Shell Testing New Waste Technology For Canada's Oil Sands
August 26 2010 - 4:35PM
Dow Jones News
Royal Dutch Shell PLC (RDSA) said Thursday it began a commercial
demonstration of a new technology to reduce the waste pools created
by Canada's oil sands mining industry, and that it will make it
freely available to competitors.
However, Shell executives said they are still uncertain whether
the technology will meet a new directive set by the Alberta
government to reduce the waste pools, called tailings ponds.
Tailings ponds are a mixture of sand, silt and residual oil
created when hot water is used to separate the oil from the oil
sands mined in northeastern Alberta. Without technology, the ponds
can take hundreds of years to fully dry.
The oil sands industry is trying to halt the growth of the
tailings ponds, which are the most visible sign of the industry's
effect on the environment. They cover more than 50 square miles in
northeast Alberta and are set to grow along with the oil sands
industry, which is a key source of U.S. oil supplies expected to
double in size to more than three million barrels a day this
decade.
Shell's new technology, called Atmospheric Fines Drying, uses
thickening agents and flocculants to speed the solidification of
the tailings, which are then rolled down a sandy slope to extract
water. The water is then reused in the oil sands operation.
The demonstration project at Shell's Muskeg River Mine will dry
out about 250,000 metric tons of tailings this year. That is only a
small fraction of the waste created by the Muskeg River Mine, given
that it can produce about 150,000 barrels of oil a day, and about
two metric tons of sand are mined to create one barrel of oil.
Shell's Muskeg River tailings pond covers nearly nine square
miles.
But Shell says it will use results from the project this fall to
see if it can be adopted on a wider scale at Muskeg and its nearby
Albian Jackpine oil sands mine.
Shell will also allow competitors to use Atmospheric Fines
Drying and other tailings reduction technologies it has developed
free of charge.
"We'll make it available, no strings attached, no [intellectual
property], no expectation of money," said John Broadhurst, Shell
Canada's vice president of development, at a press conference
Thursday. "We need to do our part in terms of delivering effective
tailings solutions and doing it more rapidly than we've been able
to do in the past," he said.
However, Shell's existing tailings plan don't appear to meet the
strict directive set by Alberta regulators, which last year asked
oil sands producers to cut tailings production by 20% starting in
July, and ramp up to a 50% annual reduction by 2012.
Suncor Energy Inc. (SU), Canada's largest energy company, is the
only one so far to meet those requirements. However, tailings
management plans submitted by Imperial Oil Ltd. (IMO) and the
Syncrude project, which is managed by Canadian Oil Sands Trust
(COS.UN.T), were approved despite not reducing tailings enough to
meet the directive.
The Alberta government is still reviewing tailings management
plans submitted by Shell and Canadian Natural Resources Ltd.
(CNQ).
"We think it's really positive that Shell is moving forward with
a new technology to reduce tailings...but it's on a path to not
meet the directive," said Terra Simieritsch, an oil sands technical
and policy analyst for environmental think tank the Pembina
Institute.
Simieritsch said Alberta regulators "are sending mixed messages
because they are approving plans that don't meet the standards they
set out."
Shell is the 60% owner of the Muskeg River Mine; Chevron Corp.
(CVX) and Marathon Oil Corp. (MRO) each own a 20% stake.
-By Edward Welsch, Dow Jones Newswires; 403-229-9095;
edward.welsch@dowjones.com
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