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Journal

of the

CanadianHeavy Oil Association JUNE 2 0 1 1 e d i t i o n

5 8 12

Q&A with Butch Loewen Chairman, CHOA social committee Feature Article Oilsands exchange CAPP undertakes broad stakeholder discussions to help form Canadian bitumen development policy Technology Article Suncor’s TRO process A new tailings management approach speeds reclamation and results in the cancellation of plans for additional ponds


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While some of the oil from Canada’s oil sands sits near the surface, the majority is found deep underground. And even though you can’t see it, innovative technology, pioneered here in Canada, allows us to reach that oil by drilling for it, so we disturb very little land. In fact, over 80% of the oil sands is only accessible using this type of recovery. Cenovus is a Canadian company committed to safely and responsibly unlocking this abundant natural resource for today and tomorrow. Discover more at adifferentoilsands.com.

New ideas. New approaches.


Photo: Dave Branch

On the Cover

Message from the president Welcome to the June 2011 edition of the Journal of the Canadian Heavy Oil Association. As my time as president nears completion, it is exciting to reflect back on the changes the CHOA has been able to implement during the past year. It certainly has been an eventful year, with two of the more significant events occurring in the spring of 2010 when the groundwork was laid to move to a governance-style board and the hiring of a full-time executive director. I want to thank Maureen Armitage for her outstanding work as executive director this past year, helping guide the board through the new governance model and doing much of the groundwork setting up policies and documentation that will make it easier to conduct our work in the future. Our board meetings are far more productive when we can rely on the committees and executive director to perform their work so capably, allowing the board to focus on addressing the opportunities and challenges facing the CHOA. I also want to thank the many volunteers who work so hard to enable the CHOA to organize outstanding events such as the technical lunches, Slugging It Out, Fall Business Conference, social events and others. Without a doubt, the most rewarding part of working with the CHOA is the people you meet and work with, people who have a passion for the heavy oil industry and enjoy working together as a team. I have mentioned in previous messages how important it is to communicate with our members. The CHOA recently completed a membership survey on our new website and this month’s Journal includes an article summarizing the results of the survey. Thank you to all who took the time to complete the survey; the CHOA values your comments and feedback about what we are doing right and where we need to improve. This survey provided confirmation that the CHOA is achieving our mission statement: “To provide an appropriate technical, educational and social forum for those employed in, or associated with, the heavy oil and oilsands industries.” It also identified some key areas CHOA members would like to see addressed. One of the items highlighted in the membership survey is the importance of communication and public education. If you want to learn more about proposed changes to the Heavy Oil 101 course, be sure to read the article contained in this month’s Journal. Another item mentioned in the survey is the importance of involving students more in the CHOA. This past year, the CHOA has initiated student membership rates for the first time and is also in the process of implementing reduced student rates for technical talks and conferences to encourage student involvement. The CHOA is also looking into opportunities to become more involved with various campuses in Alberta, and we would certainly welcome comments and ideas from students, faculty or industry members. In closing, thank you for the privilege of serving as president of the CHOA this past year, and I hope you enjoy a wonderful summer. I look forward to seeing you at our summer events including the CHOA Edmonton golf tournament on June 24, the Calgary Stampede breakfast on July 13 and the CHOA Calgary golf tournament on September 1. Sincerely, Barry Lappin President, Canadian Heavy Oil Association, 2010-11

Journal of the Canadian Heavy Oil Association

Facilities at the Surmont SAGD project. Photo: Joey Podlubny

Table of Contents Feature story Oilsands exchange

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Technical article Suncor’s tailings reduction operations process

12

Project Update Surmont

16

Departments News CHOA profile Event speakers CHOA sponsors Board of directors listing

4 5 6 18 18

About the Canadian

Heavy Oil Association

Suite 400, 500-5 Ave SW Calgary, Alberta T2P 3L5 p: 403.269.1755 | f: 403.453.0179 e: office@choa.ab.ca | choa.ab.ca The mission of the Canadian Heavy Oil Association is to provide an appropriate technical, educational and social forum for those employed in, or associated with, the heavy oil and oilsands industries. Editor: Deborah Jaremko, Oilsands Review Technical Editor: Gordon Stabb, Durando Resources Corporation Committee Members: KC Yeung, Husky Energy John Graham, Suncor Energy The Journal of the Canadian Heavy Oil Association is published by JuneWarrenNickle’s Energy Group. June 2011

3


NEWS

Restyled Heavy Oil 101: From Wells to Wheels technologies and also expands to the macro issues pushing development.

MacFarlane explains that the new Heavy Oil 101 course has potential to be part of a broader scope for CHOA in external communication. “The conference is the kickoff, but we want to get this out to places like the teacher’s

Innovation Series: A new service for CHOA members

Not every company or individual has the opportunity to share their technologies with CHOA members at regular events. To support even greater dialogue between producers and suppliers, the CHOA will launch its Innovation Series this fall. Organizer and CHOA past-president Gerry Belyk explains that Innovation Series events will be similar in format to a Beer & Chat, with one important difference— these presentations will be free for CHOA members.

If you’d like to help with Heavy Oil 101, please contact the CHOA office. New student event rates available CHOA student members now have the opportunity to attend events at a reduced rate. CHOA-only events including technical luncheons, Beer & Chats and the fall business conference are now available to CHOA student members for half price!

COMING SOON: STAMPEDE BREAKFAST 2011

Photo: istock/LauriPatterson

The CHOA is launching a new version of its Heavy Oil 101 course this July, in conjunction with the Oil Sands and Heavy Oil Technologies Conference & Exhibition. Heavy Oil 101 is an industry overview course, and an excellent refresher. The new program details industry

“Participants will come back with better ability to filter all of the things they hear about heavy oil and oilsands,” says Bill MacFarlane, Heavy Oil 101 organizer and CHOA past president. “Through a technology focus, we will look at development of this viable source energy, which is driven by demand.”

convention, in order to reach high school students,” he says, adding that program construction is still underway. “We’re always looking for contributors and engagement.”

Join the CHOA and our partners, the Society of Petroleum Engineers and Gas Processing Association Canada, for our annual Stampede

Breakfast! This year’s event will feature a special program of volunteer appreciation, an opportunity for CHOA to thank the many people that give their time and support.

“Instead of charging members to attend, we’re charging the speakers to speak,” Belyk says. “This is an opportunity and a platform for companies within the heavy oil industry to speak to a number of people from our membership. For suppliers, it is an opportunity to share their innovation. For producers, it is an opportunity to learn more about what is available.”

WHEN: Wednesday, July 13, 7 a.m. to 11 a.m.

WHERE: Flames Central, Calgary Visit www.choa.ab.ca for more details.

The events will feature presentations and then discussion. Belyk says the idea is not to host sales pitches, but to talk about results. If you would like to learn more or get involved, please contact the CHOA office at office@choa.ab.ca

Upcoming Events 2011

JUNE

July

SEPTEMBER

27 Beer & Chat

10 Lobster Night

13 Stampede Breakfast

1 Calgary CHOA Golf Tournament

NOVEMBER

Hotel Arts, Calgary

14 Technical Luncheon

Drilling & Completions 24 CHOA Edmonton Golf Tournament

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June 2011

Hosted by CHOA, SPE and GPAC Flames Central, Calgary 19 Heavy Oil 101: From Wells to Wheels Oil Sands and Heavy Oil Technologies Conference Telus Convention Centre, Calgary

13 Technical Luncheon

Facilities & Upgrading

29 Innovation Series

TBA

Drilling & Completions

10 Fall Business Conference 22 Technical Luncheon

Environment

OCTOBER

DECEMBER

4 Technical Luncheon

6 Technical Luncheon

Business, Transportation & Marketing

Reservoir & Production

Canadian Heavy Oil Association


CHOA PROFILE Photo: Charles Hope

Interview with Butch Loewen Chairman, CHOA social committee

Professional Role: Sales and marketing director, Regent Energy Group Ltd. (Downhole sand control and steam optimization) Every year, the CHOA hosts four social events in Calgary (Golf Tournament, Curling Funspiel, Lobster Night, Stampede Breakfast) and one in Edmonton (Golf Tournament). Butch has led the CHOA’s Calgary social committee for the last four years, and has been actively involved in the planning and organization of CHOA social events for over 10 years. This year’s Calgary golf tournament will be his last event as chair of the social committee, and the CHOA sincerely thanks him for all his hard work.

 here do social events fit into the operational scope of Q| W the CHOA?

A | T he CHOA has been very clear that this is a technical education–

based association, which is good. We don’t want to make it a social association—so many associations are just social. The CHOA is so far ahead of that, if you look at all of the events that we run: technical luncheons, Beer & Chats, conferences. The value to members is huge.

The social events are a bonus, an extra benefit. It’s a tremendous networking opportunity. You don’t want to be in a business suit every time you meet someone. Being in a casual atmosphere often leads to better networking. It’s easier to talk to someone in golf shorts or a costume than in a suit and tie.

Q | How did you get involved with the CHOA social committee?

A | It was mostly the golf tournament, and then curling. I curl and golf,

so it was a natural fit. I’ve been involved in organizing events for 20 years, including coaching various sports.

The committee [which also includes Kristoffer Watson and Whitney Connolly] plans each event piece by piece. The question is always, how can it be more fun? And competition isn’t necessarily fun. We keep it as fun as possible, and keep competition out of it as much as possible. It’s not about winning. For instance, we offer a great prize for finishing last in the golf tournament. Because we have so many great sponsors, we are able to give some really big prizes like barbeques and electronics. It’s not hard, it’s not rocket science—it’s fun.

 hat do you see in the future for CHOA social events? Q|W |  A We have rarely changed the events, just made small adjustments.

For instance, for this year’s Calgary golf tournament we’re adding a shuttle from downtown so that people don’t have to worry about driving. The events will probably not change much [with me leaving]. But there is a fine line between being stagnant and consistency. I think I’ve been doing this for so long that maybe someone should look at it with new eyes. ❚

 hat does your job as chairman of the social committee Q|W involve?

A | T he office staff [Georgia Hasapes and Kathryn Murray] does

most of the detail work. There are also many other volunteers who help out, and we appreciate it. These events run smoothly, and members like that.

Journal of the Canadian Heavy Oil Association

June 2011

5


EVENT SPEAKERS

Thank you to our event speakers and sponsors

DATE

EVENT

NAME

PRESENTATION

March 8

Technical Luncheon

Scott Grindal, ConocoPhillips Canada

Caribou and oilsands development

April 5

Technical Luncheon

Shauna Noonan, ConocoPhillips Technology

Artificial lift for heavy oil production—hot and cold

April 11

Slugging it Out XIX: Crude Awakening Conference Sponsor

Speakers: BITUMEN TO FUELS & PETROCHEMICALS WITH 21ST CENTURY ENVIRONMENTAL PERFORMANCE Ian MacGregor, North West Upgrading Inc. CONNACHER OIL & GAS: THREE YEARS OF ARTIFICAL LIFT AT POD 1 Steve Breen, Connacher Oil & Gas Limited

Emerald Sponsor

ESPCP — ELIMINATING DOWNTIME AND INCREASING OIL PRODUCTION AT PELICAN LAKE Kristy Hammermeister, Cenovus Energy Inc. Alfredo Leon, Baker Hughes Canada COLD PRODUCTION — A STORY OF ENABLING TECHNOLOGIES Ron Sawatzky, Alberta Innovates—Technology Futures

Ruby Sponsors

PATOS MARINZA HEAVY OIL FIELD REDEVELOPMENT Eugene Christensen, Bankers Petroleum Ltd. GEOMECHANICAL ANALYSIS OF MAXIMUM OPERATING PRESSURE FOR SAGD RESERVOIRS Dale Walters, Taurus Reservoir Solutions Ltd. ON THE IRRATIONAL RESISTANCE TO AIR INJECTION EOR John Belgrave, Belgrave Oil and Gas Corp. ALASKAN HEAVY OIL: FIRST CHOPS TEST IN THE ARCTIC James Young, BP Alaska PAW’S STORY: TURNING BARRELS INTO DOLLARS — A CNRL PERSPECTIVE Daryl Youck, Canadian Natural Resources Limited A COMPARISON OF SAND RETENTION AND DIFFERENTIAL PRESSURE OF SLOTTED LINERS VERSUS WIRE WRAPPED SCREENS FOR THERMAL COMPLETION OPERATIONS Brant Bennion, Weatherford Laboratories (Canada) Ltd. RECENT DIRECTIONAL DRILLING INNOVATIONS AND THEIR IMPACT ON SAGD ECONOMICS John Person, Halliburton SURMONT PHASE 1 UPDATE, WELL PERFORMANCE AND CHALLENGES Greg Barham, ConocoPhillips Canada

Apr 28

Beer & Chat

Janet Annesley, Canadian Association of Petroleum Producers Ed Whitingham, Pembina Institute Dr. Eddy Issacs, Alberta Innovates: Energy and Environment Solutions

Getting the facts right

Paul Griss, Boldon Group Incorporated May 10

Technical Luncheon

Dr. Claes Palmgren, Alberta Oilsands Inc.

May 26

Beer & Chat

Deborah Jaremko, Oilsands Review

The Clearwater Phase 1 in situ SLP-SAGD bitumen production project

Jerome Ybema, Suncor Energy Inc. Laureen Little, Devon Canada Corporation

The future of SAGD facilities

Mark Brown, Seven Generations Energy Ltd. Richard Scott, WorleyParsons Canada Edmonton Chapter Dinner

6

June 2011

Janet Annesley, Canadian Association of Petroleum Producers

Talking oilsands and the energy future

Canadian Heavy Oil Association


News

Membership news: The survey results are in!

In March 2011, the CHOA conducted a webbased survey of our membership. The results confirm that members see the CHOA as their “go-to” networking association, a place for valuable technical information that keeps them up to date on what is going on in the industry. Most heartening of all, the survey found that members value the sense of community they find in the CHOA. Nearly 300 people—or approximately 22 per cent of the membership—provided their input, responding to specific questions about CHOA benefits and priorities. To many respondents, what makes the CHOA unique is its laser focus on heavy oil, and the depth and breadth of coverage of the industry that it provides. When asked about their primary reason for joining the CHOA, an overwhelming number listed the key reasons as networking, the sharing of technical knowledge and keeping current on what is happening in the industry. Core CHOA programming such as the technical lunches, Fall Business Conference and Slugging It Out spring conference are key parts of this package for our members.

Survey respondents also ranked highly the suggestions that the CHOA take a greater role in public communications and education, working with other groups with similar objectives and involving students and young people in the industry. The board is already looking at ways we can

Survey respondents would like to see more development of programming for our members based outside Calgary, especially those in Edmonton, keeping in mind that simply exporting the Calgary model to Edmonton will not work well. A good example of this is the technical luncheon concept—a technical talk offered at a downtown location during the lunch hour is generally convenient for members in Calgary, but it is not practical for many in Edmonton who work in locations spread throughout the city. The members who answered the survey were very helpful in providing suggestions for growth and improvement of the association, including the introduction of a multi-day conference, more technical events and training, and providing reference information and material for members to access.

integrated energy or exploration and production companies, and 30 per cent work for service and supply or manufacturing companies. Forty per cent of respondents are engineers and 38 per cent are in senior management. Overall, survey respondents felt that the CHOA was doing a great job of delivering quality programming and good value for its members. Many recognized that one gets out what one puts in, and as a volunteer-driven organization, all members have a responsibility to contribute. It was also acknowledged how fortunate the CHOA is to have so many skilled and knowledgeable people who are willing to share, and who have made the CHOA the great organization that it is today.

Interestingly, we found that while 55 per cent of respondents have been involved with the heavy oil industry for eight years or more, 80 per cent have only been involved with the CHOA for seven years or less. Forty-five per cent of respondents work for major

illustration: istock/mstay

When asked about future priorities, members ranked the development of specific topic workshops involving industry, government and special interest groups the highest. This speaks to the strong appetite among members for increased learning opportunities, and you can expect the board of directors to respond to this demand in the very near future.

accomplish these goals. If there are members interested in helping out with these initiatives, their input would be most welcome, and they should inquire further with the CHOA office.

Because putting it off until tomorrow isn’t an option. The world won’t wait while our industry imagines what the ideal form of clean power is. It wants action. Which is why our environmentally efficient technology is designed to work now as well as into the future. It’s tried, tested and available TODAY. Visit www.alstom.com/power

Journal of the Canadian Heavy Oil Association

June 2011

7


Feature article

Oilsands exchange By Ashok Dutta Recently, the chief executive officers of many oilsands producing companies have been doing a lot of talking, and according to the Canadian Association of Petroleum Producers (CAPP), they’ve been doing a lot of listening too. Last year, CAPP launched an outreach program it calls Dialogues on the Oil Sands: Engaging Canadians and Americans, a series of discussions with “key influencers” in Canada and the United States. Participants included members from the investment community, environmental groups, labour, academia and Aboriginal leadership, as well as what CAPP calls “broader social, local, community and faith-based perspectives.”

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June 2011

The sessions, designed to “engage Canadians and Americans in a deeper discussion about the development of Canada’s energy assets, with particular focus on the oilsands,” were held in Vancouver, Edmonton, Ottawa, Toronto, Montreal, Washington, New York and Chicago. CAPP says the goal was a respectful sharing of diverse views. “The purpose of the dialogues was to understand the diversity of views on oilsands, both the challenges and opportunities,” says CAPP president David Collyer. “Through this exchange, it was our intent to advance possible solutions to improve the performance of companies working in the oilsands and to assist in clarifying the role of oilsands in Canada’s energy future.” Collyer adds, “We had not done anything like the oilsands dialogues before and were interested in continuing these and other forums to discuss the critical issues—from Canada’s energy system to greenhouse gas emissions, to local and regional environmental and social impacts.” Facilitated by the Canada School of Energy and Environment—assisted in the United States by the Woodrow Wilson International Center for Scholars—a unique aspect of

Photo: istock/linearcurves

CAPP undertakes broad stakeholder discussions to help form Canadian bitumen development policy

the exercise was that all sessions were held under the Chatham House rule, indicating that speakers were free to voice their own opinions without concern for their personal reputation or their official duties and affiliations. The messages CAPP recently released its report on the dialogues, offering some insight into what the group heard and the response of industry. Here are some of the key themes, as outlined in the report: • The oilsands industry plays an important role in economic growth and energy security, but there is a need for assurances that development will occur responsibly and that environmental challenges will be addressed. • Canada has a global role as a responsible steward of its vast energy resources, including the oilsands. • There is a need to transition to lower carbon fuels over time. • The oilsands industry creates jobs in Canada and the United States, but if it is to be a truly national resource, it must do more to embrace all parts of Canada, especially with respect to contracting and procurement opportunities. Canadian Heavy Oil Association


• There is a need to diversify the oilsands market beyond the United States, particularly to Asia. However, a number of participants in the Vancouver session “expressed serious concerns” about the impact of a pipeline to the West Coast and subsequent tanker traffic. • Further development of the oilsands should proceed only as long as it is carefully planned to achieve “responsible environmental and social outcomes.” • Oilsands producers should demonstrate real environmental progress through concrete, measurable benchmarks and results, and there is support for the implementation of thresholds related to cumulative environmental impact. • Technology is an “energy problem solver,” but there is debate about where the focus should be—whether on transportation, alternatives, oilsands, etc. • There is concern about the effectiveness of the current regulatory regime. • There are issues about trust, especially around the environment and human health, and “whether producers had fully earned the social licence to operate.” • The opportunities and challenges of oilsands development could be better dealt with through a “comprehensive, longer-term Canadian energy strategy.” The responses In its report, CAPP also outlined some of the broad consensus responses of oilsands producers to the themes brought up during the dialogues. It is in Canada’s best interest to view the oilsands through the lens of the “3Es,” which are economic growth, environmental performance, and energy security and reliability. The industry will undertake initiatives to increase the breadth and transparency of its supply chain. An opportunity exists to accelerate the pace of innovation through closer relationships with academia, technology researchers and providers. “Technology and innovation will be the key lever to address Canada’s [greenhouse gas] reduction challenge.” Canada’s oilsands producers “encourage, support, and will actively engage in efforts to develop a national energy strategy.” Producers “strongly support regional planning in the Lower Athabasca region, leading to acceptable environmental and social outcomes.” It is not industry’s role to deliver fundamental social services—it does so by paying taxes to governments and investment in communities. “Transparency in performance reporting is essential,” and CAPP will report annually on oilsands performance through its Responsible Canadian Energy program, which includes third-party processes. Journal of the Canadian Heavy Oil Association

What some of the “key influencers” had to say “There are no simple solutions. Technology needs to be part of the solution. Hard to say stop producing when we are demanding.”

“There is huge economic development for manufacturers in Ontario from oilsands.”

“How do we not increase the environmental effects on par with the increase in development? We need to define environmental thresholds.”

“I know this is obvious, but there is a need for an education program.”

“I find it difficult to see oilsands in a discrete fashion and not part of a value chain, i.e. transportation service, in Canada and around the world.”

All sessions were held under the Chatham House rule, indicating that speakers were free to voice their own opinions without concern for their personal reputation or their official duties and affiliation.

June 2011

9


Feature article

“It was our intent to advance possible solutions to improve the performance of companies working in the oilsands and to assist in clarifying the role of oilsands in Canada’s energy future.”

— David Collyer, President, Canadian Association of Petroleum Producers

The next steps The first phase of the dialogues may be over, but Collyer says there is still much work to be done. “We looked at this as a starting and not an end point. For now, we have engaged Canadians and Americans in a solutionsdriven effort. Our report is out in public domain and there will be follow-up meetings in Vancouver, Ottawa, Toronto and Washington to determine the next steps.” CAPP says the intention is that its dialogue process will be used to contribute to energyrelated initiatives such as the Energy Policy Institute of Canada’s development of a national energy strategy. Looking ahead, other target locations— including places in Asia—are also on CAPP’s radar, although no immediate efforts are

being launched. “We needed to be first focused on the jurisdiction that takes our oil,” says Collyer. “The dialogues were, in a way, a pilot program, and with the benefits of it we would move into other markets.” He adds that road shows in China, Korea and India would be a “natural extension” of what has already been set in motion, and that CAPP is already engaging Asian stakeholders beyond its dialogues. But for producers in Alberta, the biggest near-term hurdle to overcome will be selling additional volumes of crude oil to the United States. After all, the fate of the proposed 550,000-barrel-per-day Keystone XL pipeline expansion to transport diluted bitumen from near Edmonton to refineries in the U.S. Gulf Coast still hangs in the balance.

Athabasca is a dynamic energy company poised to unlock bitumen from Canada’s vast oil sands region and light oil from its Deep Basin play in northern Alberta. It has excellent assets, a large resource base with ample upside, talented people and is well financed. In four years, it amassed a land base of 2.7 million acres (net) and delineated more than 12 billion barrels (gross) of contingent resource (best estimate) of which it holds 8.8 billion barrels. It has a diverse portfolio of short, mid and long-term assets.

Major Canadian in-situ oil sands developer

www.aosc.com 10

June 2011

Canadian Heavy Oil Association


RADAR ReAl-time AnAlySiS foR DRillinG AnD ADvAnceD RAnGinG

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■ Injector wellbore ■ Producer wellbore Surface casing

200 m

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400

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1,400

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1,000

800 m

■ Injector wellbore ■ Producer wellbore Tie in to original surveys at 930 m

*Mark of Schlumberger. © 2011 Schlumberger. 11-PF-0004

536.0

540.0

544.0 Intermediate casing 548.0 320

400

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Vertical section at 358.81° (80 m/in)

Accurate placement of twin wells in SAGD heavy oil reservoirs The PathFinder RADAR* service uses at-bit measurements and applies advanced ranging techniques to determine an accurate position and distance from the injector well to the target (producer) well. The relative position of the producer well is monitored continuously while drilling the injector well, enabling directional changes to be made in real time to ensure accurate and correct well placement. 403-509-4300 www.pathfinderlwd.com

800

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technical article

TAILINGS REDUCTION OPERATIONS OVERVIEW Boreal

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Suncor’s tailings reduction operations process A new tailings management approach speeds reclamation and results in the cancellation of plans for additional ponds By Bradley Wamboldt General manager, tailings operations, Suncor Energy Inc. The tailings reduction operations (TRO) process is a new approach that Suncor has developed for managing tailings at its oilsands mining operations near Fort McMurray, Alta. Like all mines, oilsands facilities generate tailings, the leftover material produced through the extraction process. Suncor’s TRO process is expected to result in significant improvement in the speed of tailings reclamation. Suncor believes the TRO process will help it meet new provincial regulatory requirements and, just as importantly, will help it meet the changing expectations of stakeholders. Suncor plans to invest more than $1 billion over 2010-12 to implement TRO, which the company expects will reduce tailings reclamation time by up to two decades as compared to its current methods. The tailings challenge Tailings are a mixture of fine clay, sand, water and residual bitumen produced during the extraction process that separates bitumen 12

June 2011

from oil sand. Tailings are pumped into holding ponds to settle solids from water. When tailings are released to a pond, the heaviest material—mostly sand—settles to the bottom, while water rises to the top. The middle layer, the mature fine tailings (MFT), is made up of fine clay particles suspended in water. Some of these particles settle, but much remains suspended. The challenge is that MFT has historically taken many decades to firm up sufficiently for reclamation. As a result, Suncor has needed more and larger oilsands tailings ponds over the years. Our eight tailings ponds cover a total of 31.5 square kilometres and contain approximately 259 million cubic metres of MFT. Active tailings ponds account for 18 per cent of the 17,161 hectares of disturbed land that Suncor is currently working to reclaim. Consolidated tailings (CT) technology, pioneered by Suncor in the 1990s, is the current method of speeding the consolidation of MFT. The CT process adds coarse sand and gypsum to the MFT to accelerate the release of water. While CT has proven effective, Suncor Canadian Heavy Oil Association

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Illustration: Suncor Energy

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TRO, CT: how they stack up The use of TRO over CT technology at Suncor’s oilsands mining operations is expected to result in a shorter time to reclamation. Suncor expects TRO will result in a reclaimable surface 10 years after initial disturbance. Estimated time to a reclaimable surface using the CT approach is approximately 30 years.

has continued to research and develop new and better processes to further accelerate MFT consolidation, such as MFT drying—a key TRO process component. Developing the TRO process Suncor first began testing and evaluating MFT drying in July 2003. The trial results were promising, and a larger-scale pilot began in October 2004. Further testing continued in spring 2005 after freezing conditions had subsided and during 2006-07 for winter and spring operation. The initial objective of the testing was to produce sufficient strength in the MFT to allow evaporation to remove water from the material on a slope. Suncor investigated the use of alternative chemical additives in 2007-08 to help with the de-watering process. After several months of laboratory research, Suncor selected a polymer product for a field trial. The polymer process produced a trafficable surface (that is, a material solid enough to handle the weight of traffic) more efficiently Journal of the Canadian Heavy Oil Association

30

YEAR S

than the previous testing. A test facility operated from December 2007 to early January 2008, using about 90,000 cubic metres of MFT. An MFT drying pad, covering a total surface area of 60,000 square metres, was developed at the facility. The test resulted in the production of around 42,000 dry tonnes of MFT. Suncor relocated the original MFT drying test facility during the winter of 2008-09 to allow further evaluation of the increased efficiency and capacity of MFT drying. In August 2009, Suncor received regulatory approval for additional testing facilities, including two MFT drying plants that were implemented in early 2010. How the TRO process works The implementation of the TRO process involves converting fluid fine tailings more rapidly into a solid landscape suitable for reclamation. MFT is mixed with a polymer flocculent, and then deposited in thin layers over sand banks with shallow slopes. The resulting product is a dry material that is capable of being reclaimed in place or June 2011

13


technical article

Photo: Suncor Energy

Article author Bradley Wamboldt, Suncor’s general manager of tailings operations, with oilsands mine tailings solidified by the company’s tailings reduction operations process.

moved to another location for final reclamation. This drying process occurs over a matter of weeks, allowing for more rapid reclamation activities to occur. The new process is expected to improve tailings management going forward, and can also be used to reduce existing tailings inventory at Suncor’s operations. The polymer flocculent adheres to the clay particles in MFT, causing them to bundle together. This results in the separation of clay from the water. The polymer flocculent is an anionic polyacrylamide, a class of chemical commonly used in municipal water treatment facilities to settle out solids. This chemical is completely safe, as it is inert and does not react with the environment. The use of TRO over CT technology at Suncor’s oilsands mining operations is expected to result in a shorter time to reclamation. We expect the TRO process will result in a reclaimable surface 10 years after initial disturbance, versus the estimated time of approximately 30 years to a reclaimable surface using the CT approach technology. The company is targeting to discontinue CT technology use at its operations by year-end 2011. TRO process implementation underway In June 2010, Suncor received approval for its tailings management plan from the Energy Resources Conservation Board (ERCB). The plan proposed the expansion of our new TRO tailings management approach. 14

June 2011

The implementation of TRO technology towards full commercial-scale operations is well underway. More than 200 employees and contractors worked to ramp up the TRO process during the summer 2010 peak drying months. Heading into the 2010-11 winter season (when drying isn’t possible), Suncor had: • Processed approximately 2.9 million tonnes of tailings fines (compared to 188,000 tonnes of tailings fines in 2009); • Capacity to process 25,000 to 30,000 tonnes of tailings fines per day (compared to a tailing fines processing capacity of 1,500 tonnes per day in 2009); • Four TRO process MFT drying sites and five plants (compared to one drying site and one plant in 2009); • Plans to add MFT drying sites annually for the next three years, resulting in a capacity to process approximately 70,000 tonnes of tailings fines per day by 2013. The first phase of the project to implement the TRO process is expected to be complete in the first quarter of 2012, with the second phase slated for completion by year-end 2012. With TRO technology ramp up towards full commercial-scale operations well underway, Suncor is on track to meet or exceed fluid tailings reduction performance targets approved by the ERCB under Directive 74. Plans for additional tailings ponds cancelled The TRO process is changing how Suncor manages tailings at its mine, which processes

180 million tonnes of oilsand annually and ingests about 50,000 tonnes of fine clays per day. TRO technology development, regulatory approval and commercial implementation have already enabled Suncor to cancel plans for five additional tailings ponds at its existing mine operations. In the years ahead, Suncor also expects to reduce the number of tailings ponds at its present mine site from eight to just one, shrinking the total land area covered by the ponds by approximately 80 per cent. Suncor and industry set new direction for tailings research Suncor and six other oilsands companies announced plans in December 2010 to work together in a unified effort to advance tailings management. Each company has pledged to share its existing tailings research and technology and to remove barriers to collaborating on future tailings research and development. Suncor intends to share details specific to its TRO process. In turn, the companies are committing to future research investments to further accelerate tailings technology advances. Comments? If you would like to respond to the opinions expressed in this article, we’d be glad to publish your thoughts for our other readers. Please contact djaremko@junewarren-nickles.com Canadian Heavy Oil Association

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T h In a p

W te b

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One Hot Opportunity. Thermal heavy oil is a key part of Devon’s future and we’re working hard to significantly grow our production over the next decade. In addition to the award winning Jackfish facility and its two look alike projects, Devon is in the early stages of multiple development phases of a new program called Pike. We have the top quality acreage position and resource base, technical track record and values-based approach to get us there, but need more great employees to help us reach our goal. If you’re interested in joining this new and growing team, please see the Careers section at www.dvn.com.

GREAT PLACE TO WORK INSTITUTE CANADA Best Workplaces 2011

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Project Update

Photo: ConocoPhillips Canada

Surmont

Location: Southeast of Fort McMurray, Alta. (86-06W4) Ownership: 50/50 joint venture between ConocoPhillips Canada

A conversation with Perry Berkenpas Vice-president, oilsands operations, ConocoPhillips Canada Ltd.

83,000-barrel-per-day Phase 2 under construction

By Deborah Jaremko

Project start-up: Phase 1—2007, Phase 2—2015

How would you describe the recent performance of Surmont? We are very proud of Surmont. We’ve been operating there since 2007, and have had excellent operational success over the last few years. We are currently reaching a stable gross average production of approximately 23,000 barrels per day. It’s taken a lot of hard work, but we’re starting to reap the rewards from the application of our ConocoPhillips “Operations Excellence” management system. But none of that would be possible without great people. Over time, we’ve developed a site culture where people take care of one another and work well together. We’re proud of Surmont’s culture and are putting the systems and people in place to sustain this as our team grows. What key lessons have been learned over the years at the Surmont project? I think one of the things we have learned is that Surmont and steam assisted gravity drainage [SAGD] are highly integrated between reservoir, well, plant and product sales systems as compared to conventional operations around 16

June 2011

and Total E&P Canada Ltd.

operator: ConocoPhillips Canada Production capacity: 27,000 barrels per day operational,

the globe. We have structured our organization to address the depth of knowledge needed while ensuring we have strong integration. Applying our knowledge from the company’s complex world-class operations has led to higher efficiency. Another significant learning has been in the application of 4-D seismic coupled with a high level of instrumentation and control. This has resulted in improved steam chamber management, production optimization and ultimately reserves recovery. The diagnostics techniques coupled with a continuous improvement culture are unlocking additional value. We have also found opportunities to apply relatively simple existing technology to make a difference at our operation. Vacuum insulated tubing [VIT], for example, is a widely available and commercial technology, but it has not been applied to SAGD and is being piloted at Surmont. VIT helps reduce the amount of subsurface heat lost and will reduce time to initial SAGD production and steam to oil ratios [in the] long term. This provides increased efficiency and operability while reducing environmental impacts.

What are the future development plans at Surmont? Our second phase of Surmont is currently under construction, and we’re excited about the future of this asset. We completed the clearing and grubbing for the Surmont expansion in 2010, and this year we will be completing the majority of the piling and foundation work and installing our first pipe rack module. First production for the expansion is currently slated for 2015. Combined, these two phases of Surmont will have a production capacity of 110,000 barrels per day. We are also completing a series of optimization projects at the Surmont Phase 1 operation and are in the engineering stage for a significant debottlenecking program. We will continue to look for opportunities to incorporate Surmont, global ConocoPhillips and industry learnings to unlock further improvement. Can you describe the benefits that are seen by stakeholders in this project? We want to develop Surmont in a way that minimizes our environmental impact while Canadian Heavy Oil Association


Photo: ConocoPhillips Canada

Surmont started as a test project—one of the first SAGD pilots in the industry—in 1997. In 2015, it will have commercial capacity of 110,000 barrels per day.

Perry Berkenpas

maximizing benefits for our stakeholders, including local communities, our employees and our shareholders. So far, Surmont has created employment opportunities in the region, and has increased the economic capacity of a great number of local and regional businesses and contracHalliburton tors. That’s not by chance—it’sJCHOA a core focus for all of our developments, present Challenge Q2 and future. For example, our Surmont expansion Heavy H089-11 will benefit Oil communities through employment

and economic development. We’re anticipating about $175 million in local spending over the next five years from this expansion. What environmental achievements have been accomplished? We’re actively investing in research and techhalf pagethat holds promisecreated nology development for reducing 7.0625x4.625 the impacts on air, land and water. We’re focused on a number of attributes that nooverall bleed allowed reduce the footprint.

We have three main areas where we’ve been applying our efforts: improving our water recycle rate, accelerating our land reclamation processes and reducing our greenhouse gas emissions. Cost-effectively reducing our environmental impacts is very important to us. As part of this environmental focus, we piloted the Faster Forests accelerated reclamation program in 2009 to speed up the reforestation of our oilsands leases. While still in its early stages, we think Faster Forests has a lot of potential for restoring the forest more quickly than it would be otherwise. We’re excited about this program’s potential. So far we’ve planted 130,000 trees and are looking to expand this program to create opportunities for local businesses. What would you say are some of the unique characteristics of the Surmont project? In addition to our technological and environmental achievements, it would have to be the people. ConocoPhillips Canada wouldn’t be a world-class oilsands operator if we didn’t place the highest value on the talents and innovative capacity of our employees. Nothing we’ve talked about—none of our big successes— 5.12.11 would be possible if we didn’t have the best people available working on site, in the Fort McMurray offices and in our Canadian headquarters back in Calgary.

“Through thick and thin, heavy oil’s economic challenges don’t have to be a sticking point.” Dense, viscous and asphalitic, heavy oil demands a high degree of expertise to economically develop and produce. Around the world, Halliburton experts have been providing proven “one stop” heavy oil solutions, along with unequalled customer commitment, for over 50 years. What’s your heavy oil challenge? For solutions, contact heavyoilcanada@halliburton.com.

Solving challenges.

HALLIBURTON

© 2011 Halliburton. All rights reserved.

Journal of the Canadian Heavy Oil Association

June 2011

17


thank you 2011 choa sponsors Diamond Sponsors

platinum Sponsors

Gold Sponsors

silver Sponsors

Sponsorship Opportunities

Sponsoring the Canadian Heavy Oil Association provides a significant opportunity to support a multi-discipline, volunteer-based, not-for-profit association focused on heavy oil and oilsands projects and development. The Association has a membership exceeding 1,300 professionals employed in heavy oil exploration and production, service and supply, government, and consulting. Corporate sponsors reach the CHOA membership through: • Recognition as a Corporate Sponsor at CHOA technical events including Technical Luncheons and Beer & Chat functions in Calgary and Edmonton. • Recognition as a Corporate Sponsor at the Annual General Meeting. • L  ogo placement and recognition on the CHOA website, including a “hotlink” to sponsor website. • Logo placement and acknowledgement in the CHOA Journal. • Recognition at the annual sponsor appreciation event. For more information, please contact office@choa.ab.ca.

Disclaimer: The purpose of the Journal of the CHOA is to publicize the Association’s activities and provide an appropriate technical, educational and social forum for those employed in or associated with the heavy oil and oilsands industries. Association publications shall contain no judgmental remarks or opinions as to the technical competence, personal character or motivations of any individual, company or group. Further, technical remarks, opinions and conclusions expressed in articles published in the Journal of the CHOA are those of the author and are not officially endorsed by the CHOA unless otherwise noted. Material contained in the Journal of the CHOA is intended for information use only.

18

June 2011

2010-11 CHOA Board of Directors

President Barry Lappin FMC Technologies Canada Co. 403-232-1141 Vice-President Gerald Bruce MEG Energy Corp. 403-775-1835 Past President and Treasurer Tracy Grills T. Grills & Associates Ltd. 403-208 -1674 Secretary Bill Whitelaw JuneWarren-Nickle’s Energy Group 403-209-3500 Director Fran Hein Energy Resources Conservation Board 403-297-6929 Director Tim Hazlett Alberta Finance and Enterprise 780-427-6679 Director Daryl Wightman Rock Doc Consulting Ltd. 403-830-8007 Canadian Heavy Oil Association


We see the possibilities. Prit Kotecha knows that water is precious. As an Environmental Engineering Specialist at Suncor Energy, he is one of more than 12,000 Suncor employees working hard to protect this resource. Their bright ideas are having a big impact. Our overall water consumption per barrel of oil produced decreased by 31% from 2008 to 2009. A state-of-the-art filtration system supplies our Edmonton refinery with 5.5 million litres of treated wastewater every day, eliminating the need for that amount of fresh river water. Developing these solutions begins with seeing the possibilities. And we’re just getting started.

94

%

In Situ operations annual water recycling rate in 2009

27

%

reduction in surface water withdrawal at oil sands operations since 2004

80

%

of water is treated and returned to the environment in our refining and marketing operations

energy innovation commitment

Find out more about Suncor’s track record and how we are planning to responsibly develop North America’s energy supply. www.suncor.com/sustainability

TM

Trademark of Suncor Energy Inc.

Corp WATER – CHOA (June 2011 Issue): Full page magazine (8” x 10-3/4” page trim), bleeds, 4c. KLVC. May 6, 2011.


Equinox Engineering Ltd. provides complete

EPCM Services for SAGD Pads & Pipelines

Learn more at www.equinox-eng.com Or email sfroggatt@equinox-eng.com


Journal of the Canadian Heavy Oil Association June 2011