Price of Oil - GreenLearning Canada

Oil Sands?

Oil sands occur naturally and are a mixture of thick, heavy oil, water, sand and sometimes clay. The consistency of oil sands is similar to that of chunky peanut butter. or molasses in cold weather. Bitumen is a heavy form of crude oil. In an oil sand deposit, each grain of sand is covered by a thin layer of water and then by a layer of the highly viscous bitumen.

Geologically, the oil sands in Canada are found in the McMurray Formation and consist of fine- to coarse-grained quartzitic sand and sandstone, interbedded with lesser amounts of silt, mud, clay and, less commonly, thin coal beds. . Like conventional crude oil, the bitumen probably formed millions of years ago from the remains of tiny sea creatures that lived in an ancient ocean that once covered Alberta. In the case of the oil sands, the petroleum moved upwards from where it formed and saturated large areas of sand closer to the surface. Bacteria then fed on the lighter petroleum chemicals in the oil, leaving behind only the molasses-like bitumen.

Unlike conventional crude oil, bitumen is too thick and viscous to flow naturally or to be pumped out of the ground unless it is heated or diluted with a solvent.

Terminology

While technically called “bituminous sands,” Alberta’s deposits were originally called “tar sands” because of their thick, sticky properties. Indigenous peoples knew about and used oil sand that oozed to the surface. Because it resembled tar, Europeans called it tar sands and this name stuck. The term “oil sands” or “oilsands” gained popularity in the mid-1990s after government and industry efforts to improve public perception of the dirty-sounding tar sands. Both terms are currently used.

Location

Much of the world's oil (more than 2 trillion barrels) is in the form of tar sands, although it is not all recoverable. While tar sands are found in many places worldwide, the largest deposits in the world are found in Canada (Alberta) and Venezuela, and much of the rest is found in various countries in the Middle East.

source: http://www.pembina.org/oil-sands/os101#footnote6_ldxgjgj

Canada’s oil sands are found in three deposits – the Athabasca, Peace River and Cold Lake areas in Alberta and part of Saskatchewan, with the greatest quantity found in the Athabasca region.

Getting it out of the ground

There are two ways to recover oil sands – mining or in-situ. The method used depends on the depth of the resource. Most of the oil sands projects today and almost all of the new ones starting up are using the in situ method.

Mining
If the oil sands are near the surface, they're removed using surface mining, a process that begins with large trucks and shovels. The area is first removed of “overburden”: trees are cleared, muskeg is drained of water and removed, and then the underlying clay, silt and gravel is removed to expose the oil sands deposit. Only 20 percent of all oil sands are close enough to the surface to be mined.

New methods introduced in the 1990’s considerably improved the efficiency of tar sands mining, thus reducing the cost. These systems use large hydraulic and electrically powered shovels to dig up tar sands and load them into enormous trucks that can carry up to 320 tons of tar sands per load.

source: http://www.imperialoil.ca/Canada-English/operations_sands_glance_101.aspx

After mining, the tar sands are transported to an extraction plant, where a hot water process separates the bitumen from the sand, water, and minerals. The separation takes place in separation cells. Hot water is added to the sand, and the resulting slurry is piped to the extraction plant where it is agitated. The combination of hot water and agitation releases bitumen from the oil sand, and causes tiny air bubbles to attach to the bitumen droplets. These then float to the top of the separation vessel, where the bitumen can be skimmed off. Further processing removes residual water and solids. The bitumen is then transported and eventually upgraded into synthetic crude oil.

About two tons of tar sands are required to produce one barrel of oil. Roughly 75% of the bitumen can be recovered from the sand. After oil extraction, the spent sand and other materials are then returned to the mine, which is eventually reclaimed.

In-situ
If the oil sands are deeper underground, they're recovered using "in-situ" techniques. “In-situ” is Latin for “in place.” In-situ technologies get their name because they remove oil from oil sands while leaving the sand in place.

In-situ technologies include cyclic steam stimulation, where high-pressure steam softens and dilutes the bitumen so it can flow to the well during the production phase. Cyclic steam stimulation is often preferred for thick, high-quality reservoirs since it typically provides higher recovery than steam-assisted gravity drainage. A second technique, steam-assisted gravity drainage (SAGD), injects steam into a bitumen formation with one pipe, and then brings the softened hydrocarbon to the surface with another pipe. The newest version of this, solvent cyclic steam-assisted gravity drainage (SC-SAGD) adds solvent and reduces the need for as much water and energy to be used – and aims to cut down on greenhouse gas emissions.

Cyclic Steam Stimulation

http://birchwoodresources.ca/node/23

Processing

Before it can be refined like conventional crude oil, bitumen must be upgraded into synthetic crude oil. Upgrading is a process that converts heavy oil into a hydrocarbon product with a density and viscosity similar to that of light crude oil by using heat to crack big molecules into smaller ones. The upgrading process can require high temperatures, high pressure, catalysts and hydrogen; thus, energy is consumed during upgrading.

Impacts and Effects

Both mining and processing of tar sands involve a variety of impacts – both positive and negative. Although the media sometimes seem to portray it as a black-and-white issue and talk about environmentalists and First Nations groups versus big oil companies, the situation is much more complex. All sides acknowledge that there are effects that need to be acknowledged and constantly monitored. These include:

Economic
• jobs created locally
• infusion of goods and services
• jobs and economic benefits for First Nations communities
• precarious employment for some
• dependence on vagaries of world oil prices

Environmental
• contributions to climate change
• greenhouse gas emissions
• water required in recovery process
• impacts on local wildlife and on migration routes

Social
• benefits to First Nations and Métis communities
• possible short and long-term health effects on local communities
• the need to negotiate impacts carefully
• possible interaction with treaty rights of First Nations and Métis peoples