From Stantec ERA: What are the options for Alberta’s oil sands in a low-carbon future?

June 18, 2019 Nathan Ashcroft

Our recent study with Alberta Innovates on the future of the oil sands showcases the strong potential of bitumen products and how it can diversify the economy

 

Alberta’s oil sands are the third-largest oil reserves in the world and their value as a source of combustible fuels has few parallels. But the long-term future of the oil sands is uncertain. Governments and industries are contemplating moving their energy sources away from oil. The Alberta oil sands are a unique resource though. They could change the way the world uses oil.

That’s the intriguing, top-line conclusion of a detailed assessment conducted by Stantec and a team of leading industry partners, in support of Alberta Innovates’ Bitumen Beyond Combustion (BBC) project. Bitumen is a thick, sticky mixture of hydrocarbons, with a uniquely high content of a complex molecular structure—asphaltenes.

 

The Cenovus Energy Foster Creek Processing Facility in Alberta. Stantec has worked collaboratively at the facility since 2010.

 

Initiated in 2016, the BBC project’s goal is to identify new and future markets for non-combustion products derived from bitumen. It also aims to reduce the environmental impact of greenhouse-gas emissions associated with the industry and convert troublesome “bottom of the barrel” bitumen components into valuable building blocks for other products.

The study focused on the four product areas with the most potential, based on initial BBC research—carbon fiber, asphalt, vanadium flow batteries, and polymers. We evaluated each on market potential and business case to 2030, current sources of supply, social acceptance, technology readiness, and other factors.

 

Read and download Stantec era: The Energy Remix

 

Bitumen can be the building blocks for many products—Carbon fiber

Carbon fibers may be the future for many everyday products. It is an ultra-strong, ultra-light material used in aerospace, military, wind turbines, and automotive applications. The present market, estimated at about $3 billion, is limited by the high cost of the raw material.

Our study confirmed that the sticky, heavy, high-carbon asphaltenes that makes up about 20% of bitumen’s content—and which are currently a waste product—can be processed to produce carbon fiber at a fraction of the current cost. A much lower price point opens the door to introducing carbon fiber into some huge global markets—replacing steel rebar with chopped carbon fiber in concrete, substituting it for steel in manufacturing and construction, or integrating it with chip board and other wood products.

The goal of the BBC project is to ensure any new investment will still use 100,000 barrels per day (bpd) of Alberta’s bitumen. All the carbon fiber options exceed this significantly. For example, if carbon fiber replaced just 1% of the global steel market (1.6 billion tons a year), it would require approximately 500,000 bpd of asphaltenes—nearly the entire quantity being produced in Fort McMurray today.

Alberta Innovates has already committed to applied research that will move this potential option forward. Momentum is building.

 

Our study confirmed that the sticky, heavy, high-carbon asphaltenes that makes up about 20% of bitumen’s content can be processed to produce carbon fiber at a fraction of the current cost.

 

Bitumen can be the roads we drive—Asphalt

Asphalt is a global commodity used chiefly for roads and roofing. While the need for asphalt is global, its production is done locally. The reason: to remain workable, asphalt must be heated to a temperature of more than 150° C. Moving it by rail or ship is possible, but if the asphalt cools and hardens, it must be reheated in a slow, complicated, and expensive process before delivery. 

In Alberta, bitumen is already used to make consistently high-quality asphalt, thanks to its relatively low amounts of impurities. These attributes make it a desirable product in the $50-billion global asphalt market—if the transportation challenge is overcome. To that end, our assessment determined that several technologies show promise in converting asphalt into sealed pucks, pellets or balls that can then be shipped in the same fashion that coal is today. Asphalt in this form would be immediately cost competitive and potentially be able to be shipped all around the globe, our report recommends further investigation of this opportunity.

 

Globally, there is a $50-billion asphalt market. In Alberta, bitumen is already used to make consistently high-quality asphalt, thanks to its relatively low amounts of impurities. 

 

Bitumen can be energy storage—Vanadium-flow batteries

We hear it all the time. Renewable energy sources like wind and solar power can’t supersede traditional power sources until we solve the energy-storage problem.

One of the solutions to this problem are rechargeable flow batteries made with vanadium electrolyte. It also happens that oil sands bitumen contains significant quantities of vanadium, and when that bitumen is processed, it becomes highly concentrated in waste fly ash and coke. The quantity of vanadium present is substantial, technologies are in place to extract vanadium from fly ash, and vanadium demand is expected to grow significantly by 2030, so the potential is there.

However, our overall assessment is that this market may be tough to crack, as the extraction technology is not yet economical and existing vanadium sources may be better suited to fill the growing demand.

 

_q_tweetable:It has strong potential to help diversify Alberta’s economy and contribute to the long-term viability of the oil sands._q_

Bitumen can be a clean plastic—Polymers

Polymers were included among the four products with the greatest potential because of the market’s size—estimated to be nearly $1 trillion a year by 2030—and the fact that it is changing dramatically as efforts to control plastic pollution build and biodegradability of plastics enters a new era. However, our study found that the business case and competitive barriers limit any immediate opportunities for oil sands products. But with a sea change underway, it would be imprudent not to keep looking for opportunities.

 

Bitumen’s potential

In the period since Stantec first published the results of this report, it’s become clear that bitumen’s potential is capturing people’s attention and imagination. And rightfully so. It has strong potential to help diversify Alberta’s economy and contribute to the long-term viability of the oil sands. Our goals are ambitions, but our vision is strong. There is immense potential for Alberta.

About the Author

Nathan Ashcroft

Nathan Ashcroft is a strategic business developer, searching out big concepts and global changes and figuring out how to adapt our business development strategy to align with a changing world. He’s often involved in expanding services with existing clients or finding new ways to bring Stantec services to customers around the world.

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