You probably don’t need me to tell you that technological innovations in shale drilling technology are the reason why U.S. oil companies are are boosting production despite the low oil price environment that has plagued the industry.
But it’s not just shale oil technology that’s been upgraded recently.
Oil sands operations in Alberta, Canada have been working toward more affordable, more environmentally friendly technology as well.
Unlike tight oil, the bituminous sands in Canada cannot be extracted as easily, especially considering the fact that a huge amount of the oil sands resource being too deep to be mined. Instead, companies have to rely on in-situ methods such as SAGD.
The heating process tends to use a lot of water for steam and a lot of natural gas—about 1,000 cubic feet per barrel of oil produced.
And make no mistake, the process can be costly too. The average break-even price for this kind of operation is about $65 per barrel of oil. I’m sure you can see why this is an economic problem for oil sands producers.
However, several companies have gone the way of shale oil drillers by looking into new ways of extracting their oil supply.
A consortium consisting of Suncor Energy Inc., Devon Energy Corp., Cnooc Ltd.’s Nexen Energy ULC unit, and Harris Corp. have planned a small-scale test of a combination of newer technologies.
The project will consist of replacing the steam and natural gas heating process with electromagnetic waves that will heat the subterranean oil deposits from the surface. The melted supply will still have to be allowed to sink and then pumped back up, but will be diluted with reusable chemical mixtures that will ease the movement of the oil.
This will save on energy—cutting up to 75% of current usage—which will cut costs and environmental damage.
Another project is in the works from Cenovus Energy Inc. in Calgary, Canada. The company plans to use the traditional steam assisted gravity-drainage process, but will be the first commercial-scale project to use butane as a solvent.
This will lower the melting temperature of the oil supply, which means less water and natural gas will be consumed. This project, like many U.S. shale projects, was delayed when oil prices dropped, but has continued development this year.
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Until next time,
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