steaming for oil in Canada

Research and technology are the keys to unlocking the reserves in Cold Lake, Alberta.

This article originally appeared in the Lamp, 2008 — Number 1

Alberta is a vast Canadian territory of rolling prairies, vibrant cities, mountain hamlets and turquoise lakes. It has an air that speaks of both calm and excitement, of prosperity, innovation and ingenuity. This is particularly apparent in northern Alberta, where a series of geological events occurring more than 100 million years ago left behind a huge swath of hydrocarbons.

Also referred to as oil sands, northern Alberta’s heavy oil reserves are estimated to be the world’s largest-known hydrocarbon resource. With about 300 billion barrels of known recoverable reserves, the oil sands exceed even Saudi Arabia’s reserves. And Imperial Oil Ltd., an ExxonMobil affiliate, is working diligently to develop the oil sands to feed an increasingly energy-hungry world.

“The global demand for energy in the year 2030 will be about 40 percent higher than it was in 2005,” says Randy Broiles, Imperial Oil’s senior vice president of the resources division. “Canada’s oil reserves are contributing to world supply today, and its resources will become increasingly important. The country offers a vital energy supply in a stable political environment.”

But while the prize is huge, producing this heavy oil presents a daunting technological challenge. This is not your conventional sweet crude that bubbles from the ground. The oil sand has a consistency somewhere between ketchup and peanut butter. It has taken a multibillion-dollar investment to turn it into something to put in your car.

What makes it all the more challenging is the two distinct means by which the oil is produced. In the Athabascan region of Alberta, the sandy earth just below the topsoil is drenched in oil, and the production process involves mining to separate the oil from the sands. Syncrude Canada Ltd (Imperial interest 25 percent) employs mammoth dump trucks and shovels, along with cutting-edge oil-sands technology, capable of producing up to 350,000 barrels of oil a day. Planning is under way to develop a new Imperial Oil and ExxonMobil Canada oil-mining project called Kearl, in an area that could yield over its life 4.6 billion barrels of oil.

In another area of Alberta called Cold Lake, the oil is about 1,500 feet below the surface, too deep to be mined. Imperial Oil is the sole producer of a field in Cold Lake that in 2007 produced an average of more than 150,000 barrels of oil a day. The reserve, nestled among evergreens, is the largest thermal in-situ oil sands operation in the world and the premier in-situ project in Canada. Above ground, with about 200 pads each containing from 20 to 30 wells, Cold Lake looks and, in some ways, acts like a conventional oil operation. Where it differs is in the incredibly complex operation that happens below the surface, where the thick oil stubbornly sits, and where Imperial Oil has been tremendously successful at coaxing it out.

“We have been a pioneer in the development of Alberta’s vast oil sands resources for many decades — in both in-situ and mining projects,” says Broiles. “It’s taken an incredible commitment and a continued focus in research and technology development and our growing expertise in thermal operations. Were going to continue with the success we’ve experienced in these areas.”

Steaming for oil

Imperial Oil’s Allan Lariviere, manager of Cold Lake geosciences, calls the area a “geological sweet spot” for in-situ oil extraction. In layman’s terms that means there’s a lot of oil there, and Imperial Oil has been working in the area since the 1960s, when it launched a series of research projects that today make it so successful, to produce that oil.

Those research efforts from the beginning have focused on a process called cyclic steam stimulation (CSS), nicknamed “huff and puff.” In 1966, the company applied to patent the process, and today it is the industry standard for in-situ recovery.

As Imperial’s Vice President of Oil Sands Development and Research, Eddie Lui, explains it, CSS is a process whereby steam produced in large boilers is injected into the ground at very high pressures, where it soaks, softens and mobilizes the oil from most of the sand. After a set period — anywhere from a few months to a few years — the heavy oil and water are pumped to the surface. After the water is removed, the oil is mixed with a light hydrocarbon liquid to make it less viscous and enable it to be shipped through pipelines to processors to North American markets.

“It may sound like a simple process,” Lui says, “but it took us until 1985 — more than 20 years of working with the technology — to make it commercially viable. When we first started, we were only producing about 13 percent of the heavy oil in the reservoir. Now, we are at about 30 percent. The difference is a tremendous amount of new technology and research.”

Some of the advances include computer-generated mapping to understand the reservoir and better predict how the steam will loosen up the oil. Directional drilling techniques have also helped increase a well’s reach and coverage, as well as lessen the environmental footprint. The company took a phased approach to development, to allow advances in technology to be fully incorporated into each new production phase, Lui says.

He is particularly excited about another Imperial Oil innovation called liquid addition to steam to enhance recovery or LASER, a process that involves adding special solvents to steam to increase a well’s life and enhance efficiency. The company is in its first phase of commercializing the innovation.

“We’re always working to do better,” Lui says, “and we continue to look at new processes to further improve recovery while protecting the environment.”

Another key to Imperial’s success is its cogeneration plant, which supplies the operation’s electricity, and a state-of-the-art water-recycling plant. The company’s commitment to reusing water (the plant recycles 95 percent of approximately 625,000 barrels of water needed daily for oil production) has made Cold Lake a model of efficiency in the booming Canadian oil sands industry.

“We have put a tremendous amount of time and resources into our commitment to limit freshwater requirements,” Sandy Martin, Cold Lake’s plant operations manager, says. “In doing so, we’re helping the environment, the community and the company.”

Integration through all of the phases

Imperial Oil’s Randy Broiles says that one of the keys to Cold Lake’s success is the company’s integrated staff, where executives work with researchers, who work with geoscientists, who work with engineers, who work with plant managers.

“This is a highly integrated team,” says Broiles.

Ron Myers, who holds a Ph.D. in chemistry and is Imperial’s manager of facilities and environment research group, agrees. Imperial has provided $10 million in funding over a five-year period to the Center for Oil Sands Innovation at the University of Alberta in Edmonton. The funds are being used for research to enhance productivity and sustainability of oil sands operations. Myers’ job is to take that research and apply it to the field. In doing so, he gets to see firsthand the kind of integration Broiles refers to.

“We all have different responsibilities, but end of day we work closely together to increase production, lower costs and increase environmental performance,” Myers says.

Broiles says it’s the company’s commitment to technology — and this kind of cooperation across the field — that gives Imperial Oil the edge when working in Canada’s oil sands.

“Our technological advances make oil sands extraction and production economically and environmentally attractive while providing a strong competitive advantage.”