October 1, 2007

Oil sands firm says underground bitumen production could cut GHG emissions by up to half

Adopting an underground bitumen production process could help the oil industry achieve substantial reductions in greenhouse gas (GHG) emissions while maintaining current levels of production, says OSUM Oil Sands, a Calgary-based energy company that has developed a proprietary oil sands production process.

Andrew Squires, the company's vice-president of engineering, said OSUM's underground thermal process "could reduce greenhouse emissions significantly-by as much as half in a number of cases. This is mostly achieved because of lower steam-to-oil ratios in underground production. A reduced steam-to-oil ratio means less fuel is burned, and the result is fewer emissions to produce the same amount of bitumen," he explained.

The company acknowledges that its figures are based on the number of barrels produced. But Squires said this is a realistic approach, since worldwide energy demand is not likely to decline in the short term. "Companies need to focus on reducing emissions for each and every barrel, as long as bitumen is being produced," he said.

OSUM's underground process is a variation of the surface-based steam-assisted gravity drainage (SAGD) method now commonly used throughout the oil sands. From a technical perspective, the main difference between surface and underground SAGD is that the wells are delivered from a tunnel between 200 metres and 700 metres deep rather than from pads on the surface.

Because the process is carried out below the bitumen deposit, OSUM gets both the "true benefits" of gravity with underground SAGD as well as over a 90% reduction in the surface footprint of a similar surface based project. "You have a more efficient process, higher recovery factors with a lot less impact on the environment," said Squires.

The company says its claim to a lower steam-to-oil requirement for its underground process has been verified at a government-funded underground test facility near Fort McMurray, where underground thermal wells were safely operated for over ten years starting in 1985.

More information is available from Andrew Squires at OSUM, 403/270-4755.

OSUM made its statement in response to an incident in which environmental groups disrupted a presentation by Alberta Premier Ed Stelmach to the Empire Club of Canada in Toronto. Stelmach was interrupted by protesters while he was describing Alberta's GHG reduction strategy, which calls for a 12% cut in emissions by next year by the province's largest emitters. Environmentalists have criticized the plan because it calculates targets on a per-barrel-produced basis, and because it allows companies to buy credits from an innovation and technology fund if they cannot meet reduction targets.

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