Alberta's oil was coveted long before it was extracted
Tue. September 23, 2008; Posted: 02:43 PM
Sep 21, 2008 (Billings Gazette - McClatchy-Tribune News Service via COMTEX) -- HBC | Quote | Chart | News | PowerRating -- Sep. 21--Although large-scale exploitation of northern Alberta's oil sands is a relatively recent phenomenon, people have known for nearly 300 years that the region was rich in an unconventional kind of oil.
James Knight, a fur trader with Hudson's Bay Company, wrote in his journal in 1714 that Indians in what is now Manitoba told him a "great river" far inland contained "a certain gum or pitch that runs down the river in such abundance that they cannot land but at certain places."
Five years later, another Hudson's Bay trader reported that a Cree Indian brought him a sample of the "gum or pitch that flows out of the banks of the river." The first European to visit the fabled river, the Athabasca, was the fur trader Peter Pond, who reported in 1778 that he saw "springs of bitumen that flow along the ground."
A more detailed description was written in 1788 by the explorer Alexander Mackenzie. About 20 miles from the fork of the Athabasca and Clearwater rivers, he said, there were "some bituminous fountains into which a pole of 20 feet long may be inserted without the least resistance." He also reported that Indians in the area would mix the bitumen with gum collected from spruce trees and use the material to seal their canoes.
A hundred years later, in 1889, the chronicler of a government expedition to the region remarked prophetically: "That this region is stored with a substance of great economic value is beyond all doubt, and, when the hour of development comes, it will, I believe, prove to be one of the wonders of northern Canada."
The hour of real development was a long way off, but early in the 20th century attempts were made to drill for the oil. In those early days, geologists were convinced that conventional liquid oil lay underground in the Athabasca region and was seeping upward into the sands. But no matter how many wells were sunk, none hit deposits of oil.
That realization led to the mining of the oil-saturated sands, and to the earliest efforts to use hot water to separate bitumen from the sands. There was a limited use for the raw bitumen. It was sold for tire coating, fence-post dip, roof coating and sealing and road paving. One product was called "Bitu-phalt."
The first commercial oil-sands plant was built in 1927, and the first large-scale mining took place in 1948-49, when the Alberta government operated an experimental plant at Bitumount, north of the town of Fort McMurray. There were other attempts to exploit the oil sands, and after many fits and starts over the next 40 years, the Great Canadian Oil Sands project, built to produce 45,000 barrels a day, opened in 1967. The Sun Oil Co., which had taken over the project in 1964, later changed its named to Suncor Energy and remains in business.
The mining originally was done with bucketwheels, gouging machines that weighed up to 850 tons. But because they could be aimed only straight ahead, indiscriminately tearing into oil-rich sands as well as chunks of soil with little value, they were inefficient. In the mid-1990s, bucketwheels were replaced by trucks and shovels, which can do much of the separation on the spot -- sending oil sands to processing plants and soils without oil to holding grounds until it can be used for other purposes, like reclamation or building dikes for settling ponds.
The sands can be mined to a depth of about 250 feet. Though much of the focus in the industry has been on mining over the years, only about 20 percent of the oil can be extracted by mining. The other 80 percent can be reached by only by "insitu" methods, which involve pumping steam underground and allowing it to slowly separate the bitumen from the sand. The bitumen eventually seeps down and flows into perforated pipes, from which it is pumped to the surface.
Improvements in the insitu methods, combined with the rising price of oil, have triggered the boom in the oil-sands industry. Most of the oil sands being processed now come from mines, but the prospect of even greater recovery of oil through insitu methods makes the investments in infrastructure viable.
Greg Stringham, a vice president with the Canadian Association of Petroleum Producers, said it is widely believed that current levels of production can be sustained if the price of oil stays above $75 or $80 a barrel.
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