CNR pumps life into advanced CO2 project in Alberta

Venture’s success critical with 11 U.S. states likely to follow California’s low-carbon fuel standards that could undermine U.S. imports of oil sands crude

BY GARY PARK AND KAY CASHMAN FOR GREENING OF OIL

Heavy oil producer Canadian Natural Resources has galloped in like a white knight to scoop up 50 percent of privately owned North West Upgrading, pumping life into what is the world's first venture to supply carbon dioxide for enhanced oil recovery from Alberta's oil sands.

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It starts with a C$4 billion upgrader near Edmonton that could be operating by 2013. The upgrader will use North West’s patented technology to reduce the volume of pure CO2 created by adding hydrogen to heavy oil during the refining process.

The CO2 will end up in the ground through an arrangement with Alberta-based Enhance Energy, where it will be used to squeeze more oil out of old reservoirs, a process known as enhanced oil recovery, and then be stored permanently deep in the ground.

CNR will contribute 12,500 barrels per day of bitumen to the plant and North West hopes to receive another 37,500 bpd from the Alberta government’s royalty-in-kind program—volumes that are expected to be allocated within the next four months.

‘Like an upgrader on steroiods’

Neil Shelley, executive director of the Alberta Industrial Heartland, made up of municipalities in the Edmonton area, described the North West project as being “like an upgrader on steroids, a mini-refinery that takes bitumen and converts it directly to diesel and pumps the CO2 into the Enhance pipeline, so it is a green product.”

He said the success of such a venture is critical for Alberta with 11 U.S. states expected to follow California by imposing low-carbon-intensity fuel standards that could undermine U.S. imports of crude from the oil sands.

Shelley said California plans to ramp up over the next decade to achieve 10 percent ethanol in gasoline, “which means fuel must have the equivalent carbon footprint of that mixture.”

He said the diesel fuel produced by North West would meet or exceed that standard.”

North West Chairman Ian MacGregor said the upgrader should “set a new world standard for environmental performance” by offering its expertise in refining heavy oil.

“With the steps that we are taking to mitigate CO2, ours is a relatively modest-scale refinery, but it is the equivalent of taking 300,000 cars off the road,” he said. 

Possible to capture all the CO2

North West believes its venture will safely dispose of 1.2 million metric tons of CO2 a year.

By using a gasification system for its upgrading and refining, North West said it can efficiently eliminate waste products, such as coke, while reducing natural gas and water consumption.

It said gasification “converts solid or liquid materials into cleaner, usable gases with minimal environmental impact” and enables the production of pure CO2 which is ideal for enhanced oil recovery.

The entire process occurs within a reactor that makes possible the capture of all the CO2 before it escapes into the atmosphere, the company said. 

Opposing views from environmental, science communities 
Clare Demerse, a spokeswoman for the Alberta-based Pembina Institute, a Canadian not-for-profit think tank focused on developing innovative sustainable energy solutions, said the benefits of sequestering, or storing, CO2 are not yet certain.

“We don’t have any clarity around the net environmental benefits and whether, at the end of the day, the technology is capable of reducing greenhouse gas emissions,” she said.

Malcolm Wilson, Ph.D., director of the Office of Energy and Environment at the University of Regina, disagreed with Demerse.

“The storage of CO2 in the subsurface clearly is reducing emissions and the CO2 will stay where it is put for the most part. …The technology is pretty well proven with projects like Weyburn and storage projects like Sleipner in the North Sea,” Wilson told Greening of Oil, pointing to the 2005 special report on CCS by the Intergovernmental Panel on Climate Change.

The panel, established by the United Nations Environment Programme and the World Meteorological Organization to provide the world with a clear scientific view on the current state of climate change and its potential environmental and socioeconomic consequences, is the leading international body for climate change assessment.

Wilson said CCS technology has proven itself as an effective tool in reducing greenhouse gas emissions. 

Links of interest

North West Upgrading

Canadian Natural Resources

Alberta Industrial Heartland

Pembina Institute

Intergovernmental Panel on Climate Change

Office of Energy and Environment, University of Regina

Contact Kay Cashman and Gary Park at publisher@greeningofoil.com