Replacing Natural Gas in Alberta’s Oil Sands: Trade-Offs Associated with Alternative Fossil Fuels

Abstract

Concerns regarding resource availability and price volatility have prompted industries to consider replacing natural gas (NG) with an alternative fuel. The oil sands industry utilizes large amounts of NG for the production of steam, electricity, and hydrogen, and several "replacement fuels" are currently being considered. A life cycle framework is developed and applied to two generic oil sands projects as a case study (mining with upgrading and in situ with upgrading) to examine the energy, greenhouse gas, and financial implications of replacing NG with four fossil fuels: asphaltenes, coke, bitumen, and coal. Key trade-offs are identified among the fuels, as well as those associated with applying carbon capture and storage (CCS) to the systems. The analysis indicates that there is no vector dominant alternative to NG among the fuels investigated, although asphaltenes appear to offer the most potential. The analysis confirms that CCS can reduce life cycle emissions to 25% of those of current systems but will not be implemented for oil sands energy systems without a financial incentive or regulatory requirement. Under the analysis' base conditions, the CO 2 avoidance cost is $66/tonne CO 2 equivalent and $87/tonne for the mining and in situ asphaltenes cases, respectively. However, the impact of compounding uncertainties is demonstrated and shown to be critical for appropriate interpretation.

Identifying the causes of oil sands coke leachate toxicity to aquatic invertebrates

“…Nevertheless, use of coke as an alternative fuel source is presently precluded by high transportation costs and the availability of cheaper energy sources such as coal 3. In addition, high sulfur content (6–8% wt), low combustibility 4, high metal content, low volatile fractions 8, and increased greenhouse‐gas emissions compared with natural gas 9 currently make coke an undesirable alternative source of energy. As a result, Syncrude has accumulated an estimated 40 million tons of coke in their on‐site inventory 7.…”

Industrial innovation and infrastructure as drivers of change in the Canadian boreal zone1

“…Currently, there have been advances to reduce the overall steam to oil ratio and improve bitumen recovery given the high value of natural gas and the high rate of greenhouse gas emissions associated with steam generation (Gosselin et al 2010). The use of alternative fuels, such as petroleum coke and bitumen residues (e.g., rejected asphaltenes), provides power for operating plants and heat for in-situ bitumen recovery, along with producing a point source of CO 2 for capture and storage (McKellar et al 2010;Gosselin et al 2010). Recently, there have been advances in integrated operations incorporating removal of asphaltenes from bitumen, thermal cracking, gasification, and generation of high-quality synthetic crude oil (Opti-Nexen steam-assisted gravity drainage) as well as steam replacements and reductions using light hydrocarbons and steam-solvent co-injection to reduce bitumen viscosity during production (Gosselin et al 2010).…”

General optimization model for the energy planning of industries including renewable energy: A case study on oil sands

“…The renewable energy (i.e., wind, biomass, and geothermal) production technologies considered were selected based on an evaluation of Alberta's renewable energy potential . The supply technologies’ techno‐economic data, as well as factors required for the implementation of these technologies (e.g., fuel prices) are presented in the Appendix . The model is solve using the CPLEX solver in the General Algebraic Modeling System (GAMS) …”

“…These alternative fuels have variable properties (e.g., carbon content, energy density, cost, etc.) and, therefore, they have different life cycle effects . Other studies considered reducing the consumption of natural gas by improving the efficiency of energy production, for example, through increasing the capacity of combined heat and power generation instead of the currently utilized standalone systems .…”

“…They only considered fossil fuel‐based (natural gas and coal) and standalone energy production technologies. However, there have been various studies proposing the possibility of including less carbon intensive technologies in the oil sands energy infrastructure, such as nuclear energy, renewable energy (i.e., wind, bioenergy, and geothermal), and cogeneration (power, heat, and hydrogen) energy systems . Moreover, the mathematical models proposed in these studies adopt a deterministic snapshot approach, in which the operations of oil sands are investigated only for a given point in time without considering the variability of parameters over a long‐term planning horizon that would lead to a phased infrastructure development.…”