• 7 hours Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 8 hours Oil Gains Spur Growth In Canada’s Oil Cities
  • 9 hours China To Take 5% Of Rosneft’s Output In New Deal
  • 9 hours UAE Oil Giant Seeks Partnership For Possible IPO
  • 10 hours Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 11 hours VW Fails To Secure Critical Commodity For EVs
  • 12 hours Enbridge Pipeline Expansion Finally Approved
  • 13 hours Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 13 hours OPEC Oil Deal Compliance Falls To 86%
  • 1 day U.S. Oil Production To Increase in November As Rig Count Falls
  • 1 day Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 1 day Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 1 day EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 2 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 2 days Aramco Says No Plans To Shelve IPO
  • 4 days Trump Passes Iran Nuclear Deal Back to Congress
  • 4 days Texas Shutters More Coal-Fired Plants
  • 4 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 4 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 5 days Chevron Quits Australian Deepwater Oil Exploration
  • 5 days Europe Braces For End Of Iran Nuclear Deal
  • 5 days Renewable Energy Startup Powering Native American Protest Camp
  • 5 days Husky Energy Set To Restart Pipeline
  • 5 days Russia, Morocco Sign String Of Energy And Military Deals
  • 5 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 5 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 5 days India Needs Help To Boost Oil Production
  • 5 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 6 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 6 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 6 days District Judge Rules Dakota Access Can Continue Operating
  • 6 days Surprise Oil Inventory Build Shocks Markets
  • 6 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 6 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 6 days Chinese Teapots Create $5B JV To Compete With State Firms
  • 7 days Oil M&A Deals Set To Rise
  • 7 days South Sudan Tightens Oil Industry Security
  • 7 days Over 1 Million Bpd Remain Offline In Gulf Of Mexico
  • 7 days Turkmenistan To Spend $93-Billion On Oil And Gas Sector
  • 7 days Indian Hydrocarbon Projects Get $300 Billion Boost Over 10 Years
Alt Text

Canada’s Pipeline Industry Takes Another Hit

Canada’s struggling oil industry has…

Alt Text

Europe Stands Divided On Gazprom’s Nord Stream 2 Pipeline

Gazprom’s Nord Stream 2 megaproject…

Alt Text

Activist Investors Crack Down On Shale CEO Salaries

The current model shale drillers…

Former Exxon President On Mission To Clean Up Oil Sands

Former Exxon President On Mission To Clean Up Oil Sands

Canada has given oil sands a dirty reputation, but a breakthrough, commercially viable technology has caught the eye of a former Exxon Mobil president who is putting it to use to clean up Utah’s billions of barrels of oil sands.

Imagine extracting high-quality oil out of the estimated 32 billion barrels buried in Utah’s oil sands, without creating the toxic wastelands that have resulted from oil sands projects in Western Canada. And imagine doing it at a cost that can still turn a profit in today’s oil price slump.

That would be highly enticing to some of the large operators in the Uinta Basin, Utah’s emerging tight oil play. As shale production has soared across the country, operators have moved to Utah to try to coax oil and gas from shale rock in ways that have been done on such a large scale elsewhere. Major players such as EP Energy Corporation (NYSE:EPE) and Newfield Exploration Co. (NYSE:NFX) have significant exposure in Utah.

But Utah’s oil sands are suddenly attracting a lot more attention because of their vast potential. The poor environmental reputation and high cost has kept companies away up until now, but armed with a new, clean oil sands technology, there is even talk that Utah could shift its focus away from expensive shale. Related: Cameroon Ramping Up Oil Production As Prices Moving Down

Protecting the environment and still profiting from oil has long been a major challenge, particularly when it comes to dirty oil sands, but that could all change if a new technology designed specifically to extract these oil sands in the most environmentally friendly way possible proves successful.

For five decades, companies have been trying to replicate Alberta’s oil sands success in Utah, but without turning the state into a toxic wasteland. A former Exxon president of Arabian Gulf operations, Dr. R Gerald Bailey, is one of several to take up the challenge, where today he is CEO of a small oil services technology company called MCW Energy Group.

“It is really simple,” Dr. Bailey told Oilprice.com. “In the same way that soap washes grease from plates, with the grease adhering to the soap and pulling it off, so new technology in the form of an innovative solvent can pull the oil out of oil sands.” Oil sands are typically black and dirty looking. However, once washed with the solvent, the sand comes out 99.9 percent clean before it is returned to the Earth, according to Dr. Bailey. “If we throw it back on the Earth, it is no longer contaminated with oil and you can grow plants on it.”

This is not just about making oil, Dr. Bailey opines. It’s about remediation. “After the tragic Deepwater Horizon disaster, we could have gone over there and cleaned that beach up with this new technology.” The company is focusing on Utah, but sees future potential abroad in places like Russia, China, Afghanistan, the Dominican Republic, Namibia, Jordan and Trinidad. Related: Greenpeace Going All Out To Stop Shell Drilling In The Arctic

Other companies are working on similar technologies as environmental groups and governments turn increasingly hostile to dirty oil sands. Marathon Oil is developing a proprietary solvent technology, in which wet tailings are dried and deposited back into a mine site as back-fill. Imperial Oil (TSE: IMO), a Canadian oil company, is doing something similar.

The focus of any new oil extraction technology must be on the environment—both Canada’s toxic wastelands and the fallout from hydraulic fracturing have ensured that new technologies can no longer push full speed ahead towards profit while ignoring the longer-term consequences.

While shale producers are taking a nose-dive in this market, experts estimate that production using new solvent technologies in Utah can be more profitable than shale oil currently being produced, and more profitable than any other oil sands project in North America.

It costs about $55 per barrel to produce oil sands in Alberta. But independent research has shown that MCW Energy Group can produce oil from Utah oil sands at approximately $30 for clean oil sands.

From an environmental standpoint, it would seem that the goals are also being achieved. The process employed does not use any water, which is a significant selling point in the dry state of Utah, and produces no waste or pollutants, including no more tailing ponds. Related: Top 6 Most Powerful Women In Oil And Gas

Can it apply to Canada’s oil sands as well?

According to Dr. Bailey of MCW Energy, the Utah sands differ as they are oil-wet and not water-wet, and because they can simply be scooped up with a front loader and then processed with the solvent. The oil separates out and the clean sand is returned to the ground. In Canada, however, the sand must be mined because it is several hundred feet underground and requires extraction with steam and subsequent hot water, which becomes highly contaminated. “The huge acres of tailing ponds can be seen from space.”

But while it may seem a daunting task, the new technology can tackle even Alberta’s oil sands waste problem—after the process, according to Dr. Bailey, without using any water. “We would just use a de-watering process and then treat the raw sludge with our solvent.”

The much-maligned oil sands may yet have a viable future in a world increasingly concerned about the environment.

By Simon Harlow of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News