A Greener Way to Get Bitumen?

Late last March, an Alberta engineer appeared before a House Subcommittee on Energy and Power in Washington, D.C.

Dressed in a black suit fitted to his narrow frame and speaking in a soft, careful tone, John Nenniger, CEO of Calgary-based technology firm N-Solv Corp., read closely from a prepared statement, making darting glances now and then towards the front of the room.

"As a scientist," he told the subcommittee, which was focused that day on Canada's oil sands, "I view extravagant claims with great skepticism, unless they can be supported with compelling evidence."

The lawmakers listening might have felt a little skepticism of their own: Nenniger had just finished making some pretty extravagant claims himself.

N-Solv's proprietary technology, the Canadian claimed, could dramatically reduce the energy needed to produce bitumen from oil sands, slashing emissions of greenhouse gasses by 85 per cent. It could do this without using any water. And it could potentially make oil sands production twice as profitable.

Nenniger's "compelling evidence" came from years of lab tests which suggest that solvents such as propane or butane can melt and recover underground bitumen deposits much more efficiently than the prevailing method of high-pressure injections of super-hot steam.

Still, Nenniger's claims will remain unproven at least until April 2013, when a $60-million field test near Fort McMurray is scheduled to produce its first oil.

Meanwhile there's a deeper tension straining Nenniger's project -- and any other attempt to "green" the oil sands.

That is this: even if the entire industry became fully carbon neutral, so that its recovery of petroleum from buried bitumen released not a single additional molecule of carbon to the atmosphere, its products --gasoline, diesel, jet fuel -- would continue to do so the moment they were burned.

So: is it worth cleaning up a sector that strengthens our dependence on the very same fossil fuels that created our global warming crisis?

Nenniger thinks it is. The "most pragmatic" way to address the "profound moral dilemma" of climate change, he told his Washington audience, is "finding profitable ways to produce cleaner oil."

That appears to be the thinking of the Alberta government as well. During her recent election campaign Premier Alison Redford pledged $3 billion over the next 20 years to help stimulate oil sands innovation.

But others I heard from contested such a "harm reduction" approach as nonsensical, a waste of precious time and resources.   

The debate gets little media attention, but its implications are felt widely, from affecting Canada's prospects for making real reductions in our climate footprint, to offering insight into what environmentalists hope to achieve from picking the battles they do.

A 'revolution' over decades

Within the oil sands industry, technologies like the one Nenniger promises are known as "revolutionary": long-term bets on new ideas that could, one day, completely change the way bitumen is produced.

Given the intense international scrutiny of oil sands emissions, and the potential to vastly increase profits, you might think bitumen producers would be lining up outside Nenniger's Calgary office.

But revolutionary innovation by its nature disrupts existing technology. In the oil sands, that could mean risking multi-billion-dollar investments in projects expected to operate with their original design technology for three decades or longer.

"You just can't jump from the lab bench" to operating scale, Syncrude executive Eric Newell once told The Globe and Mail. "We've been burned too many times… You have to have a very disciplined approach to how you bring new technology on."

That's not to say revolutionary transitions can't happen. They can and do.

Most commonly cited is the ongoing shift from traditional oil sands strip-mining operations to "in situ" operations. But even the switch from giant holes in the ground to melting buried bitumen with injections of high pressure steam took more than 20 years from its first field pilot test (the stage Nenniger hopes to reach next year) to wide-scale adoption.

Easier to embrace, said Jackie Forrest, global oil senior director for the U.S.-based energy consultancy IHS-CERA, are "evolutionary" innovations; stuff that can be "bolted onto existing infrastructure."

Tweaking the footprint

A good example is Cenovus, which has some of the most efficient operations in the entire industry, and made the striking announcement last October that its oil was "green" enough to meet California's contentious low-carbon fuel standard.

The company is now running experiments that tweak existing in-situ technology. At its Christina Lake operation, Cenovus adds small volumes of butane to the steam injection process, reducing the amount of energy -- and therefore emissions -- needed to produce a barrel of oil.

By 2016, when the company's 130,000 barrel-per-day Narrows Lake operation is up and running, if all goes to plan, that innovation will improve its overall energy efficiency by about 15 per cent.

The Canadian Association of Petroleum Producers (CAPP), which declined to be interviewed for this series, celebrates such technological triumphs. It often brags that its members cut the amount of greenhouse gas released in producing a barrel of bitumen (the product's carbon "intensity") by 29 per cent between 1990 and 2009.

It more rarely points out that overall oil sands emissions grew by 148 per cent during the same period, due to massive increases in production.

There are other reasons as well to be suspect of CAPP's narrative of seamless and endless incremental improvement. The Calgary-based industry group announced last December that a decade's worth of emissions progress in the oil sands had actually reversed. Oil sands greenhouse gas intensity grew two per cent between 2009 and 2010. Overall emissions went up as well, by 14 per cent.

This is mostly a function, CAPP explained, of the industry's ongoing embrace of in-situ technology. As is often the case with human ingenuity, today's solution becomes tomorrow's problem.

In-situ bitumen recovery has nowhere near mining's impact on ravaged boreal forests. But heating all that water into steam requires vast amounts of natural gas, releasing far more greenhouse emissions.

Last year, Alberta's in situ operations alone emitted an estimated 19 megatons of CO2, equivalent to the annual climate impact of 3.7 million cars.

That number will almost certainly rise: an estimated 80 per cent of remaining bitumen reserves are accessible only by the higher-emission process.

Hitting an efficiency limit

What's more, industry leaders such as Cenovus admit there's only so much they can do to improve technology's performance.

Technical innovation can improve an operator's energy efficiency, or "steam-to-oil ratio" by about 20 to 40 per cent for any given bitumen deposit, Jon Mitchell, Cenovus team lead for environment policy and strategy, told Tyee Solutions.

But, he added, "The reservoir is a primary driver." That is, the quality of bitumen reserves being tapped largely determines how much energy it takes to extract.

And that could mean an uphill fight for oil sands producers in coming decades just to maintain the greenhouse gas progress they've achieved so far.  

Why? Because, "first generation oil sands projects selected the very best parts of the oil sands deposit," as a 2010 report from IHS-CERA, the respected energy consultancy, explained. "A general future trend toward lower-quality reservoirs is expected."

Even if that trend doesn't materialize, there are limits to how "green" the oil sands might get.

That same IHS-CERA report modeled an "aggressive technology scenario" to 2035, one in which governments set a carbon price of at least $100 per ton (compared to Alberta's current $15); and production levels off at 3.1 million barrels per day (about double today's output).

That scenario would see more than half of Alberta's oil upgraders fitted with carbon capture and storage technology. Small nuclear plants begin to replace greenhouse gas-emitting natural gas boilers. Cenovus-type steam innovations and other "revolutionary" technologies become widespread among in situ operators. Mining operations boost their efficiency by 10 per cent.  

All of this combined, in IHS-CERA's scenario, would help reduce the industry's carbon intensity by nearly one-third, an impressive achievement by any standard.

Clean to make, still dirty to use

Yet oil sands bitumen produced in 2035 would still be 36 per cent worse for the climate than conventional crude oil, the report suggested.  

"There is no doubt we must clean up many aspects of oil sands production," wrote David Keith, an internationally renowned climate expert who teaches at Harvard and the University of Calgary, in a co-authored paper back in 2010. "But that does not mean we should put all our emissions-cutting chips on the oil sands."

Keith's reasoning is simple: no matter how cleanly gasoline, diesel or jet fuel is produced, 60 to 80 per cent of its carbon footprint comes from burning it in a combustion engine.

For all the media attention, political will and public money devoted to the oil sands, he argues, in the absolute best case scenario, a completely carbon-neutral bitumen production industry would reduce the lifetime footprint of the fossil fuels it produced by only 30 per cent.

Such thinking puts Keith at odds with the Alberta and federal governments. Together they have promised more than $1.7 billion for oil sands-related carbon capture and storage technology, among other initiatives to "green" bitumen production.

That approach, Keith charges, "doesn't make much sense." The oil sands are such a specialized, regional sector, he reasons, that any game-changing innovation to make them cleaner would have limited application outside Alberta.

"If you want to decarbonize the transportation sector," Keith told the Tyee Solutions Society in an interview, "squeezing emissions from upstream oil and gas is not going to be very successful. That pathway doesn't lead to significant reductions or transition" to a low-carbon economy.

Tactical targeting

But if bitumen's carbon footprint is unlikely to be easily trimmed or decisive to the climate, why then do environmental groups focus so intensely on it? The answer may lie in the difference between strategy and tactics.

Pretty much all major environmental groups—as well as many oil sands firms -- agree publically or privately that an economy-wide price on greenhouse gas emissions would be the most effective way to fight climate change. But the current political atmosphere in North America makes it hard to advocate for such a sweeping policy.

Instead, environmentalists sustain attention to climate change by focusing the public on visible symbols of our fossil fuel addiction. And few are more potent than northern Alberta's toxic moonscapes, oil drenched ducks, rapidly growing greenhouse gas emissions, and its vulnerable pipelines stretching across America's heartland.

"We've already seen that 'pricing carbon' doesn't exactly get people into the streets," argued David Roberts, staff writer for the progressive U.S. news website Grist.org. "To find the stories/conflicts that get people fired up, activists have to come closer to home."

Little could strike closer to home for much of middle America than TransCanada Corp.'s proposed Keystone XL pipeline from Alberta's oil sands to the Texas Gulf Coast.

Some see no coincidence in the fact that the project, evocatively described as a "fuse to the biggest carbon bomb on the continent" by its critics, exploded into the U.S. news cycle shortly after Congress abandoned cap and trade legislation in mid-2010.

"The reason that Keystone got so much attention is not because that particular pipeline is a make-or-break issue for climate change," President Barack Obama said in a recent Rolling Stone interview, "but because those who have looked at the science of climate change are scared and concerned about a general lack of sufficient movement to deal with the problem."

N-Solv Corp's John Nenniger shares those climate change fears. "Terrifying," is his word for them.

Yet he's an engineer by vocation and temperament, and approaches problems accordingly. When Nenniger looks at the oil sands, he sees a large and growing source of emissions that the right technology could sharply limit.

"As a society," he told Tyee Solutions, "we need two arrows in our quiver."

Modern civilization, he agrees, desperately needs to temper its addiction to fossil fuels to have a fighting chance of stopping global warming. The other arrow, Nenniger insists, "is a cleaner supply of hydrocarbons."

Tomorrow: Stick that carbon back in the ground? The high price and distant hope for carbon sequestration. Find the entire series to date here.