water drawn from the Grand Rapids Sand layer that is a strata just above the shale caprock layer.  90% of water is recovered and reused.  Extensive development work is being done to improve the “steam to oil” ratio.  IN SITU wells are removed from the ground when their useful life is reached. The pipes and equipment used to re-drill at a new pad location. IN SITU processing facilities are built on piles so they too can be moved as the well pads are relocated years in the future.  The IN SITU process and the Oil sands geology result in no sinking or surface level disruption, above the wells, during or after depletion. OIL SANDS FACTS:  Oil Sands crude is equivalent to Venezuela and Nigeria conventional crude so is not the “dirty oil” some falsely make it out to be.  The Oil Sands account for 5% of Canada’s Green House Gas (GHG). Canada produces 2% of Global Green House Gas. Thus, Oil Sands account for only 0.1% of Global Green House Gas.  Total Oil Sands GHG is equal to 1% of the GHG emissions from the U.S. power generation sector.  Oil Sands GHG per barrel has been reduced 27% since 1990.  Oil Sands expend only 10-13% of energy to produce a barrel.  Oil Sands recover 99% of SO2.  The 2008 Oil Sands cost per barrel of oil produced inclusive of energy costs was in the range of $36 to $38. ENVIRONMENTAL FACTS: “Oil Sands development is proceeding under comprehensive Federal and Provincial Government regulations that control all aspects of air, water, land, wildlife and socioeconomic impacts to the Oil Sands Region and wider environment.”  Bitumen mining and extraction are strictly regulated.  Conditions of approval are issued “specific to each Oil Sands operation” by Alberta Environment.  Air quality in Alberta is generally good. Air quality in the Oil Sands region is generally better than Air quality in urban centers.  Alberta has set aside $2 billion for implementation of Carbon Capture and Storage. This involves capturing CO2 and storing it underground in deep geological formations (much like natural gas is currently stored). CO2 is a key element in the enhanced conventional oil recovery process.

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RECENT DEVELOPMENTS:  The U.S. Petroleum Industry is supporting the development of Canada’s Oil Sands as a boon to the U.S. Economy. Oil Sands are the source of 343,000 U.S. jobs and 240,000 direct jobs in Canada. Also, Oil Sands is a critically important SECURE SOURCE of oil for the United States.  The Canadian Council on Foreign Relations issued a new report finding that Energy Security & Climate Change concerns can be reconciled through prudent GHG regulations allowing robust development of the Oil Sands.  China has just invested in Canadian Oil Sands operations. This locked up China’s control of 3 Billion barrels of Canadian Oil.  China is also intending to bid on “near shore” Gulf of Mexico Oil Drilling Leases Canada exports $100 billion/year to the U.S. of Oil, Natural Gas, Uranium and Hydroelectric by integrated Grid. U.S. and Canada economies can not grow without reliable secure energy supply of which Oil is a major factor. ALBERTA INDUSTRIAL HEARTLAND: Formed in 1998. It is composed of 3 Counties plus the City of Fort Saskatchewan. Its size is 533 square kilometers of Industrial Park. Complimentary Area Structure Plans (CASP’s) created a heavy industrial zone to capitalize on the natural advantages this area has to offer. Cross-roads of Alberta’s oil/gas pipeline system �� Salt caverns for gas and compressible liquids storage �� Access to both national rail systems and established logistical centers �� Skilled labor force ��Well established supply and service industry �� Pre-zoned land for heavy/medium industrial development �� Investment friendly governments �� Support organizations and agencies Three Refineries are located within the Heartland: Suncor - Imperial Oil - Shell Oil. The Industrial Heartland area contains numerous Energy, Chemical and support plant operations in a planned, harmonized area that “teams up” four separate local Government authorities. It is served by efficient road and rail service. The Alberta Industrial Heartland is an impressive and successful accomplishment!

Jim Phillips
canambta@aol.com Future Can/Am BTA Conferences :Ottawa, Ontario :Washington, D.C. Oct.
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May 2-4, 2010 Sept. 19-21, 2010 :Port Huron, Michigan 17-19, 2010

Picture 1: BRIEFING AT OIL SANDS SITE

Picture 2: OIL SUPPLIERS TO THE US

Picture 3: FULLY RECLAIMED MINED LAND

Picture 4: RECLAIMED LAND BISON HABITAT

Picture 5: 100-TON PER SCOOP SHOVEL

Picture 6: TRUCK WITH 400-TON LOAD

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Picture 7: 400-TON (LOAD) TRUCK IN SHOP

Picture 8: FRONT OF 400-TON TRUCK

Picture 9: GPS TRUCK FLEET MINING OPERATION

Picture 10: REFINERY IN ALBERTA HEARTLAND, CITY OF EDMONTON IN BACKGROUND

Picture 11: IN ON WELL PAD (14 PAIRS) 6

SITU WELL PAIRS


								
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