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.

Keystone is not the only Canadian Pipline

Enbridge Pipeline

On Wednesday, July 17th 2013 the Minnesota Public Utilities Commission unanimously approved plans by Enbridge Energy to boost the capacity of the United States portion of their Line 67 (formerly the Alberta Clipper Pipeline) in Minnesota. Enbridge still requires a Presidential Permit to expand their oil shipment across the U.S.-Canadian border and the US State Department is conducting an environmental review of the expansion plan potentially delaying or stalling the pipeline project. This request differs from the Keystone XL request because the pipeline in question is already in place and the request is to increase the capacity by upgrading the pumping stations.

Enbridge intends to spend $40 million to upgrade three Minnesota pumping stations, at Viking, Clearbrook and Deer River, allowing them to push 27 % more oil through the 36-inch diameter Line 67 pipeline, which runs 670 miles from Hardisty, Alberta, to Superior, Wisconsin. With these improvements, the pipeline line will be able to carry up to 570,000 barrels of oil per day. The Minnesota project is part a larger plan by Enbridge to upgrade pipelines in the United States and Canada to ship more Canadian oil from the Alberta oil sands to the Midwest and beyond. The Canadian Association of Petroleum Producers has projected that Canadian oil output will more than double by 2030 to 6.7 million barrels per day, with most of the increase anticipated to be from the Alberta oil sands.

This is the first phase of a two phase capacity expansion for Line 67. Enbridge is planning to ultimately expand the pumping and storage of Line 67 to 800,000 barrels per day, from the current planned increase to 570,000 barrels per day. When the pipeline was initially built as the Alberta Clipper Pipeline in 2010 it was built with the 36 inch diameter pipe that could be expanded with the additions of pumping stations to someday carry the 800,000 barrels per day. Enbridge received approval to proceed with the construction of modifications for the Canadian portion of the project in February 2013 and construction of the improvements in Canada is anticipated to begin this summer.

The Enbridge Line 67 has received less publicity than the Keystone XL Pipeline, but it, too, is controversial to the environmental community. Most of the environmental controversy for this pipeline is simply the further development of the Canadian Alberta Oil Sands. Environmentalists believe that because it takes more energy to develop and process oil sands they will increase the rate of global warming. The Canadian oil sands have been known for decades, but until oil prices rose and technology improved these oil deposits were too expensive to exploit beyond the limited scope of surface mining which could reach only about 8% of the oil sands. Advances in technology in both oil sand extraction and refining techniques and rising oil prices altered the economics and have made the in-situ extraction of oil sand possible. Using Steam Assisted Gravity Drainage (SAGD) combined with horizontal drilling has allowed for in-situ extraction of the oil. These advances in extraction techniques have quadrupled recoverable oil reserves and moved Canada into second place in proved world oil reserves, it requires more energy to produce the oil and increases the carbon footprint of the crude as compared to oil from the Middle East or Brazil.

All current methods of mining and processing the Canadian oil sands increases the CO2 released in every gallon of gas adding to man’s carbon footprint; however Alberta, which contains the vast oil sands deposits, has committed over $1.2 billion to two carbon capture and storage, CCS, projects meant to capture, transport, and store carbon dioxide usually emitted during the oil sands production process. If these projects are completed and successful, they will reduce the carbon footprint of the Canadian oil sands to some extent.

The first project will be built by Shell Oil and it will capture one million metric tons of CO2 from the Scotford upgrader, where oil sands are processed. The Scotford upgrader processes 255,000 barrels per day of diluted bitumen. The CCS project will capture the CO2 from Shell’s oil sands mines, pipe it 50 miles north to injection wells, and then store it more than a mile underground. The Shell project is anticipated to cost about $1.35 billion 60% of which will be paid for by the government. The other CCS project is still in the preliminary planning stage and is called the Alberta Carbon Trunk Line. This project is being led by Enhance Energy Inc. and would take one million metric tons per year of CO2 produced by refineries outside of Edmonton and ship it through a 150 mile pipeline to mature oilfields in south-central Alberta where it would be used for enhanced oil recovery. The costs of this project are not available, but the government has awarded the project $455 million. The two million metric tons of carbon these projects are expected to capture are a tiny fraction of the almost 32 billion metric tons of carbon dioxide released each year from the burning of fossil fuels.