Monday, August 4, 2014

Tar Sands Mining Comes to Utah

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As the controversial TransCanada Keystone XL pipeline lingers in political limbo, inroads have been made in developing tar sands (also known as oil sands) resources in the United States. A Canadian tar sand processing company now known as U.S. Oil Sands Inc. has begun building a tar sands extraction and processing operation in Utah. This first project consists of 213 acres leased from the Utah State Institutional Trust Lands Administration, straddling the boundary between Uintah and Grand Counties, Utah. The project will consist of open-pit mining of tar sands, extraction of bitumen using d-limonene (a proprietary solvent); and storage of processed sands, processed fines and waste rock in the mine and two additional storage areas, totaling 70 acres in size. The mine will extract tar sands as far as 150 feet below the surface.

Much of the world's oil (more than 2 trillion barrels) is in the form of tar sands, although it is not all recoverable with current technology. While tar sands are found in many places worldwide, the largest deposits in the world are found in Canada (Alberta), Venezuela, and in various Middle Eastern countries. However, we do have large deposits of tar sands in the United States. These tar sands deposits are primarily located in Eastern Utah, mostly on public lands, both state and federal. The U. S. Geological Survey estimated the Utah tar sands oil resources to be 12 to 19 billion barrels of oil.
Tar sands
US Oil Sands Inc. has two project areas in Utah: PR Spring Project Area and Cedar Camp and NW Project Area. The PR Spring Project Area which consists of 5,930 contiguous acres; and a portion of this lease is the site of the approved and permitted surface mine development project that is now under construction. The initial project will produce 2,000 billion barrels per day of bitumen and first-oil and is expected to begin operations in 2015. The Cedar Camp and NW Project Area holds leases in 26,075 acres of exploration land which is to be assessed for future development.

The company was incorporated in 2003 as Earth Energy Resources Inc. and demonstrated their tar sands extraction process on the basis of a 150 billion barrel per day test unit. The company filed for an international patent in 2004, after demonstrating a six hour continuous trail. In 2005 the company acquired 2,562 acres and 50 acres of the PR Spring Project area and demonstrated their process in the field in Uintah County, Utah. From 2005-2009 the company now called U.S. Oil Sands continued to raise capital, develop their proprietary tar sands extraction process, characterize the mining site and obtain permits. Their process is reportedly a less energy and resource intensive than the Clark Hot Water Extraction Process developed in the 1920s by Dr. Karl Clark and the Alberta Research Council. The Clark process was first put into commercial production in 1967 by the Great Canadian Oil Sands Limited, now Suncor Energy Inc.

Further advances in tar sands technology in both oil sand extraction and refining techniques and rising oil prices altered the economics and made the commercial extraction of tar sands possible, but it still requires more energy to produce crude oil from tar sands. The Canadian tar sands mining and processing using Steam Assisted Gravity Drainage (SAGD) method still increased the CO2 released in every gallon of gas adding to the carbon footprint of the oil. In addition, older methods of mining the tar sands left open pits many that need to be reclaimed. The SAGD method in use in Canada allows groups of wells to be drilled off a central pad and like fracking wells and can extend for miles in all directions. This reduces surface disturbances of the land and the footprint of the area to be reclaimed, but increases the need for steam. This additional energy increases the carbon footprint of the tar sands produced crude as compared to conventional crude or fracked light sweet crude from Montana.

The U.S. Oil Sands extraction process uses a non-toxic bio-solvent derived from citrus products. This new process reduces the mechanical energy needed to process tar sands, eliminates liquid tailings and the “middling” phase. This new process eliminates all of the capital cost and operating expense associated with creating bitumen froth, froth treatment, middlings treatment and tailings pond management and reclamation that is necessary with the Clark process. I could not find the energy profile of the resulting crude to compare to traditionally produced crude oil or Clark processed tar sands, but the new process is less polluting, recovers 98% of the bio-solvent for immediate reuse and 95% of the water for reuse. The environmental impact of the Utah tar sands needs to be examined carefully in this first U.S. operation.

As part of its panned development of tar sands in the United States, US Oil Sands leased the land in the PR Spring Designated Tar Sand Area of the Uinta Basin from the State of Utah School and Institutional Trust Lands Administration (SITLA), paid all lease payments since 2005. Since that time the company has been raising money, delineating the bitumen resources on its leases and characterizing ground water resources (or lack of them) in the vicinity, developing its process, permitting the PR Spring Mine and fighting legal challenges.

Last June the Utah Supreme Court dismissed the only outstanding regulatory challenge against US Oil Sand’s first PR Spring Mine project. The Court found that the groundwater discharge permit-by-rule originally issued in 2008 by the Utah Division of Water Quality was correctly issued based on the conclusion that the Company’s extraction process would have a "de-minimus" or negligible impact on ground water quality because the zone of saturation known as the Mesa Verde aquifer is 1,500 to 2,000 feet below and surface in the project area and the project will only mine to a depth of 150 feet below grade.

It was agreed by the environmental group that the U.S. Oil Sands project posed no threat to the deep, regional aquifer. The issue has been the potential presence of shallow ground water that may be affected by the project. However, during the summer of 2011, the company drilled 180 holes in and around the mine site, with a dense grid of 55 holes within the project area, drilled to a depth of 305 feet, more than twice the depth to which the company plans to mine. No groundwater was found.

In addition, the subsurface consists mostly of interbedded and impermeable shale, siltstone, and mudstone with almost every sand zone wholly or partially saturated with bitumen creating in effect a geologic tar roof for the subsurface. In effect there is no recharge area in the areas of heaviest bitumen concentration. The Judge upheld the permit and dismissed the case. With that win in June the US Oil Sands Inc. began construction on July 24th 2014.
from U.S. Oil Sands Inc. 

In addition, the U. S. Bureau of Land Management is planning to offer federal leases on 2,116-acre tar sand parcel in eastern Utah’s Asphalt Ridge area near Vernal, Utah.

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