Alberta Could Become
First Integrated Energy Economy

Gasification of everything from feedlot manure to oilsands bitumen could be one of the keys, says Dr. Eddy Isaacs of the Alberta Energy Research Institute.

Alberta has the geography and the geology to become the world’s first fully integrated energy economy, says Dr. Eddy Isaacs, managing director of the Alberta Energy Research Institute.

Dr. Isaacs’ vision would see waste products of every energy production process used as a fuel or feedstock for some new energy output or products.

If government and industry could connect up all the dots to form a fully integrated system, he says, Alberta would alleviate the public revenue impacts of declining conventional oil and gas production.

“ Conventional oil production peaked in the 1970s and natural gas is nearing a peak,” Dr. Isaacs says. “That’s a serious threat to future revenues of the province. We need to rethink the kind of technology we should be striving for and the shape of the economy it can support.”

One such scenario would involve the gasification of coal, oilsands bitumen, coke and feedlot manure. Low-emissions synthesis gas (syngas) would feed the petrochemical industry, electrical power generation and other natural gas markets. It could become a source of hydrogen for fuel cells and also meet the hydrogen needs of oilsands upgrading. “If hydrogen costs could be reduced, smaller players could operate on smaller leases in the oilsands because there would be less need for upgrading economies of scale,” Dr. Isaacs suggests. “Producing the oilsands would no longer be just for the biggest companies.”

Carbon dioxide produced by coal gasification could be used to extract large quantities of residual oil from depleted oilfields or to displace coalbed methane from Alberta’s vast coal fields, he says.

“ We have so many resources in our geographic location that the byproducts from one resource can be used to generate another.”

We also need to adapt technology options that use little water for producing bitumen from oil sands, he says. Abundant syngas could be used to heat raw oilsands using a dry retorting process such as the Alberta Taciuk Process, which involves evaporating hydrocarbons out of the oilsands.. Clean sand could then be used to reclaim open-pit oilsands mine sites.

While the Taciuk Process isn’t currently being used in the Alberta oilsands, it is achieving some success in the Australian oil shale industry, Dr. IsaacsIssacs says.
Alberta’s conventional oil and gas reserves are declining, he says. The province has ultimate potential coal and bitumen reserves to meet Canadian energy demands for hundreds of years, even at accelerating rates of production.

Gasification technology and development of coalbed methane could extend gas production — and revenues — almost indefinitely, while carbon dioxide production could also help to revitalize declining oilfields.

Both Chevron/Texaco and Royal Dutch Shell operate several gasification plants, Dr. Issacs notes. Most of these plants are in locations where conventional gas supplies are scarce and correspondingly expensive, but the same situation could soon prevail on this continent.

“ If North America continues to demand gas at current growth rates, prices may rapidly rise to levels that would support gasification projects,” he says. He estimates the point of economic viability for gasification would be around $5 to $7 US per GJ;, a level that we are currently experiencing and that is likely to be sustained into the future. was dramatically, if only briefly, surpassed in the winter of 2000-01. “The era of cheap natural gas in North America is slowly coming to an end,” he says. “That can either be a serious threat to future provincial revenues or the key to a new energy future.”

The critical unknown, he admits, is whether high prices would attract large supplies of competing liquefied natural gas into the North American market from enormous reserves in the Middle East, South America and other regions.

-reprinted with permission from C3 Views, the monthly newsletter of Climate Change Central.

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