Fighting oil sands emissions by burning natural gas?


in Canada, Economics, Science, The environment

According to Morgan Downey’s Oil 101, it actually takes more energy to produce a barrel of synthetic crude oil from the oil sands than the barrel of crude contains. Most of that extra energy comes from natural gas. It is worth paying that energy cost because crude oil is a valuable product that can be turned into gasoline, kerosene, etc, whereas unprocessed bitumen laden sand has no value. Note that even more energy is required to run the refineries that turn synthetic crude into usable fuels.

As a result of this, the economic viability of the oil sands depends on natural gas remaining cheap enough for synthetic crude to compete. As such, it is arguably the case the promoting natural gas as a fuel for vehicles and electricity generation is a smart climatic move. It is a relatively clean fuel in those applications, and using it in that way might keep a larger share of it from being used to upgrade bitumen – thus leaving the carbon contained therein safely buried.

In Scenario A (cheap gas), a lot of Canada’s northern natural gas goes towards liquefying and upgrading bitumen, thus liberating the carbon it contains into the atmosphere, both during upgrading and refining processes and when the resultant fuels are burned.

In Scenario B (expensive gas), the natural gas is used for higher-value purposes like electricity generation, and more of the carbon in the bitumen never ends up in the atmosphere. Other forms of environmental damage associated with the oil sands – including air and water pollution, habitat destruction, etc – are also lessened.

{ 3 comments… read them below or add one }

Milan November 4, 2009 at 1:47 pm

An extension of this is that it makes sense to avoid gas pipelines that can only serve the oil sands. Gas in such pipelines has only one potential customer, and thus a higher chance of a low price.

R.K. November 4, 2009 at 2:27 pm

If natural gas becomes unavailable or much more expensive, there will be more of a push for using nuclear power to generate steam for in-situ extraction, as well as heat for upgrading.

Milan November 4, 2009 at 2:36 pm

From a climatic standpoint, there are a range of possible outcomes, running from best to worst:

  1. Neither natural gas nor the oil sands are extracted and burned.
  2. Natural gas is extracted and burned, while the oil sands are not.
  3. Natural gas is extracted and burned for things like electricity and transport, while nuclear power is used to upgrade oilsands.
  4. Natural gas is used to upgrade oilsands.

To me, (2) and (4) seem the most plausible. Nuclear power is expensive and controversial stuff, and oil sands companies already have very high capital costs and public relations difficulties already.

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