UNLOCKING BURIED OIL RESERVES

By Mark Lowey

he challenges are huge but the prize is enormous.

The Alberta Ingenuity Centre for In Situ Energy, an initiative of the University of Calgary’s Institute for Sustainable Energy, Environment and Economy (ISEEE) is leading a bold new program that promises to transform Alberta’s oil sands industry and make Canada a global powerhouse in clean energy.

The initiative, which received major funding this week from the Alberta Ingenuity Fund, is the focus for a revolution in the way the oil sands are produced to create commercial fuels and spin-off products, such as petrochemical feedstocks.

“ It requires a lot of research and a big effort, but the University of Calgary is very well placed to do this,” says Dr. Pedro Pereira-Almao, Professor of Chemical and Petroleum Engineering and an Alberta Ingenuity Fund (AIF) Scholar. He and fellow AIF Scholar, Dr. Steve Larter, are leading the new centre and R&D initiative.

“Essentially, we’re trying to develop technology for creating a whole new set of processes for recovering the energy from the oil sands in a clean way and avoiding the environmental impacts,” says Larter, the U of C’s Canada Research Chair in Petroleum Geology in the Department of Geology and Geophysics.

Alberta’s 175 billion barrels of established oil sands reserves make Canada one of the top two countries in terms of proven or economically recoverable crude oil reserves. And the total oil sands resource in place for potential recovery is even more immense – an estimated 1.6 trillion barrels, according to the most recent figures from the National Energy Board.

There’s just one problem. Ninety-three percent of this vast energy source is locked in bitumen deposits too deep underground to be mined at the surface. So other methods must be used to coax the molasses-like bitumen, the “raw” heavy crude oil, to the surface.

Industry now does this “in situ,” or in place in the reservoir, by drilling wells into the bitumen deposit, then injecting steam underground. The hot steam loosens the bitumen so it flows into a horizontal well and can be pumped to the surface.
Dr. Roger Butler, U of C professor emeritus of Chemical and Petroleum Engineering, invented this technology, called Steam Assisted Gravity Drainage or SAGD (pronounced SAG-D). It unlocked billions of barrels of oil sands that otherwise would have been inaccessible.

However, huge amounts of natural gas or methane – a high-priced, clean-burning fuel – must be burned to generate the steam required for SAGD. “It’s not a very energy efficient process,” Larter notes. “You use high-quality fuel, methane, to produce a low-quality fuel, bitumen.”

Once the bitumen is pumped to the surface, it has to be diluted by adding other oil and gas products so it can be transported by pipeline. Then, this heavy oil must be refined in upgrader plants into light synthetic crude oil, typically through thermal-cracking – cooking the bitumen at high temperatures. This requires still more energy and produces large amounts of waste residue called petroleum coke.

“ This ‘brute force’ approach is clearly not sustainable, because of the inefficient energy use and environmental impacts,” Pereira-Almao notes.

One of the main R&D thrusts of the new Alberta Ingenuity Centre for In Situ Energy will be to develop advanced chemical catalysts to speed up the chemical reaction during upgrading. “We want to make more energy-efficient processes and better-quality products, reduce the amount of waste, and enhance the quality of fuels produced,” Pereira-Almao explains.

Along with the anticipated Alberta Ingenuity Fund support for the new centre, the Alberta Energy and Research Institute (AERI) has contributed almost $900,000 over three years in separate funding to Pereira-Almao and U of C colleague Dr. Josephine Hill, Assistant Professor of Chemical and Petroleum Engineering, for projects in advanced catalysis.

“ This is an extremely important area for us,” says Eddy Isaacs, AERI’s managing director, who calls catalysis a “platform technology.” In addition to reducing energy use in oil sands and heavy oil recovery and upgrading, advanced catalysts can also be employed in other sectors, such as developing clean coal power plants and producing petrochemicals, Isaacs says.

The other major thrust of the new U of C centre is sometimes called the “holy grail” of clean energy research and technology development.

The ultimate goal of ISEEE’s multidis-ciplinary, mission-focused research team, along with public and private sector partners, is to develop novel methods and technologies for doing some or even all of the oil sands upgrading underground – right in the reservoir where the bitumen is located.

Imagine being able to tap Alberta’s immense oil sands resource without digging up the landscape, or using large volumes water to make steam, or burning dwindling natural gas supplies, or emitting greenhouse gases like carbon dioxide.
Through developing an advanced catalyst that could be injected directly into the reservoir, “we would make a chemical reactor down there, right in the hole,” Pereira-Almao says.

The aim is to create a controlled chemical reaction that brings to the surface only the valuable energy products, such as already upgraded oil, methane gas, petrochemical feedstocks and, eventually, hydrogen. At the same time, all the unwanted byproducts – metals, sulphur, coke and carbon dioxide – would be permanently left behind underground.

“ Within five years, we hope to be doing something completely different,” Larter says. “If we added another one-percent recovery of bitumen, even a modest one percent, that’s equal to the whole recoverable oil reserves of the North Sea.”

The U of C has built an experienced advanced catalysis group around Pereira-Almao since recruiting him from PDVSA-Intevep in Venezuela, where he co-invented several major upgrading technologies. Adding Larter, from the University of Newcastle upon Tyne in the U.K., gives the U of C one of the world’s leading experts in the origin and chemical makeup of fluids in oil reservoirs.

The principal investigators for the research also include Drs. Larry Lines, head of Geology and Geophysics, and Brij Maini and Gordon Moore from Chemical and Petroleum Engineering. Moore and his department colleague, Dr. Raj Mehta, are internationally recognized leaders in in situ combustion techniques. It will be their job to create a controlled burn in the bitumen reservoir, to generate the temperatures and other conditions needed to make the underground reactor work.
Maini is an expert in heavy oil recovery, including SAGD and the VAPEX technology that uses solvent instead of steam to recover oil sands bitumen. Lines is an expert on geophysical imaging.

Delineating and characterizing the structure and chemical makeup of oil sands reservoirs before creating an underground chemical reaction will be crucial. This is where U of C researchers like Lines, along with Drs. Rob Stewart, Apostolos Kantzas, Donald Lawton, Tony Settari and others with significant strengths in advanced seismic imaging, geostatistics, geochem-istry and geology will play a vital role.

Other participants include Dr. Tom Harding, head of Chemical and Petroleum Engineering, Dr. Josephine Hill and Drs. Raj Mehta, Cynthia Riediger, Ronald Spencer and Harvey Yarranton.

The U of C’s new centre received several letters of support from the oil and gas industry, including one from Gwyn Morgan, president and CEO of EnCana Corp. He envisions the centre, backed by both public and private sector funding, taking the leading role in doing the R&D necessary to maintain the oil sands sector’s continuous improvement in energy use and environmental performance, and to potentially make the breakthrough that will transform the sector.

“Given my overall support for ISEEE in the first place, this seems to be one of the ideal things we should be doing together,” says Morgan, a member of ISEEE’s Leadership Board.

Robert Mansell, ISEEE’s managing director, says the Alberta Ingenuity Centre for In Situ Energy is exactly the type of collaborative, multidisciplinary and mission-oriented initiative that the one-year-old institute was intended to develop and champion. “The centre has the real potential to unlock an oil sands treasure worth trillions of dollars,” he says. “It’s an extremely important initiative, not just for ISEEE or for the university, but for the province and for the country.”

A year in review: ISEEE moves ahead

The University of Calgary’s Institute for Sustainable Energy, Environment and Economy (ISEEE) has made good progress in its first year but is looking to accelerate funding support and program development, says ISEEE’s managing director.

ISEEE initiatives will have attracted more than $10.5 million in external funding by the Institute’s first anniversary at the end of this month, says Dr. Robert Mansell, who is also Special Adviser to U of C President Dr. Harvey Weingarten on Energy and the Environment. This includes major funding announced this week from the Alberta Ingenuity Fund, and almost $1.8 million in funding awarded in the past year by the Alberta Energy and Research Institute (AERI). AERI’s funding includes:

$777,900 over three years for two projects in advanced catalysis, led by Dr. Pedro Pereira-Almao in Chemical and Petroleum Engineering;

$265,680 to Drs. Tom Harding and Brij Maini in Chemical and Petroleum Engineering, to optimize well configuration in SAGD technology;

$272,800 to Drs. Raj Bishnoi and Brij Maini in Chemical and Petroleum Engineering, to investigate carbon dioxide sequestration using gas hydrates (ice-like deposits of methane gas);

$198,900 to Dr. Rob Stewart, Director of CREWES (Consortium for Research in Elastic Wave Exploration Seismology) in Geology and Geophysics, for seismoelectric exploration for hydrocarbons and monitoring of producing oilfields;

$150,000 to Dr. Naser El-Sheimy in Geomatics, to develop a next-generation MEMS-(microelectromechanical system)-based surveying system for oil and gas drilling operations;

$120,000 to Drs. Josephine Hill and Pedro Pereira-Almao in Chemical and Petroleum Engineering, to test “ring-opening” catalyst for hydrocarbons recovery and upgrading.

AERI has also contributed $500,000, as part of a larger funding request, toward the Western Canadian Fuel Cell Initiative, championed by Dr. Martin Kirk, Director of Research Services and Associate to the Vice-President (Research and International), and co-chaired by fuel cell researchers Dr. Viola Birss, Professor of Chemistry at the U of C, and Dr. Karl Chuang at the University of Alberta.
In August, Alberta Energy announced a $1-million government grant to ISEEE. The money will be used to further research, in partnership with AERI, other universities and the oil and gas industry, in several key areas, including:

• advanced hydrocarbons recovery and upgrading (in situ oil sands, conventional oil and gas, and unconventional gas)
• carbon dioxide and water management;
• energy and environmental systems modelling, integration and policy;
• electricity: a new export industry

Mansell says there are also plans, pending funding from Alberta Infrastructure, for a new research and technology development facility on campus, to be built in three modules each costing about $50 million.

The 600,000-square-foot building would house the National Institute for Sustainable Development Technologies, being proposed in conjunction with the National Research Council of Canada, as well as provide space for various energy and environment multidisciplinary teams and expansion of programs in Engineering and other faculties.

The plans also include space for related institutes and centres that would benefit from being close to the U of C, both in terms of synergies and increasing their participation in the university’s research and education activities.

ISEEE Timeline

1974
Government of Alberta launches Alberta Oil Sands Technology and Research Authority (AOSTRA) to fund research to make oil sands economically feasible.

Late 1990s
AOSTRA has achieved its mission and is winding down. The Government of Alberta challenges the Alberta Science and Research Authority to develop an energy innovation and research strategy for the period to 2020.

August 2000
The Alberta Energy Research Institute (AERI) is established. AOSTRA is dissolved and its assets are transferred to AERI. AERI’s mandate is to promote energy research and technology evaluation and transfer in strategic areas, including oil and gas, heavy oil and oil sands, coal, electricity, renewable and alternative energy.

October 2001
AERI releases first draft of Alberta Energy Research Strategy.

November 2001
Discussions begin with the National Research Council of Canada to develop an institute at the University of Calgary focused on sustainable development and alternative energy.

April 2002
U of C adopts an Academic Plan, Raising Our Sights, which establishes “Leading Innovation in Energy and the Environment” as one of four strategic priorities and an area where the university has potential to reach international pre-eminence.

September 2002
U of C establishes a steering committee and a working concept called the “National Institute for Sustainable Energy, Environment and Economy” or “NISEEE” (later shortened to ISEEE) to implement its energy and environment initiative.

October 2002
U of C meets with key leaders from the energy industry, AERI, and the provincial government to seek input and engage the energy sector in the planning of the energy, environment and economy initiative.

January 2003
AERI launches a national Challenge Dialogue to bring together industry, research and government players to engage diverse stakeholders, to develop a collaborative plan to meet the key energy and environment challenges.

February 2003
U of C organizes a workshop involving over 100 faculty and researchers from across campus to develop a research inventory and identify research groups working in energy- and environment-related areas to further define areas of research focus and to identify areas where the university can play a leadership role and contribute.

April 2003
U of C identifies four main areas of research focus from the Alberta Energy Research Strategy where the university is well-positioned and prepared to provide leadership:

• Alternative Energy
• Advanced Recovery and Upgrading
• CO2 Management
• Water Management

U of C realigns existing resources and commits new resources to these priorities.

October 2003
The U of C appoints Dr. Robert Mansell, Special Advisor to the President on Energy, Environment and Economy and Managing Director, to lead the Institute for Sustainable Energy, Environment, and Economy (ISEEE) at the university.
The Alberta Ingenuity Fund announces funding of up to $7.5 million over five years to create the Alberta Ingenuity Centre for Water Research, a collaboration by the University of Lethbridge, University of Calgary and University of Alberta.

February 2004
The U of A, U of C, and U of L sign a Memorandum of Understanding to promote coordination and collaboration in research and education related to the implementation of Alberta’s energy and environment strategies.

March 2004
Initial members of ISEEE Leadership Board announced and ISEEE website launched.

Throughout 2004
AERI invests more than $1.78 million in ISEEE in strategic project areas.

August 2004
Alberta Energy contributes a $1-million government grant to ISEEE and its research partners.

October 2004
Alberta Ingenuity Fund contributes major funding for the U of C-ISEEE In Situ Recovery and Upgrading Centre