Is promise of Alberta's tar sands nearing reality

Alberta's far north shares a vital element with Saudi Arabia: Many hundreds of billions of barrels of oil. The Energy Resources and Conservation Board counts one trillion barrels, four to five times above Saudi Arabia's reserves. To date, though, it has not been economic to tap these reserves, which are in the form of tar sands. Now, however, a new process, proven at the pilot stage, finally may transform these resources into a possible competitor to OPEC. Its unpronounceable acronym, SAGD, stands for steam-assisted gravity drainage. The SAGD technique involves a couple of major innovations. First, it reverses the traditional approach. Instead of mining the sands from the surface downward, the systems developed and proven by the Alberta Oil Sands Technology and Research Authority (AOSTRA) starts from the bottom up. The oil is produced from underneath the bedded tar sands. Second, the system is intrinsically small scale. It does not rely upon megaprojects to try to realize economies of scale. The earlier surface-mining projects were sized at 100,000-200,000 barrels per day (b/d). In contrast, the optimum economic scale of the SAGD system is roughly 30,000 b/d, making it a more manageable and less risky technology. SAGD involves the marriage ofmore » conventional shaft and tunnel mining with the new precision possible in horizontal drilling. The cost savings are dramatic, and the environmental insult from the operation is greatly reduced. Instead of stripping overburden and then strip-mining the tarry sands, the SAGD technique starts underground with tunnels drilled beneath the tar sands strata. From the tunnels, pairs of horizontal wells are drilled up into the beds. Steam injected into the upper well fluidizes the tar, creating a void, from which the liquid tar flows down into the lower producing well.« less