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OIL SANDS lion-barrel bitumen resource. Highly viscous, the bitumen represents the residual heavy hydrocarbon fraction of an original crude from which the lighter fractions have been lost through post-formation bacterial digestion. In total, the resource is the thirdlargest oil source in the world, after those held by Saudi Arabia and Venezuela, with oil sands bitumen representing 98% of Canada's oil resources. Nine mining projects are currently operating, being developed or approved, plus more than 50 thermal in-situ production facilities. Even more operations produce heavy crude that is sufficiently fluid not to require heating for in-situ recovery in conventional wells. According to the U.S.-based energy consultancy, IHS CERA, mining currently accounts for slightly less than half of Alberta's oil sands oil production, with insitu thermal processes—steam-assisted gravity drainage (SAGD) and cyclic steam stimulation (CSS)—supplying a further 40%. The remainder comes from operations that use the CHOPS (cold heavy oil production with sand) technique on less viscous heavy oil resources. In-situ systems in general overtook mining as the principal source for the first time in 2012, and will continue to increase in importance. SAGD has only become a mainstream technology since the early 2000s, and is projected to account for 45% of the total output by 2030. Large-diameter pipelines transport SCO and dilbit to U.S. refineries. (Photo courtesy of Enbridge) Keystone XL Operated by TransCanada Corp., the 36-in.diameter Keystone pipeline carries synthetic crude and dilbit from Alberta to refineries in the U.S. Commissioned in 2010, the 3,460-km-long Phase 1 pipeline runs from Hardisty, Alberta, to Steele City, Nebraska, and then to Patoka, Illinois. Phase 2, opened the following year, extended the pipeline from Steele City to Cushing, Oklahoma, with work currently under way to complete Phase 3, the Gulf Coast pipeline. Commissioning is scheduled for later this year, providing access for Canadian synthetic crude to Nederland, Texas, and from there on to refineries in Houston. However, the Keystone project will remain incomplete until U.S. presidential approval is received for Phase 4, Keystone XL. Planned to run from Hardisty on a more direct route through southern Alberta, Montana, South Dakota and Nebraska to Steele City, this will increase capacity on the Keystone network by 830,000 bbl/d to 1.2 Mbbl/d. According to TransCanada, "The pipeline is a critical infrastructure project for the energy security of the United States and for strengthening the American economy." In addition to handling Canadian crude, Keystone XL will take oil from the newly developed Bakken Formation fields in Montana and North Dakota. TransCanada stated that the new pipeline will reduce U.S. dependence on imports from Venezuela and Saudi Arabia by some 40%. Left: Alberta's oil sands resource. Right: Current and approved surface mining projects. (Images courtesy of the Alberta government) www.e-mj.com AUGUST 2013 • E&MJ; 29