Renewable portfolio standards and other green energy rules put a price on environmental benefits. Calculating this price can help clarify the social value of GHG reductions.
Nuking the Tar Sands
Can nuclear heat allow for low-cost commercial reclamation?
Deposits of unconventional fuels—both crude oil and natural gas—occur in geological environments with very low energy. In oil shales, such fuels initially were deposited as hydrocarbon material called bitumens in host sedimentary rocks. In oil sands, the bitumens migrated from their original depositional environment into more porous deposits.
Such deposits, whether asphaltic sandstones in western Canada (tar sands) or pyrobituminous shales in the western United States (oil shales), have very low fluid transmissibility reflecting in part the compaction of fine-grained detritus and their absorption of hydrocarbons. The exploitation of these low-energy deposits/reservoirs will require significant external energy to replace that lost or never provided by Mother Nature’s handiwork. Such input of energy must reflect the geological nature of the deposit, which largely will determine the nature of extraction (in-situ or mining) and of processing (upgrading and blending). To achieve a marketable product at a price that justifies significant long-term capital investments—both initial and sustaining—is the challenge facing the oil industry today. Bitumen-derived heavy oil is not strictly a commodity like lighter crudes. It sells at a discount (typically +/- $20/bbl) because it is unmarketable until dilutent pipelines, refineries, and product pipelines are built. The products are diluted bitumen blends and synthetic crude oil (SCO).
Bitumen production requires energy chiefly from electrical power for extraction and for upgrading. Such energy is produced by the combustion of fuels that include natural gas, gasification of heavy oil, residual coke, and coal. Nuclear energy has the potential to displace these hydrocarbon fuels.
Energy-intensive processes are costly. Only the most efficient sources of energy can provide economic competition with oil products derived from conventional crudes, the prices of which largely are set at the ceiling price for unconventional oil. The development of North America’s vast unconventional oil resources and the potential application of nuclear power share the same economic and regulatory hurdles to their development: Environmental mitigation of the disposal of the waste products, CO 2 and spent fuel. Uncertainty of governmental policy on sequestration of CO 2 and of spent fuel from new nuclear facilities are major encumbrances for financing the development of North America’s unconventional crude oil and the application of nuclear power as the energy source. If these uncertainties are resolved, the result may be a direct and competitive replacement of transportation fuels dependent imported conventional crude oil.
Unconventional vs. Conventional Oil
The Western Hemisphere contains the majority of currently defined unconventional crude oils. The Western Hemisphere has abundant technologically recoverable unconventional oil (see Figure 1) .
Canada holds a large repository of oil sands, and out of some 1,700 billion bbl of in-place bitumen, approximately 175 billion bbl of bitumen technologically is recoverable, with 22 billion bbl under active development.
In the United States, oil-shale potential is estimated at 2,000 billion bbl of in-place kerogen, with 80 percent located in Colorado, Utah and Wyoming and the remainder in Kentucky, Tennessee and Indiana (see Figure 2)