Joy Romero doesn’t flinch when asked whether her company’s new oil sands mining technology, In-Pit Extraction Process (IPEP), is revolutionary.
“This is absolutely a game changer on all fronts— environmental, cost, competitiveness, productivity. All of those points get hit by this technology,” the vice president of technology said, adding Canadian Natural Resources Ltd. (CNRL) recently started a $46 million, 500 tonnes per hour IPEP field pilot project at its Horizon oil sands facility in northern Alberta that produces about 250,000 barrels of synthetic crude oil per day (bbl/d).
How much of a game changer?
For starters, no more tailings ponds, which have been an environmental headache for industry and a favorite target for Hollywood eco-celebrities like Jane Fonda or rock stars like Neil Young, who famously compared them to Hiroshima after the atomic bomb was dropped on the city in 1945.
Oil sands mine sites are typically several miles or more from a central extraction plant that produces a bitumen-in-water product, which is then turned into diluted bitumen (the gooey bitumen is mixed with a light hydrocarbon diluent) in a froth treatment facility. Tailings containing heavy metals and chemicals are left to settle in huge ponds, which together occupy more than 30 square miles.
The new process turns that model on its head, employing a mobile modular unit developed by CNRL technicians that operates at the mine face.
“It takes oil sands from the mine face, separates out the bitumen [and] drops the sand behind it, creating dry stackable sand. The mine site is immediately ready for reclamation,” Romero said during an interview. “In combination with other work that we were doing on a go-forward basis, we will not have tailings ponds. We will not be generating tailings ponds at our facility.”
New rules from the Alberta government require oil sands operators to restore the mine site 10 years after closing, creating a significant liability for industry. Romero said that combined with other improved technologies that have already reduced CNRL’s tailings ponds footprint by 50%and water consumption by more than 30%, IPEP will dramatically lower the company’s reclamation costs.
IPEP also reduces greenhouse gas emissions by as much as 40%, lowering the carbon intensity of the heavy crude oil below that of most of its competitors, which Alberta oil sands producers believe will be a competitive advantage as more countries price carbon.
“On our oil sands right now, we sit at approximately 5% greater than the U.S. average barrel of crude [the benchmark against which crude oil carbon intensity is measured],” Romero said, noting the pilot project will help CNRL engineers better determine the new process’ carbon performance. “It’s important that Canada is part of the lower carbon energy future for decades to come. When other sources of oil are used globally, their footprint is actually higher than what we are using here and producing.”
“Carbon competitiveness” is half of the oil sands mantra and “cost competitiveness” is the other for an industry that has a well-earned reputation for high production costs.
Like the U.S. shale basins, for instance, oil sands companies have been developing and implementing new technologies that have driven down costs ever since global oil prices plunged in late 2014. Romero estimated that IPEP should shave $2 off CNRL’s average operating cost per barrel of $20. “The extraction plant moves as the mine face advances. Normally, plants sit outside the mine pit; this one actually fits inside. That alone reduces material transport costs hugely because you don't have miles and miles of transportation from the mine pit to the processing facility,” she said.
IPEP was developed internally by CNRL technicians using off-the-shelf mineral processing equipment.
“We’re really proud of the team that came up with this technology. It is flexible; it’s nimble; it can respond at the mine face—absolutely a game changer,” according to Romero, who said that if IPEP proves out it will be used at the company’s other big oil sands operation, the 190,000 bbl/d Athabasca Oil Sands Project (the Jackpine mine expansion already has regulatory approval for another 100,000 bbl/d of production), in which CNRL purchased a 70% working interest in 2017.
Once the IPEP test project is completed, CNRL intends to share the technology through the Canadian Oil Sands Innovation Alliance (COSIA), an industry group that helps coordinate technology sharing and development between major industry players in the areas of greenhouse gases, land, water and tailings. “We have different opportunities to work this, and we’re in the process of figuring out what that will look like,” she said.
While the oil sands is publicly vilified for producing high-carbon intensity “dirty oil,” good news stories stories like IPEP are poorly understood within Canada and virtually unknown outside the country. That has to change, Romano said. “It’s really important that Canadians understand how responsible and sustainable our barrel of bitumen currently is and how hard we’re working to improve that even more,” she said. “And that it is very important that Canadian oil is a part of the global mix because it does have a lower carbon footprint.”