Pop quiz! From what country does the US import the most oil: Saudi Arabia? Venezuela? Mexico? Think again. In 2006, Canada exported 2.3 million barrels per day (mmb/d) of crude oil and refined products to the US, making it the Number One supplier of imported energy to our southern neighbour.
And the trend continues. Canada is exporting a record level of oil products to the US this year despite the drop in American demand since the recession.
Oil sands production, a significant contributor to Canada’s oil exports, is expected to climb from 1.2 mmb/d currently to about 4 mmb/d by 2020, according to the Calgary Energy Research Institute (CERI), a not-for-profit research agency supported by industry, provincial and federal governments. It predicts this growth in capacity will attract annual investments of between $20 billion and $30 billion.
Encana’s Christina Lake in situ oil sands operation where it uses steam-assisted gravity drainage to bring bitimen to the surface.
Such growth in fossil-fuel production has drawn the protests of environmental groups who say Alberta oil sands consume enormous amounts of water, destroy the Boreal forests, harm wildlife, create toxic tailings ponds contribute to greenhouse gas emissions by intensifying the energy used to create each barrel of oil by depleting natural gas reserves.
Indeed, oil sands production accounted for 12% of Canada’s natural gas consumption in 2006, according to the United States Energy Information Administration. That percentage is expected to grow to 22% by 2030.
Against this backdrop, North American energy giant EnCana is planning to pilot a bitumen extraction process at one of its in situ reserves that it says will improve oil recovery by 25%, lower operating costs, reduce its consumption of natural gas by 30% and produce fewer harmful carbon emissions.
EnCana is a pioneer of enhanced oil recovery processes. At its in situ mines at Foster Creek and Christina Lake in northern Alberta where it produces 800 and 1,000 barrels per day respectively, the $55-billion company was the first to commercialize oil sands production using steam-assisted gravity drainage or SAGD. Water is used to create steam heated by natural-gas boilers. The steam is continuously pumped into the upper of two horizontal wells and the steam moves into the sand, the bitumen is heated, allowing the oil to move more freely. Gravity then drains it into the lower well where it’s pumped to the surface.