Group puts another, greener face on oil sands - July 9, 2009

David Cooper, Edmonton Journal

Five small to medium-sized in situ oilsands companies have banded together to get the message out that they are green firms closer to conventional oil and gas operations than large mines like Syncrude and Suncor.

"When the world thinks of oilsands they think of open pits, but the long-term future of oilsands development in Alberta is in situ, extracting the 80 per cent of the resource that is too deep for mining," said Michael Burt, named managing director on Tuesday of the recently formed In Situ Oil Sands Alliance (IOSA).

Pat Nelson, former minister of energy and minister of finance, was named vice-chair of the industry group that consists of Laricina Energy, Petrobank Energy, MEG Energy, Athabasca Oil Sands Corp. and Osum Oil Sands Corp.

Burt said the group is "ramping up the IOSA bandwagon" with speaking tours across Canada and the U. S.

"This will be to bring people up to speed, so that when they think of oilsands development in Alberta the first question we want out of their mouth is 'are you a mining entity or an in situ entity,'" he said.

With fewer pads hosting multiple wells and using no surface water, Burt says "in situ is now near the environmental vision that everyone has globally. We need people to get off the mindset of mining."

But IOSA isn't out to criticize the mining operators.

"Our job is not to point the finger between mining and in situ and say one is better than the other. They are completely different businesses that cannot be painted with the same brush," he said.

The two industries have different economics, lifespan, technology.

"We are going after the same oil-sand, but that is where it ends."

In situ operators create up to 15 per cent more carbon dioxide than conventional oil and gas operations, primarily because water must be heated to warm the deep reservoirs to get the tar-like bitumen flowing. IOSA hopes new efficiencies will lower that number.

Burt estimates that within 40 years, the oil production from in situ operations will surpass the output from all the oilsands mines now planned.

"In situ will be the conventional oil in Alberta's future as traditional deposits decline," he said.

Already the largest in situ operation is set to produce 70,000 barrels per day (bpd), and most of the new projects will begin in the 30,000 to 50,000 bpd range with the option to go to 200,000 bpd. The three major oilsands mining projects currently produce about 900,000 bpd, but that number could rise about three million in the coming decade.

"The goal of all the members of IOSA is to unlock(oilsands oil) in a safe and environmentally responsible way," Nelson said in a statement. "The innovations our members are implementing to do this should make all Albertans and Canadians proud."