Executive Summary
Conventional heavy oil in Canada is mainly produced from deposits located in east central Alberta and west central Saskatchewan. The heavy oil deposits are deeper and thinner than those found in Bitumen or oil sands production areas, and the produced oil is slightly lighter, which allows it to flow at reservoir conditions, making primary production possible. Over the past 15-20 years production of heavy oil has grown rapidly, due to an increased use of the Cold Heavy Oil Production with Sand (CHOPS) recovery process, and the introduction of Progressing Cavity Pumps (PCP’s) and horizontal wells. In 1996, conventional heavy oil production accounted for 25% of Canada’s oil production and bridged the gap between the decline of light oil and the rise of oilsands production. In 1998/99, estimates were that the conventional heavy oil in place is 26 billion barrels, however, recoveries are only 5-10%, so a considerable amount of the resource awaits the development of new technologies or more favourable economics.
Current production is more Greenhouse Gas (GHG) intensive than conventional light oil, mainly as a result of venting of the methane produced with the heavy oil. Venting is now being discouraged by provincial regulators, however, until recently, producers and regulators viewed it as being economically unattractive to conserve. Provincial regulations do not require that gas be flared if it is non-toxic, does not generate odours or is uneconomic to conserve. Carbon dioxide emissions, from conventional heavy oil production, are lower than for thermal bitumen production, but it is expected that emissions intensity will increase if oil recovery is to be increased from current levels. A few thermal steam operations have been attempted, and some remain in economic operation, even though the heavy oil deposits are considered too thin to allow for widespread use of existing thermal recovery processes. Unlike oil sands development areas, the heavy oil production areas are well established, with oilfield services and a locally based operations workforce. The existing infrastructure would allow conventional heavy oil to continue, supplementing oil sands and light oil production, if new technologies are developed, or existing technologies adapted.
With input from various industry experts and stakeholders, forty-one potential R&D initiatives have been identified for the conventional heavy oil sector, covering a wide range of technical and motivational needs. A primary need, is to better support and encourage efforts to understand the reservoir, impacts of current recovery and operating methods, and to initiate work to start defining the sector’s future. Currently there is little understanding of the impacts and expected life of the current recovery process, and there are a great number of questions about how current operations will determine what is achievable in the future.
From a greenhouse gas point of view there are some initial efforts, which could result in major reductions in GHG emissions in the sector, that will be influenced more by motivation than by technology. Reductions in emissions by reducing vent gas, improving tank heater efficiencies and reducing trucking activity, should all be achievable with current technology at reasonable, present value based, economic returns.
For sustainable results that will improve the economics of the sector, while reducing environmental impacts, and supporting those dependent on the industry, R&D efforts must focus on enhancing understanding of what is happening in the ground. Without that understanding, the future of the sector may be compromised, and much of the resource will remain unexploited.