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Electric Horizons: New Technology Will Make the Oilsands Cleaner and Richer

By Robert Owen
April 11th, 2012
email: joel@vantagewire.com
http://www.vantagewire.com

The extraction of bitumen from Alberta’s oilsands is so massive as to be visible from space. The resulting images fuel protests and line the pockets of environmental groups. But new technology is about to transform the industry, making extraction cleaner, more efficient and far less intrusive.

Oilsands recovery was first accomplished by open-pit mining. Then rising oil prices enabled the introduction of steam-assisted gravity drainage (SAGD). Coming next is electric multiphase heating.

Two companies are developing this technology. In 2005, E-T Energy began testing their version of Electrothermal Dynamic Stripping or ET-DSP. This involves drilling up to four vertical well bores into which elements are introduced in order to pass electricity through the water surrounding the bitumen in the reservoir, lowering the viscosity. A gathering well is then drilled in the centre of the four electric elements to enable production.

Since no steam is required, the process requires far less water than SAGD, and with multiple shallow wells replacing the act of massive stripping required for open-pit mining, its advantages are self-evident.

A proof-of-concept pilot for the ET-DSP method was launched in 2007 near Fort McMurray. It recovered 2,500 barrels of bitumen and demonstrated its viability. The company is now moving toward pre-commercial production and is being supported by the Alberta government (through its carbon reduction initiative).

E-T has agreed to partner with French oil and gas giant Total SA (NYSE:TOT), which will provide financial support and technical input over the next two steps of testing. The agreement gives Total the option to purchase a non-exclusive license to apply the technology and/or buy a limited working interest in E-T’s first commercial development. Still privately held, E-T’s latest presentation hints at an IPO later this year.

Meanwhile, Sunridge Energy (SRG:CA) of Calgary has an exclusive agreement with Current Environmental Solutions (CES), an American hydrocarbon contamination site recovery company, to employ its proprietary method, 6-Phase Oil Heating Hexagonal Horizontal Bundle (6POH HHB). Though similar to the E-T method, the Sunridge version employs additional heating elements believed to provide enhanced temperature control. More important, Sunridge is going horizontal.

“Originally our plan was to drill vertically, the way that E-T Energy has done but instead with the hexagonal 6-sided pattern that CES has already used so successfully in their hydrocarbon cleanup and recovery efforts,” Sunridge chief geologist Lorne Hill reports.

Hill explains, “Now we’ve changed direction a bit, with a new horizontal strategy, based on the fact that a vertical process, even at shallow depths, would require far too many well bores in a geographic area.”

Hill’s trust in his CES partners goes back to the 1980s, when he and their founders studied together at Princeton’s geological engineering department. Since then, he’s observed their triumphs over logistical challenges. A pertinent example: CES was once hired to remediate a contamination site at New York’s JFK Airport, the 17th busiest airport in the world. Disturbing traffic was out of the question, so CES drilled horizontally under runway traffic and safely extracted the hydrocarbons buried under the concrete.

Today, Hill and his Sunridge team are utilizing the JFK model for their redesigns. By drilling horizontally, the electrodes of the 6POH HHB will have a much-increased contact.

“If you have a 30-metre thick reservoir or pay zone, and you drill vertically, you’re only heating a 30-metre thick oil column,” Hill says. “Horizontally, we can go 600 metres, right across large swaths of land, increasing exposure to the sand face for production of the well by twenty fold. This would let us develop 160 acres [a quarter-section], one phase at a time.”

Sunridge and E-T’s new processes will not only dramatically reduce oilsands footprints, which will be good for the environment, they will also provide added value in the zones that they can target. Both SAGD and open-pit production require specific depths. Due to the need of a solid capstone that can withstand the added pressure of the steam, SAGD requires a target to be between 100 metres and 225 metres vertically. And since land is being stripped away, creating sizeable canyons as a result, open-pit mines require targets no deeper than 75 metres. This leaves an intermediary zone that has so far been unrecoverable.

Hill says, “I call these targets ‘stranded reserves.’ They’re too deep to mine and too shallow for SAGD. We believe that using electricity is the only way to get these reserves out.”

Even for the majors, a breakthrough in capturing these stranded reserves would be a bonanza, as they are estimated to hold about 200 billion barrels of oil. In particular, the bitumen contained within 50 metres to 150 metres represents about 60% of the Athabasca Oilsands. While E-T is partnered with Total, Sunridge seeks to secure its own oilsands land package on which to employ its advanced technology, the results of which would constitute a profitable demonstration of its utility.

“I’m sure the phones will be ringing, once we prove this works,” Hill says. “I guarantee that if we get the land we’re targeting, the big players we’ll be neighbours with will be keeping a very close eye on what we’ll be doing. It’ll understandably be very high profile.”

By Robert Owen
April 11th, 2012
email: joel@vantagewire.com
http://www.vantagewire.com

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