Canada as an energy superpower

Ed note from PG: I am happy to announce that TOD:C is up and running again (and I believe overdue thanks are in order to Stoneleigh and Ilargi, now over at The Automatic Earth, for their efforts here). One of the new editors is benk (and I believe you already know Khebab!).

Ben is completing his Ph.D. in Chemical Engineering in Canada. His research focuses on the fine details of solid oxide fuel cells, dealing with ceramics and long equations. He attributes his initial interest in energy to the documentary "The End of Suburbia," which he first saw about 4 years ago. Since then he has felt a duty to get the good word out. Ben has been the host of theWatt Podcast talking about various energy issues, a capacity we are exploring bringing the TOD. Welcome Ben!

To get TOD Canada rolling again, I've written a refresher on Canada's energy situation. Canada can't be ignored when it comes to energy. We are a land of plenty. Lots of land, lots of weather, lots of consumption, lots of production. Plenty can easily become scarce though and it has to be managed, and managed well. Management of our resources will be Canada's challenge in the years ahead. Unmanaged, Canada's energy consumption is close to the highest in the world and stands at 350 GJ/person, slightly more than in the U.S. and Canada's energy intensity is the worst in the G7 at 10.6 MJ per unit GDP.

It's wrong to average Canada's energy situation though. Even neighboring provinces have vastly different stances: British Columbia has implemented North America's first consumer based carbon tax and is joining the Western Climate Initiative's cap-and-trade system while Alberta's Premier is still talking about bird kills by wind turbines. On the East Coast, New Brunswick has the largest Canadian refinery (288,400 bpd capacity) producing 45% of all U.S. reformulated gasoline imports, is building a new LNG terminal and has plans to become an energy hub for the Eastern U.S. by building a second 300,000 bpd refinery and a second nuclear reactor, both to be used exclusively for export to the US. Energy exports are a huge part of Canada's economy, accounting for 20% ($90 billion) of Canada's total exports in 2007.

From the federal perspective, Canada's government has publicly stated that they are positioning Canada as a "reliable energy superpower". This is the closest we have to a national energy policy. The wording here is important: By definition, energy superpower implies at least two things: 1) multiple customers 2) willingness to use energy supply as a negotiation tactic.

As far as energy superpowers are concerned, Canada still has a long way to go. Multiple customers are difficult to come by for a country with a single border. As far as "reliable energy superpowers" are concernerd, I recon Canada's just about there, we have no choice but to be reliable.

That being said, Canada is slowly gaining courage with respect to criteria #2 of an energy superpower: Our trade minister, David Emerson, recently suggested that he's willing to use the energy card after Hilary Clinton's and Barack Obama's talk of renegotiating NAFTA, Emerson let this out:

"Knowledgeable observers would have to take note of the fact that we are the largest supplier of energy to the U.S. and NAFTA has been the foundation for integrating the North American energy market," said Emerson.

So, what can Canada offer?

Canada's credentials:

Having energy resources isn't enough to be an energy superpower. Those resources have to be exported. The National Energy Board just released the Canadian Energy Overview 2007. From that document, I've put together a graph of Canada's average 2007 energy exports to the US:




Note: Here I assume all types of oil to have the same energy content

Even 30 TWh/year of electricity can be significant to small parts of North Eastern United States but obviously Canada's role as an energy supplier to the US is most important through natural gas and oil exports. The future of natural gas in Canada has been discussed on TOD before as well as Canada's tar sands. What makes Canada's energy situation so fascinating is the coupling between energy sources.

In the table below, I've ranked Canada's energy resources against the rest of the world and compared them with Russia's (a real energy superpower) using the latest stats from the BP Statistical review. It sheds some light on Canada's true situation:

Canada's Rank Russia's Rank
Oil Reserves 2 or 12* 7
Oil Production 7 2
Oil Consumption 8 4
Oil Exports 14 2
Natural Gas Reserves 21 1
Natural Gas Production 3 1
Natural Gas Consumption 4 2
Natural Gas Exports 2 1
Coal Reserves 13 2
Coal Production 15 5
Coal Consumption 14 5
Coal Exports 17 5
Uranium Reserves** 2 10
Uranium Production** 1 -


* BP Statistical Review only considers Canada's oil sands reserves to be those currently under development. Governments don't.
** Src: World Nuclear Association

Alone, Canada's energy resources, other than oil and uranium reserves, don't look to be particularly impressive. A large part of Canada's success as an energy superpower though is its ability to develop its resources. At any cost.

My first observation after compiling the above table was that Canada ranks 21st in the world in terms of natural gas reserves, but production, consumption and exports all rank in the top 4. Here lies the energy coupling challenge: In order to exploit our oil reserves, of which we have a lot, we are further depleting our natural gas reserves, of which we have few.

For each barrel of synthetic crude coming out of Canada from strip mining, 28 cubic meters of natural gas is used (this source claims 14-28 cubic meters). This means America is sacrificing roughly 1.14% of it's natural gas supply to import synthetic crude oil. For Canada though, converting NG into oil is economically a no brainer: at $125/bbl, we get $22/GJ for oil compared with the current going rate of $11/GJ for natural gas. Alternative methods like the nuclear option for upgrading bitumen do exist. In March, Bruce Power Alberta filed an application for a 4GW nuclear reactor for the tar sands, but if it goes through, would only come on-line by 2017.

To conclude, Canada is the most important energy supplier to the US. Canada has ambitions to become an energy superpower, which means that finding a second customer is likely a priority. But Canada's natural gas could quickly become a rate determining step in these ambitions and so resource management is the challenge that Canada will have to address if it is truly going to become a reliable energy superpower.

Good overview. Now, having energy to export today is one thing; what is the state of the Western Gas Fields over the course of the next 5 years?

Here's a pretty good overview by Libelle on that topic: http://canada.theoildrum.com/node/2157

I'll see if there's any new info on this from the NEB.

About a quarter of the worlds undiscovered NG resources are thought to be in the Arctic, where Canada's announced policy emphasizes sovereignty and economic development. I agree a more explicit energy policy is needed.

This is my first post on the oil drum, although I have been reading it for quite some time. Much of Canada's supply growth is attributed to the eventual tie in of the Mackenzie and Arctic gas. From everything I have seen, this is very unlikely to happen any time soon unless mandated by the Federal government.

In the WCSB, the production growth story is very challenging. Most of the gas in the WCSB is currently produced from Alberta, whos production has fallen by over a bcf/d since peaking in 2001. The Alberta government has predicted a 2.5% yearly decline, however this was based on continued high levels of drilling activity. Drilling for gas in Alberta has fallen off dramatically in the last several months due to royalty changes, high service costs, diminishing opportunities, the strong canadian dollar, and changes to income royalty trust laws. Because of this, it is likely that production will fall off at a rate greater than 2.5%/year.

Most of the rest of Canada's production comes from BC's portion of the WCSB. Production here has plateued over the last couple of years, however it may grow due to development the large "shale gas" plays that have recently been announced. Despite the potential, it will be very challenging to build all the infrastructure required to support significant growth in BC. I personally do not believe that it can offset the production declines that will be seen in Alberta.

The NEB (national energy board) forcast has Canadian gas production falling to 15bcf/d by 2009. At this time, it is estimated that canada will require about 9 bcf/d. Interestingly, the NAFTA proportionality clause dictates that Canada export 56% of its gas to the US. You will notice that the remaining 44% of 15bcf/d only amounts to 6.6 bcf remaining for domestic supply (about 2.4 bcf/d short). This problem will be worsened by continued growth of oil sands demand, and continued switching from coal to natural gas for power generation (especially in Ontario). If my understanding of the facts are correct, it seems that Canada might not be currently meeting its NAFTA requirement, and will certainly not have the ability to do so in the future (energy super power indeed!)

Canada badly needs its own strategic energy plan, however public and political awareness of this issue seems to be very small. The public is more focused on environmental issues and "excessive" corporate profits. If attitudes remain similar in the future, I see higher taxes on gas producers and continued eroding of supplies.

I definitely agree that Canada needs a comprehensive energy plan, but I do cling to the (probably naive) belief that Canada will ignore the proportionality clause if things really get tight. The way the US blatantly scoffs at their obligations under trade agreements I think we have earned a smidgen of leeway to keep from 'freezing in the dark' (of course a west-east pipeline network is a necessity). Also, the probability of another Albertan hissy-fit seems remote because energy prices will remain high this time and I think that it's well recognized that the 'Bloc Albertois' experiment didn't pan out particularly well.

For now though it seems the east is pinning it's fortunes to this LNG terminal in Quebec City that is rife with problems.

I quite liked Linda McQuaig's article from The Star from a year or so ago calling Canada an 'energy pussycat.'

http://www.thestar.com/article/238985

Hey! That's "Block Albertexas"! ;) None of that Frenchy crap is allowed out west.

I was still quite young when the NAFTA agreement was signed (1994?) and thus obviously laregly uninterested in it at the time.

I wonder if anyone knows the behind-the-scenes thinking of that proportionality clause... I am assuming it was a US backed part of the agreement so that we could not cut back supplies once we started exporting them and once America had become reliant on them, is this correct?

Anyone have any extra info on this proportionality clause?

I too was quite young at the time but my father was a top aide to John Turner* who vociferously decried the proportionality clause as well as several other not-so-Canada-friendly tidbits in NAFTA. Turner is a family friend so I'm obviously biased, but I think Canada really missed out by hopping on the Thatcher-Reagan bandwagon with Mulroney. Turner really suffered from a surfeit of integrity and the general feeling of malaise towards the Liberals after 15+ years of Trudeau. As a fly on the wall I was always amused when they hit a stumbling block in the speech-writing process, Turner would say: "Oh well, we can always retreat to our last refuge -- in the truth."

*disclaimer: I vote Green, but my family is VERY Liberal, teeming with staffers, campaigners, etc.

Some reading:
http://www.energybulletin.net/40035.html
http://www.embassymag.ca/html/index.php?display=story&full_path=/2007/ju...
*PDF* http://www.canadians.org/energy/documents/Laxer_presentation_Oct07.pdf

The NAFTA agreement was initiated during Mulroneys term and ratified under Chretien. At the time, natural gas production was still rising. I think that most people felt that it would continue to do so for quite some time (maybe these were the same folks who now work at the IEA)

In addition, the large deposits in the Arctic and Mackenzie delta region had been found in the early 80's. I think most people felt that these would be put on stream sometime in the not too distant future. It seems like 10 years ago, people thought it would be 10 more years till they were on prodution. I think that in 10 more years we will still be saying we are 10 years away. In either case, these supplies will be hard pressed to make up for the short fall in Alberta.

It's much like the American situation where the North slope discoveries were touted as a find that would help to mitigate the 1973 peak, however the reality was that the north slope was only a slight blip on the overall decline.

The NAFTA Proportionality clause Article 605 is often misunderstood. It comes into effect only if the Federal Government of Canada (or of the US) undertakes to implement measures to limit exports. As long as the governments refrain from intervening in the North American energy market, there is no proportionality requirement. Decisions to export oil or gas from Canada to the US are entirely made by producers and suppliers, subject to regulatory approval by National Energy Board and the Alberta Energy Resources and Conservation Board, primarily for environmental and safety reasons.

The political effect of Article 605 is to severely limit the power of the Federal Government to intervene in the primarily Albertan energy industry, something Albertans wanted to prevent another National Energy Program. My guess is that the FTA negotiations were based on trading US access to Canadian energy for Ontario and Quebec access to US markets for manufactured goods. In effect, Eastern Canada gave up energy security for (supposedly) free access to US markets.

Interestingly, it appears that the Government of Alberta has recently taken steps to remove what may people believe is a requirement that the ERCB (successor to the EUB) hold in reserve 15 years supply of natural gas for Albertans before permitting exports. The 15 year rules appears to never have been written in law, but to be only an interpretation of the clause in the Gas Resources Preservation act (amended 2008) which requires that

Limitations on granting of permit
8 The Board shall not grant a permit unless in its opinion it is in
the public interest of Alberta to do so having regard to
(a) the present and future needs of persons in Alberta,
(b) the established reserves and the trends in growth and
discovery of reserves of gas or propane in Alberta, and
(c) any other matters considered relevant by the Board.
1984 cG-3.1 s5;1986 c17 s3

The EUB interpreted the clause to mean that "core consumers" needs should be met for 15 years before gas could be considered surplus and available for export from Alberta (to the rest of Canada or the US). The term "core consumer" was referenced in the Gas Resources Preservation Act and defined in Gas Utilities Core Market Regulation (AB 44/95):

Classes of consumers
3 Consumers are classified as follows for the purposes of this
Regulation:

(a) Class 1: Industrial Consumers, consisting of consumers who use
or consume gas at a location primarily

(i) as a raw material, or

(ii) as a fuel, whether for space heating, water heating
or otherwise,

in an industrial or manufacturing operation;

(b) Class 2: Alternate Fuel Capability Consumers, consisting of
consumers who have sustainable access to, and facilities that allow them to
use or consume, a source of energy, other than gas, in quantities
sufficient to satisfy the requirements for which gas would otherwise be
consumed by them;

(c) Class 3: Core Consumers, consisting of consumers other than
those within Classes 1 and 2.

According to EUB, core consumer consumption is less than about 18% of total Alberta Consumption (See Energy Utility Board report EUB ST98-2007, calculation of available for export).

Since the regulations that define core consumers have been repealed, it is no longer clear that there is any restriction on export of natural gas from Alberta, as of 2008.

Thanks a lot for finding this... I was looking for the text yesterday but couldn't get it.

Thanks for posting that. Most people I talk to in the industry have had little input on the subject. I suspect that the complexity of the agreements wording is part of the problem for most people. It certainly was for me, though it seems clear now. It certainly cheapens the credibility of some of the research bodies (ie. parkland institute), who have been publicly decrying the agreement for the (misleaded) reasons i mentioned in my previous post. Other prominent researchers have also apparently misunderstood the agreement (e.g. Richard Heinberg http://www.dogwoodinitiative.org/EB-2008-02-07-prop). As is the case with alot of other work, it makes one aware that you must really question all of the data behind any opinion/analysis.

Did you have a link for where the 56% was specifically mentioned? I could not seem to find it in the site you posted a link for.

There won't be any specific mention of a percentage in the NAFTA agreement as it is determine by a rule.

If Canada were to impose an export restriction on natural gas (or any other defined petroleum product), it could do so only if maintains an export level greater than or equal to "the proportion prevailing in the most recent 36-month period for which data are available prior to the imposition of the measure, or in such other representative period on which the Parties may agree".

The 56% figure given for natural gas would be based on the recent level of exports.

Further, the percentage is based on "total supply", which the agreement defines to be domestic production plus imports. This would be interesting if LNG terminals are established in Canada for gas that is solely destined for export to the US (as has been the case in several proposals).

I believe that the Parkland Institute is quite aware of specifics of the Proportionality article, but the media are not. No doubt Parkland's message has been somewhat distorted by the media's penchant for dramatic sound bites.

Parkland has been trying to raise the awareness of Canadians, especially in Eastern Canada, about Canada's lack of a domestic energy policy and in particular our loss of energy sovereignty. Most Canadians are complacently unaware of our true energy situation and the risks we are running. Their recent paper calling for the establishment of a Canadian SPR got considerable attention in Quebec, the province that is most dependent on foreign imports.

I don't know whether you have the time/resources, but if you could put together a 'keypost' it would be much appreciated... It is disturbingly rare to come across someone who has any worthwhile knowledge of Canada's energy situation.

Anyways, if nothing else, thanks for the input.

Encana happens to be doing both the Weyburn CO2 injection and oil recovery and is major player in the new BC natural gas. I analysed Encana's latest conference call.
http://nextbigfuture.com/2008/05/canadas-natural-gas-and-co2-stimulated....

The Encana portion of the Montney has 500 million cf to 1 billion cf a day long-term potential. [35.3 cubic feet in one cubic metre, so that amount would be 14.16 million to 28.3 million cubic metres/day, 3-6% of Canada's total natural gas production] They currently are getting 120 million cf/day.

New natural gas finds in Canada:
- Ootla, about 60 miles from Fort Nelson in northeastern British Columbia, may hold 9 trillion to 16 trillion cubic feet of gas. Horizontal wells test flowed at rates of 8.8 million cubic feet, 6.1 million cubic feet and 5.3 million cubic feet of gas a day.
- Montney find in BC (50-80 trillion cf)
- the Horn River basin (12+ trillion cf.)
- Quebec Utica Shale based on some of the Canadian-based research on the play to date the size of the resource is being estimated between 24 and 30 trillion cubic feet of natural gas.
- Smaller but significant find of 1.6 tcf in Southern Ontario

The total new reserves are 97 tcf to 140+ tcf. If they were developed with production rates proportional to Encana's efforts then they would provide 8 bcf/day to 22 bcf/day. The current projection if for Canada to produce 15 bcf/day in 2009 [5.5 tcf per year]. So these new finds appear likely to reverse the decline in Canada's natural gas producton.

Weyburn has 10 million tons of CO2 sequestered and Encana projects 30 million tons.

bear in mind that there are severe infrastructure constraints for all of these new resources. In addtion, the numbers quoted by the companies are more commonly the resource size rather than the reserve size. 20 to 50% of these numbers might be more appropriate as ultimate recoverable reserves. Encana has been quietly developing their Montney resource for several years, however this has not had a significant impact on BC's production rate. These plays are promising, but in some ways are similar to the enormous "reserves/resources" attributed to some of the oil shales. (i.e. they may be too energy intensive to develop to their full extent)

Canada has found significant amounts of natural gas in BC and Quebec recently. BC is the most active area for new natural gas finds.

The company said its stake in Ootla, about 60 miles from Fort Nelson in northeastern British Columbia, may hold 9 trillion to 16 trillion cubic feet of gas. Horizontal wells test flowed at rates of 8.8 million cubic feet, 6.1 million cubic feet and 5.3 million cubic feet of gas a day

This natural gas plus the Montney find in BC (50-80 trillion cf) and the Horn River basin (12+ trillion cf.)

Quebec also has a large natural gas find. The Utica Shale based on some of the Canadian-based research on the play to date the size of the resource is being estimated between 24 and 30 trillion cubic feet of natural gas.
http://nextbigfuture.com/2008/04/canada-new-natural-gas-finds-and-new.ht...

http://nextbigfuture.com/2008/04/some-natural-gas-and-oil-plays.html

Weyburn in Canada did have a fairly large scale CO2 sequestering injection project starting in 2000. 8 year $80 million project. they injected 7 million tons of CO2. 18000 bpd of incremental oil recovery because of CO2 injection. Expect to get 155 million barrels extra. 3.8 billion incremental barrels of oil in western canada from CO2 injection.
http://www.encana.com/wcm/groups/internet/@p_www/documents/web_content/p...

Smaller but significant find of 1.6 tcf in Southern Ontario last month
http://www.marketwire.com/mw/release.do?id=850361

DOE also CO2 injection projects. Kansas and other places. Also looking at Texas.
http://www.fossil.energy.gov/programs/oilgas/eor/index.html

The BC government took in 441 million from this month's auction of land rights in northeastern BC, a record for one month and indicative of the interest in finding new gas.

Great to see the Canadian perspective on Peak Oil back up for discussion.

Those Natural Gas rankings are scary... we might need to do something about that soon.

This renegotiating of NAFTA could help us out a lot, with the weak economy and dollar in the US, we will have an extra advantage, being that they are desperate.

If they want to renogotiate a policy they have abused, and one that we probably should have read a little more closely before signing (i.e. continuous export levels), then I say we take it to them, after all, we're just "little Canada", how much of an impact could we have on the giant US economy anyways? (insert sarcasm here)

The thing is though, I don't think we have much negotiating power unless we can find a 2nd customer. Energy exports are such a huge part of our economy. I think that the US essentially considers Canada to be an extension of themselves with a lower concentration of NIMBY's, which would explain a lot about what's going on in NB right now. Also, one thing that I didn't talk about was fresh water. Water is definitely something that could also cause some major tensions.

A lot of people think we can sell it all: natural gas, oil and water but very soon it'll be either natural gas and water OR oil.

Good point about the Water exports.

A second customer would be invaluable in negotiating with the US, do you know if any efforts are being made to court China or India, both of whom are lacking resources and have become net importers? I know China likes to keep to themselves, but their coal shortage is going to be a huge problem for them. I know they have an amazing resource of it, but getting it out of the ground in time to fuel their reactors (are they still building one per day?) may be a problem. I recall reading they have maybe 1 or 2 days buffer supply at most reactors.

Any possiblity we can increase our coal production to take advantage of a coal-hungry China? Perhaps this will lead into a trade agreement for other FF's that can put pressure on the US to treat us as an "Energy Superpower" instead of playing hard ball with our lumber and power exports.

I'm not exactly sure what's going on wrt China. China has invested in some oil sands projects, so maybe that's the direction China would rather go: make money off of oil sands instead of actually secure oil supply. I'm not so sure how easy it would be to set up a consistent oil supply from Alberta to China.

As far as coal goes, as long as an environmental policy is uncertain, I can't see much being done on that front until people start to realize NG is a real issue. Alberta has filed applications for 4GW of nuclear power plants for the oil sands but that won't come online until 2017 at the earliest.

First off thanks a bundle for taking over the reins at TOD Canada, I look forward to a forum where I can talk Canada without having to provide ten background paragraphs explaining where Moose Factory, Ontario is (as an example).

According to Wikipedia, Sinopec has plans for a 100,000bpd tar sands project, but it has been delayed indefinitely. Also, who knows if that oil was actually going to flow back to China (as you pointed out they may have just wanted to get in on the bonanza). I think development of the Asia Pacific Gateway infrastructure is necessary before we can realistically begin meaningful exports to non-US countries.

While I'm at it, where does the majority of Atlantic offshore oil end up?

Relevant articles:

http://en.wikipedia.org/wiki/Athabasca_Oil_Sands
http://en.wikipedia.org/wiki/National_Energy_Program
http://www.asiapacificgateway.net/about/index.cfm

AND just for fun, a great analogy for poor misunderstood Canadians:

http://www.theonion.com/content/news/stackley_cup_playoffs_underway

Just as long as it's not natural gas and water or oil OR beer.

The thing is though, I don't think we have much negotiating power unless we can find a 2nd customer.

Bingo.

The fundamental problem is that Canada's energy fate is completely entwined with that of the US. All of her extra capacity is directed there, and push might come to shove when the US starts to run low. Don't expect the lights to stay on for long in Montreal if they go off in New York City.

Microwaves might possibly be a better bet to extract oil from shales and sands:
http://alfin2300.blogspot.com/2008/01/peak-oil-meet-raytheon-oil-shale.h...

The RF/CF combination is more economical and environmentally responsible than older oil shale extraction techniques as it uses less power, does not severely disrupt the landscape or leave behind residue that can enter groundwater supplies....For tar sands and heavy oil, the Raytheon process could yield 10 to 15 barrels of oil equivalent per barrel consumed, due to the lower heating temperatures required. When applied in tar sands, the combined RF/CF technology performs a mild upgrading in-situ, yielding an attractive light sweet crude oil. The process is “tunable”, facilitating production of various product slates.

The use of RF technology in shale processing would enable the fuel to be extracted from the earth in only one to two months. In-ground heating methods that do not employ radio waves, by contrast, require three to four years to replicate the natural conversion process.

This would enormously economise on the use of water too.

Nuclear batteries would be another possible solution:

This technology make it three times cheaper and faster (less infrastructure and piping) to tap 1.1 trillion barrels of oil that is in the form of oil shale in the USA. Increasing US oil reserves by 30-40 times and perhaps eliminating the need for oil imports in 10-15 years. Helping to more economically unlock global oilsands and oil shale. Plus it would at the same time allow up a 100 year transition to a lot more nuclear power and renewables. It would be possible for a shorter transition with less air pollution and fossil fuel use as well by eliminating coal. It would provide for 20-50 times more efficient use of Uranium and allow for the use of Thorium.

http://nextbigfuture.com/2007/11/nuclear-battery-can-be-used-to-help.htm...

It seems a shame to use NG.

British Columbia has lots of coal(~20 billion tons?).

http://www.empr.gov.bc.ca/Mining/Geolsurv/coal/coalinbc/coal_bc.htm

Convert it to synthetic natural gas, 1 million tons a year of coal could generate 12 bcf of natural gas a year, so at 30 cu ft per barrel of syncrude, that's good for 1.1 mbpd of syncrude.
The penalty for sequestration is ~25% in energy lost.

AFAIK no-one has actually done much sequestration at the moment, so the technology is pretty unclear as is the expense.
Of course, that is also a criticism of the two alternatives I mention, but they would also appear to be kinder to water resources than first extracting and processing the coal - incidentally, when I was a kid that is what people here in the UK used to cook on, and we called it 'town gas'- and then heating steam with it and using it to extract oil from sands.

Town gas was also one of the products which led to the old song 'Dirty old Town' although technologies have doubtless improved that.

Something about that seems wrong to me...
Coal is relatively hydrogen poor, so it would have to be upgraded (a lot) to produce methane, which requires hydrogen. You could use some of the coal-resource to make this via water-gas shift: you consume some of the coal (my guess would be >>60%) to upgrade the rest, but it produces a lot of CO2, and there's consumption of the water resource again. But then we've made the methane.

Then, you ship it to the tar sands, and both burn it for heat AND convert it back to hydrogen for upgrading the bitumen. My instincts say this would be a losing proposition.

The existing Dakota Great Plains Gasification Plant
creates 54 billion cubic feet of natural gas from 6 million tons of low rank lignite(6700 Btu/pound) and the excess CO2 is sequestered in the Weyburn oil field.

No need for anybody's 'guesses'!!

Thankfully, your 'instincts' as a real-live chemist need not be relied upon as we have actual FACTS.

This technology has been operation for over two decades.

http://www.engineeringsights.org/SightDetail.asp?Sightid=468&id=&view=k&...

I kicked up the amount of gas based on the higher energy
British Columbian (mainly) bituminous coals which have double the heating value of North Dakota lignite.

http://www.empr.gov.bc.ca/Mining/Geolsurv/coal/coalinbc/coal_bc.htm

As usual for TOD we have a negative reaction to a completely practical solution offered, based on somebody's 'instinct'.

The fact is we can produce natural gas to fuel the tars sands operations for probably 100 years with gasification technology and existing coal deposits in British Columbia, but it is a lot easier to dismiss the idea as 'wrong' without understanding it.

Typical!

I'm sorry if you were offended... I never said you were wrong, and tried not to say so because I didn't have time for the calculations. I shouldn't have used such strong language. The numbers you've provided indicate a Btu recovery of ~65%... this is significant and I stand corrected.

This is why the Canada section of TOD is much more pleasant to post on, cause people speak like this instead of bashing each other, nicely played chemist.

Seems very clear to me that being #2 in both oil and uranium, but only #21 in Natural Gas means that the tar sands are eventually going to have to go nuke, BIG TIME.

I don't know much (if anything) about the Peace River tar sands developments, but I wonder whether the Peace could handle the double draw of water from nuclear plants as well as tar sands extraction. I understand that there is a certain amount of recycling, but of course nuclear plants need cold water for cooling which Bruce Power has in abundance on Lake *Huron*, but can the same be said for the Peace River?

As a disclaimer, I have zero technical training and my concerns are principally environmental, but I'm hoping someone more knowledgeable might share their thoughts.

http://www.world-nuclear-news.org/IT-Bruce_Power_to_make_important_annou...

*edited for geography confusion