A huge investment in a unique product paves the way for environmentally friendly oilsands extraction
Fifteen years after discovering a unique product to extract petroleum from oilsands, US Oil Sands is finally using it in Utah.
The Calgary-based company first looked at using its technology in Canada, but the majority of oilsands areas were already under development. The U.S. government, however, was eager to find companies to set up operations in Utah and get to work extracting oil from the state’s large oilsands deposits.
“They were keen on getting us in there,” says US Oil Sands CEO Cam Thomas. “It’s taken a lot of work, but now we’re set to go.”
A lot of work and a lot of investment. The company spent nearly $100 million to acquire rights to about 50 square miles in Uintah and Grand counties, obtain permits and develop its technology, which uses an orange-peel extract that’s similar to what’s in household soaps and detergents, Thomas says. “It smells a little bit like Mr. Clean,” he says.
The technology is unique since other extraction methods don’t work, or don’t work as well, with oilsands. “It’s very different from shale oil. It’s a heavy, viscous oil and all you need to do is make it less viscous,” Thomas says. “It’s like molasses. We just need to heat it up so it flows more evenly.”
The oil also sticks stubbornly to the sand around it, so the company then uses hot water and its specialized solvent to “wash” the sand from the oil. When done, the sand is clean and the oil is ready to be sent to a refinery.
Thomas calls the process environmentally friendly and points out that the water being used is recycled and the heat created during the process is also recovered.
“There’s no discharge of water,” he says.
Here’s a quick look at how US Oil Sands’ process works:
- The ore from the mine is milled and then mixed in a large rotating drum with hot water and the specialty solvent. From there, the solvent readily mixes and dissolves into the bitumen while heat from the water reduces the mixture’s viscosity. The mixture of dilute bitumen, water and solids feeds into the primary separation vessels and is divided into hydrocarbons (water and fine solids) and clean, coarse solids and water. After less than 30 minutes, the two phases are ready for final polishing to remove the small amounts of mixed components.
- The coarse solids are dewatered using conventional equipment, leaving the sand damp. While that’s happening, the diluted bitumen is processed to sales specifications, which separates the remaining fine soils and water. The diluted bitumen then moves through a single-stage distillation process to remove the bio-solvent, which is then recycled. The hot, undiluted bitumen is stored and later delivered to refineries while the fine solids are commingled with the damp sand and taken back to the mine for immediate reclamation.
- When complete, 98 percent of the solvent is immediately recycled and reused and 95 percent of the water is recycled and reused in the process, Thomas says.
Thomas says US Oil Sands is also doing what it can to make the footprint for its operation as small as possible. The company plans to move sand back into the mine as it goes so “the hole on the surface will only be as big as the original hole. It won’t ever get bigger. We are using best practices and doing instant reclamation.”
The company also won’t use tailings ponds, an engineered dam and dike system used as a storage container for water, sand, oil and clay left over from oilsands production. Tailings ponds are a common sight in Canadian oilsands production.
“The solvent we use is biodegradable,” Thomas says. “This is about as green as you can get in energy production.”
Spending $100 million on developing new technology and a new site is a bit risky with today’s low oil prices, but Thomas is optimistic. He says US Oil Sands’ process is very efficient, which drives down production cost.
“It costs about 75 percent less, and with oil prices where they are now we will just break even, but as oil prices go up, we’ll do even better,” he says.
Construction is complete and production should begin by the end of the year. Thomas says 90 percent of the oil on the site is recoverable. As investment in the project increases, production could be expanded, he adds.
“We expect to produce 2,000 barrels a day at the start and there’s enough there to keep us going for 100 years,” he says. “We’ve been welcomed by the local community since this is bringing jobs and resources to the area. It’s been a thrilling process.”
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