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he head of an Alberta government program that tries to kick-start the development of new energy industry and related environmental technologies says the future of oilsands bitumen and heavy oil upgrading in the province will likely be marked by “niche technologies” rather than giant, multibillion dollar projects. “The idea is to look at next-generation technologies for upgrading,” says Eddy Isaacs, chief executive officer of Alberta Innovates – Energy and Environment Solutions (AI-EES). “[Such as], how do we get better-quality crude to refineries and how do we reduce or eliminate diluent use?” Isaacs sees AI-EES’s role as one of helping to maximize the market value and marketability of oilsands crudes, especially in light of growing tight oil production in the United States, transportation bottlenecks and other issues. Since 2006, AI-EES (then the Alberta Energy Research Institute) has analyzed and funded a number of industry-led projects aimed at upgrading Alberta’s hundreds of billions of barrels of bitumen into higher-quality crude and other products. That initiative is called the Hydrocarbon Upgrading Demonstration Program (HUDP). The agency, which receives funding of $25 million per year from the province, concentrates on a number of energy technologies—including those aimed at reducing CO2 emissions—environmental management technologies, renewable and emerging resource technologies, and water resources.
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Upgrading in alberta is expected to increase in small increments and without many large projects By Jim Bentein
Isaacs says the HUDP isn’t about reinventing the wheel and replacing existing upgraders and refineries with some groundbreaking technology. That’s why he has no quarrel with the argument that there is economic logic in moving Alberta bitumen to existing heavy oil upgraders on the U.S. Gulf Coast and elsewhere. However, there are “unique approaches” that can lead to more upgrading within Alberta and Canada. One example is the OrCrude technology used now for several years at Nexen Inc.’s Long Lake oilsands project in northeastern Alberta. Although the process, which uses Lurgi gasifier technology, has run into ongoing operational problems, Isaacs says it’s an example of the kind of approach that can transform the oilsands industry. His department played a role in funding and analyzing that technology.
north west: a new approach to upgrading in alberta Another novel approach is that being taken by North West Upgrading Inc., operator of the recently sanctioned $5.6-billion Sturgeon Refinery in Alberta’s Industrial Heartland. Development of the first phase of that project, which will upgrade 50,000 barrels of bitumen per day, will start this spring, with two future phases bringing processing capacity to 150,000 barrels per day. The long-awaited sanction announcement came in fall 2012. Development of the Sturgeon Refinery was stimulated by the province’s Bitumen Royalty in-Kind (BRIK) program, which makes