In Canadian Alberta the tarsands are
mined and, by other methods where the deposits are too deep, bitumen is
extracted. Other than used on roads and roofs the bitumen has to be processed to
a synthetic crude oil (SCO), also known as upgraded bitumen. It can then be
refined into petrol, jet fuel or diesel.
Due to a lack of processing plant
and the need for natural gas for the upgrading, only half of the bitumen
produced is upgraded. Also there is insufficient refining capacity in Canada to
take up the other half, even if it were to be upgraded. There is a demand for it
in Texas, but to get it there is a problem as bitumen is too viscous to load
into railcars without heating, or to be pipelined without dilution.
As railbit it can be accommodated in
railcars with heating coils or moderately diluted. As dilbit with around 30%
diluent (mainly pentanes) or, as synbit diluted with SCO, it can be pipelined
South over the border to the US. The Keystone XL pipeline will augment the
existing pipeline capacity of 400,000 barrels per day to 600,000 barrels per
day.
A problem is that although some of
the diluent can be separated from the dilbit at its destination, it is used as
it is as a feedstock. This means that diluent must be procured in the US and
pipelined North over the border to Alberta to make up further dilbit.
In a refinery the hydrocarbon number
of the bitumen is lowered to upper and middle distillates by coking and
hydrogenation. The coking process produces accumulating quantities of petroleum
coke (petcoke), which is mainly carbon with vanadium and sulphur pollutants.
In Alberta petcoke arises from the
refineries in Edmonton and the US in refineries in Texas and elsewhere. It can
be sold for burning in power plants, for augmenting coking coal and for carbon
anodes for electrolysis, but it is unpopular and stockpiles are growing. There
are around 100 million short tons of it in Alberta.
Because of its potential
contribution to climate change, the best practice would be to put the petcoke
back in the tarsands mines as landfill.
Because fracked well oil production
falls off rapidly, there is great use made of road tanker transport of the tight
oil and an increasing use of rail transport for bitumen deliveries instead of
connecting transiently producing wells to pipelines. If the production is
predominantly oil, the gas fraction is simply flared, as there is insufficient
to justify a pipeline for its connection to a gas grid.
It means that Keystone XL has
competition from rail, avoiding the disturbance of communities with the pipeline
building.
Because there have been major spills
of dilbit there has been major opposition to the building of Keystone XL.
It mainly favours Canada as it is
able to export its un-upgraded bitumen and because of its foreign origin the
refined products can be exported from the US avoiding the embargo on exporting
indigenous crude oil and its products.
It is likely that President
Obama’s opposition to Keystone XL will be overturned by the Republicans in
2015, but it still may not go ahead with the rail competition, that from the
tight oil production from the Eagle Ford shale play in Texas and that from the
Bakken play across the Canadian/US border.
John Busby 23 November 2014