Gas Pipeline: Open Season Coming to Alaska

ConocoPhillips and BP have submitted a plan to build a gas pipeline through Alaska. Tony Hayward, BP's chief executive told the Financial Times Wednesday: "This project is vital for North American energy consumers and for the future of the Alaska oil and gas industry". Robin West, chairman of PFC Energy, told FT: "This is a critical project linking vast gas reserves with markets that are going to need that gas". But will the gas ever make it to the lower 48 states?

The Financial Times reported that most of the 4bn cubic feet of natural gas piped out every day will go to the Alberta tar sands, where it will be used to fuel the extraction of bitumen from which synthetic oil will be produced. Natural gas is needed for the energy intensive process of getting oil from the gummy viscous asphalt substance contained in the sands.

Extraction from the vast Alberta sands is energy intensive and expensive, but since oil is scarce and the price per barrel has gone up, more companies find the investment worthwhile. Saudi Arabia's oil reserves are considered the largest in the world, the Alberta tar sands are the second largest. They cover a large area 50,000 square miles, about the size of Florida -- or Nepal, North Korea, Malawi, Greece or Tibet. 40 companies involved with 143 projects currently work to extract the bitumen. The main sites are at Athabasca, Cold Lake, and Peace River. Scientists expect the sands to yield over a trillion barrels of oil.

Elizabeth Kolbert wrote about the Alberta tar sands endeavor last November in a New Yorker article, "Unconventional Crude: Canada's synthetic -fuels boom", and described the difficult process of extracting the viscous bitumen. Bitumen close to the surface can be mined then extracted from the sand. First the surface vegetation and soil is removed to access the sands. Then tons of sand are removed via open pit mining and transported to an extraction plant. The the sand is the soaked and agitated with hot water so the bitumen can be siphoned off. Since bitumen is only about 10% of the sand by volume, the multi-step process is necessary.

This extraction is simple compared to those used to extract oil from greater depths. Most of the bitumen containing sands are deep beneath the surface 100-250 feet down, in which case the extraction becomes even more complicated. Two main in-situ processes employed are Cyclic Steam Stimulation (CSS), and Steam Assisted Gravity Drainage (SAGD). These both heat the sand mixture which makes the bitumen less viscous, more like molasses, which will flow. Kolbert describes SAGD:

"Typically, two horizontal wells are drilled into the sands, one above the other. High-pressure steam is injected into the top well; eventually, the tar sands grow hot enough-- nearly four hundred degrees-- that bitumen begins to flow into the bottom well."

All of the current methods of bitumen extraction are energy intensive. SAGD uses the equivalent of 1 barrel out of 3 extracted from the sand pits. The process is laborious and energy intensive, and currently fueled by natural gas. Kolbert notes that by 2012 the tar sand extractions will require "2 billion cubic feet of natural gas a day, or enough to heat all the homes in Canada". Therefore the pipeline, as the Financial Times reports .

The extraction process uses significantly more energy than what is consumed in drilling for oil, in fact carbon emissions produced are 50% higher per barrel of oil consumed. People question how such an energy intensive project can go forward when the overall goal is to lower global emissions. As well, other problems, such as environmental destruction from the mining, ground water pollution and air pollution also dog the project. Despite the environmental concern and pockets of resistance however, oil prices are so high that politicians support the investment and its outcomes, both positive (more oil) and controversial.

Since the mid-1800's engineers have been trying to find efficient methods for extracting the oil. At one point engineers hatched a plan with government to detonate atom bombs beneath the surface to release the oil. The scheme was part of Project Plowshare, which sought to utilize atomic bombs for peaceful purposes. Scientists proposed "earthmoving" for all kinds of activities, including oil and gas extraction, canal building, etc.. One test came in the form of Project Gasbuggy, which used nuclear energy in the form of an atomic bomb to release natural gas in New Mexico. A 1967 Time magazine article interviewed people who attended the of the government and gas company "kick-off":

"..the earth jolted underfoot and a dull, distant boom was heard, followed by a second, more gentle, rolling shock. Someone shouted: "We did it! We did it!" Hand shakes were exchanged all around. The U.S. had successfully set off the first nuclear explosion sponsored jointly by the Government and industry."

A marker designates the Gasbuggy Project site, where no digging is currently allowed -- has more details. Project Plowshare eventually got dropped when enthusiasm for nuclear "earthmoving" waned. The USSR also did work in the peacetime use of atomic bombs for oil and gas excavation and apparently worked to extract bitumen from sands like Alberta's.

For the current project, BP teamed up with Conoco, reports the paper, because BP's reputation is fairly damaged in Alaska after several large spills. Previous to this new bid, Conoco had submitted a bid in response to the state's Alaska Gasline Inducement Act (AGIA), however the state approved only one company's bid: TransCanada's. As a next step, BP/Conoco will fund an "open season", seeking companies to commit to transporting the gas, before asking Congress for regulatory approval for the project.

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