Canada Country Report 2014

Technological innovation unlocks promise of resource

PUBLISHED : Monday, 24 February, 2014, 4:07pm
UPDATED : Monday, 24 February, 2014, 4:09pm
 

With its strong focus on innovation and technology, Cenovus Energy has been a pioneer in Canada's in-situ oil sands industry. "In situ" is Latin for "in place". Instead of using trucks and excavators to mine the country's vast oil sands deposits, in-situ producers use advanced drilling methods to recover oil from deep underground. Cenovus was the first in the industry to commercialise steam-assisted gravity drainage (SAGD) in 2001, which has become the dominant form of oil sands drilling technology.

Since its origins in the late 1970s, SAGD has become a game-changer. By combining hi-tech drilling and steam injection, SAGD accounts for about half of Canada's oil sands production. Eventually, this type of technology will be responsible for about 80 per cent of the oil that flows from the oil sands.

The oil sands are known to contain about 173 billion barrels of oil recoverable using existing technology, but that's just the tip of the iceberg.

"It's estimated that today's techniques will capture about 10 per cent of the original oil in place in the oil sands," says Brian Ferguson, president and CEO of Cenovus. "That means there's still a 90 per cent opportunity. As the industry develops new and better technologies, we expect to unlock billions more barrels of oil reserves in the future."

Cenovus has more than 100 technology development projects on the go at any given time, three quarters of which could have an environmental benefit while also improving the company's efficiency at producing oil.

One innovation the company has been pioneering is a solvent-aided process (SAP). This involves using butane to help dissolve the thick oil underground. By injecting butane along with steam, Cenovus believes it can decrease the amount of steam needed to produce a barrel of oil by 25 per cent, while improving production by up to 30 per cent. Because steam is expensive to produce, this lowers costs and helps reduce greenhouse gas emissions. Cenovus plans to apply SAP commercially at its Narrows Lake project, which is under construction.

Cenovus engineers have also adapted flue gas recirculation, a technology used in the automotive industry, to help reduce air pollutants such as nitrogen oxides (NOx). By rerouting exhaust from its giant steam generators back into the 250-million British thermal unit boilers, the company has been able to cut NOx emissions in half during test trials. It is now rolling out flue gas recirculation on a commercial basis.

To reduce the amount of water required to make steam, the company has also developed the blowdown boiler. A typical boiler turns about 80 per cent of its feedwater into steam. By running the leftover water, known as blowdown water, through a secondary boiler, Cenovus has been able to bump this ratio to more than 90 per cent. It is planning to roll out this patented technology at many of its new projects.

"Continuing investment in these technologies helps keep us among the lowest-cost oil producers in the world, and we've been able to do that in a manner that is respectful of the environment," Ferguson says.

Cenovus is also sharing some of its innovations with its competitors through Canada's Oil Sands Innovation Alliance (COSIA). Formed in March 2012, COSIA is an unprecedented collaboration of major oil sands producers working together to reduce the oil sands' environmental impact.

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