Utah’s oil sands a resource for domestic energy and jobs

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Collaboration with Canada continues to drive energy and economic development in Utah as unconventional oil resources are explored

One of the nation’s largest potential hydrocarbon resources is contained in oil sands in Utah. The oil sands at PR Spring are located on Utah’s remote East Tavaputs Plateau, and they are estimated to contain the equivalent of over 4.5 billion barrels of oil. As oil prices hover around $100 a barrel and we look to domestic fuel sources, unconventional options are moving into the spotlight. Oil sands are important for applications such as transportation fuel and native asphalt.

The cost and impact of extraction of any fuel source must be carefully considered, and Utah is looking to Canada for information and expertise on the development of oil sands. Alberta is home to the Athabasca oil sands which contribute to Canada possessing the third largest source of oil in the world, after Saudi Arabia and Venezuela. The sands are estimated to contain 1.7 trillion barrels of bitumen, a high viscosity hydrocarbon.

To recover bitumen, techniques such as surface mining and steam assisted gravity drainage have been used since the 1960s. In situ extraction, which involves injecting steam heat into the ground to reduce the viscosity of bitumen, allows deeper reserves to be produced in a way that is similar to the extraction of conventional crude oil.

During the November 2011 trade mission to Canada, Governor Gary R. Herbert attended a meeting with the Canadian Association of Petroleum Producers (CAPP) during which technologies and practices used to develop Alberta’s oil sands were discussed. The briefing was facilitated by Cameron Todd of US Oil Sands Inc., the company that is developing Utah’s resource at PR Spring. The Governor, along with several academic and industry leaders from Utah, investigated the transferability of this Canadian expertise and mining technology to Utah’s PR Spring, along with several up and coming technologies that could have a transformative impact on how bitumen is extracted.

Notable differences exist between the environments in which the respective Canadian and Utah oil sands sit, including the availability of surface water. One of the new methods being explored by US Oil Sands for extraction is the use of organic solvents to separate the sand from the bitumen. Conventional methods of extraction involve using two to four barrels of water to produce one barrel of oil from oil sands. According to Todd, the use of a solvent allows 95% of production water to be recycled, reducing that amount to one and a half barrels of water per barrel of oil. The company doesn’t plan to use surface water, but rather to source the water from a half-mile deep well that has already been drilled.

The other hurdle is land access and environmental preservation. “It is important to explore this opportunity to utilize the resources in our backyard and create jobs in Utah while preserving this remote area of our state,” said Al Walker, USTAR Technology Outreach Director. In addition to the Governor’s trade mission, Walker has been involved in multiple trips to Canada to research best practices of the economic and environmental aspects of the oil sands industry.

“Ninety-eight percent of our organic solvent can be reused, and the remaining two percent is biodegradable and is already being used in applications with close environmental contact, including in foods, cosmetics, and biodegradable soaps,” said Todd. US Oil Sands has approval for their project from the Department of Oil, Gas, and Mining. Research and development of the PR Spring resource began in 2005, and commercial development will begin in 2013.

Utah collaborations with Canada are profitable in other ways aside from the study of oil sand technology. Canadian companies currently employ about 300,000 US citizens. The Athabasca sands sit in a remote area in the middle of Alberta, a province of about 3.7 million people.

“Considering that this area contributes to Canada having the third largest oil reserve in the world, Alberta must look beyond its own population to find sufficient talent and workforce to run the operation. That’s where Utah’s can contribute,” said Walker. He added that companies developing the Athabasca sands are willing to regularly transport Utah skilled labor to Alberta. “In a way those Utahns are expats, but that economic benefit comes right back here to the state. It’s a win-win for both Utah and Alberta.”

Utah and Canada have long been partners in the energy industry in private, public and academic sectors. During another portion of the trade mission, Walker spoke at the University of Calgary, where he outlined the importance of collaboration between these sectors to further economic development as it relates to energy.

Several Canadian professors are now employed at Utah universities researching innovative energy production and efficiency. USTAR Professor Dr. John McLennan, a Canadian, conducts research at the University of Utah’s Energy Geoscience Institute (EGI) in enhanced geothermal systems and unconventional oil and gas well stimulation.  EGI is the largest institute of its kind with more than 65 global energy company members that use EGI’s research staff and facilities to unlock resources such as gas from shale, oil from shale, and geothermal energy.

In addition, USTAR employs Technology Outreach Directors, such as Walker, to assist in connecting innovative research with industry and job-creating potential. The trade mission to Canada was a successful springboard for continued partnerships and innovations in areas such as unconventional energy development.

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