In its most basic form it resembles an unremarkable pile of dark sticky sand. But if you tighten your fist around a handful, it literally drips oil.
Found only in an obscure corner of Northeastern Alberta, its called the Athabasca oil sands and it may provide another viable North American energy source.
There are more reserves in oil sands in Alberta than in conventional oil in Saudi Arabia. That sounds incredible but experts agree its true.
The sheer potential and volume of oil sands have captured the attention of several oil companies that are spending billions of dollars to mine, extract and refine it for use in North America. Spurred by the U.S. energy crunch, officials are showing interest.
Processing to convert the gritty dirt into burnable crude oil is costly and complicated. But a major construction effort now underway by an international oil company, Suncor Energy, will set the new standard for improving processing and bringing it closer to cost efficiency.
Called Project Millennium, the processing facility has relied heavily on the skills of IBEW members. More than 1,600 members are an integral part of the multi-billion dollar, multi-year project to mine more crude from the sand. Most are from Local 424, but the massive project also includes a few hundred travelers. Among other duties, they are laying 2.6 million meters of electrical cable for power, lighting and control, checking more than 10,300 instrument loops, installing 585,500 feet of electric heat trace and making more than 260,000 electrical connections. The project, whose peak work force will swell to 5,900, is a joint construction venture of Fluor Constructors Canada and Bechtel Canada.
Previously produced at up to $20 Canadian per barrel, the new system will bring the cost of refining oil sands to $12.50 Canadian, although as every consumer knows, oil prices are subject to regular and sometimes wild flucatuations. The going international market price, or the cost to purchase crude, is approximately $35 Canadian per barrel. That profit margin explains the keen interest in companies like Suncor to develop oil sands projects.
By the time the Project Millennium is completed, Suncor expects to produce 225,000 barrels of oil per day by 2002, more than doubling its 1999 production.
And there is more where that came from. According to geological surveys, Canada is estimated to contain more than 300 billion barrels of oil sand deposits.
Suncors Millennium Project expands the existing Steepback Mine and improves the extraction and upgrading plants. A new hydro-transport pipeline will combine water with the oil sands to expedite the movement of the raw material to the processing facilities, replacing the old conveyor belt system. The project also targets measured reductions in carbon dioxide, nitrous oxides and sulphur dioxide emissions.
The extraction processseparating the raw oil from the sandwill benefit from the addition of a new plant and a streamlined process. Upgradingthe final step in the processwill be aided by the introduction of new technology to lower emissions, reduce energy demand and increase water reuse and recycling.
The oil is shipped to customers and refineries throughout Canada and the United States for use as vehicle gasoline and transportation and heating fuels, including kerosene and diesel.
From a prohibitively high per-barrel cost of 25 years ago, producers have been constantly reducing the cost and increasing the economic viability of refining oil sands. Technological advancement, more efficient management and plant expansion have brought the price down, said an official on the project.
The oil sands industry is by far the biggest employer in Fort McMurray, Alberta, approximately 300 miles north of Edmonton. The city is surrounded by the Boreal Forest and is known as the meeting place of many waters as four large rivers converge in the area.
The oil sands mined in the area supply at least 20 percent of Canadas oil needs. As North America seeks to curb dependence on Middle East oil, the oil sands have recently received unprecedented attention south of the border.
Based in Calgary, Alberta, Suncor was the first to mine oil sands in Fort McMurray in 1967. Another company, Syncrude, partly owned by Esso, has operated a mine there since the late 1970s. But the field is getting crowded. A venture by Shell Canada and Chevron Canada plans to become the third commercial plant in the area. And others, including PanCanadian Resources and Petro-Canada, are lining up.
The huge investments seem to be paying off. While the companies pour money to streamline oil sands development, they are experiencing record profits, both last year and the first quarter of 2001, according to Alberta newspaper reports.
Hydro transport system piping car
August 2001 IBEW Journal