New tech could make oil sands production cheaper than shale

Mountains of the Uintah Basin in Utah_Wikipedia_Small
Source: Wikipedia

Oil sands production in Alberta has been reviled for its damaging effects on the environment, and rightfully so. The water and steam-driven extraction process requires enormous tailings ponds and mars the landscape.

But one company has pioneered a novel way of extracting oil sands without all of the environmental fallout. MCW Energy has developed a water-free, solvent-based approach to oil sands production, a process that recovers up to 99 percent of the hydrocarbon content. That allows the producer to avoid the need for toxic tailings ponds. The solvents are recycled and with almost no waste left over, the produced sand can then be returned to the ground. In other words, it is a clean form of oil sands production.

MCW has a processing facility in Utah that has an initial capacity of 250 barrels per day, with plans to scale up. It chose Utah for a reason – the state’s Uintah Basin is thought to hold more than an estimated 30 billion barrels of oil across eight deposits. Unlike Alberta’s oil sands, the reserves in Utah are much closer to the surface, which allows for unique approaches like MCW’s solvent technology.

Of course, energy companies are always coming up with new and interesting ways to produce oil and gas. The big question is whether or not new technologies are economical. An independent report found that with oil prices at $80 per barrel, MCW’s technology can produce a barrel for just $35. And if WTI fell to $35 per barrel, MCW can produce for $24.

MCW is also looking at novel revenue streams, such as licensing its technology to other producers. The first license was awarded to Canadian TS Energy, a company that will have the rights to use the solvent-based technology in Canada and Trinidad and Tobago.

Led by a former top executive at ExxonMobil’s Gulf of Mexico division, MCW views a benign extraction process as the future of energy production. With environmental scrutiny on Alberta’s dirty oil sands rising, the long-term viability of natural resource production depends on the industry finding cleaner ways of doing business.

By. James Burgess of Oilprice.com

Image: Mountains of the Uintah Basin in Utah

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