Engineering & Mining Journal

AUG 2017

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OIL SANDS 30 E&MJ • AUGUST 2017 cesses have spanned more than eight years for the Keystone XL pipeline; more than six years for Northern Gateway; more than four years for the Alberta Clipper Expansion; more than three years for the Trans Mountain Expansion; and two years for Energy East, which is still in the early days. This does not include the time prior to application for business development and for front-end engineer- ing and design." The report sounded a more optimis- tic note when its authors stated that "Western Canada has the potential to move from a pipeline capacity shortfall to surplus. If all pipelines advance as an- nounced, nearly 2.9 million bbl/d of new takeaway capacity could be added — suf- ficient to meet growing Canadian supply for some time." However, there is also a note of cau- tion: "Although there is a new sense of pipeline optimism, none of the proposed projects is a done deal," they warned. "Pipeline projects remain controversial and will likely face ongoing challenges from opposition and litigation." The alternative to pipelines, trans- porting crude oil by rail, reached a peak in 2014, the report noted, since when volumes have reduced. In some cases, operators have managed to move more Canadian crude through existing pipe- lines, an opportunity helped by a fall in conventional crude output while oil sands crude production continues to increase. In addition, operators have been able to increase throughput by using drag-reduc- ing agents that can increase the flow of crude through a pipeline, for example. Nonetheless, the report noted, "West- ern Canadian volumes continue to build, and the pipeline system is expected to become increasingly constrained. Toward the end of 2016, U.S. crude oil imports from Canada exceeded 3.5 million bbl/d — the highest on record. "Despite the optimism, there is no guarantee that these projects and other expansions will advance as proposed," the report concluded. "Only time will tell whether the pipelines continue to meet delay or if the necessity of new infrastruc- ture for western Canadian oil producers is realized." In July, Emissions Reduction Alberta (ERA) announced the availability of C$50 million in funding for technologies to help the oil sands industry to meet its greenhouse gas emissions limit by 2030. Applications for funding through the organization's Oil Sands Innovation Challenge have a deadline of early September for submission. "ERA knows that improving both environmental and cost competitiveness is key to the continued success of Alberta's energy sector," said ERA's CEO Steve MacDonald. "We have worked with our industry partners to identify the gaps that tech- nology can close, and developed this funding opportunity to help accelerate the demonstration, scale-up and deployment of the most promising solutions." "Oil sands innovation was crucial in the past and remains key to Alberta's economic future," said Shannon Phillips, minister of environment and parks and the minister responsible for the Climate Change Office. "Improvements in technology and effi- ciency will lead to made-in-Alberta solutions and set Alberta up for a healthy, prosperous future." "Albertans were the ones who determined how to get the oil out of the sand and made-in-Alberta innovation is going to get the carbon out of the barrel," said Margaret McCuaig-Boyd, Alberta minister of energy. "This is a timely investment that will pay huge dividends in strengthening our province's position as a leader in responsible energy development." According to ERA, the focus of the Oil Sands Innovation Challenge is on breakthrough technologies for surface mining as well as in-situ operations that are now ready to go to a field pilot, demonstration or first-of-its-kind deployment. The intent is to reduce both greenhouse gases and costs by investing in op- portunities — including alternative steam generation methods, advanced reservoir production technologies and novel surface mining processes. ERA, which receives grant funding from the Alberta govern- ment, will leverage its C$50 million in funding. Industry and other partners will be required to at least match this commit- ment, creating the opportunity for more than C$100 million in combined new investment. Funding for Greenhouse Gas Emissions-reduction Projects Construction under way on one of Fort Hills' three secondary extraction plants. The first is scheduled to come on stream late this year, with the other two following in the first half of 2018. Project operator Suncor has increased nameplate capacity at Fort Hills to 194,000 bbl/d.

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