Mr. Blair himself is helping fund some research at the University of Calgary that is experimenting with microbes in hopes of making “quantum” savings in the energy required to process bitumen.
But he accuses industry of being afflicted with a “syndrome of ‘you can't change the technology.'” He points to the business of natural gas as an example of what's possible. In the past decade, that industry has found itself suddenly able to tap enormous new bodies of natural gas after the development of new drilling and rock-fracturing technologies enabled it to access shale gas, which had previously been considered uneconomic.
The results have been dramatic. In one shale alone, the Barnett in Texas, the U.S. Geological Survey estimated technically recoverable reserves of three trillion cubic feet in 1996. By 2008, the best estimate was 55 trillion cubic feet – a stunning 18-fold increase in what could be economically extracted from one area, thanks almost entirely to technological advance.
The oil sands is in dire need of such a makeover, Mr. Blair said – but has been hampered from trying to change by the past decade's steady surge in crude prices.
“We've seen oil price increases make the old technology seem very practical,” he said. “But particularly in today's environment, where oil prices have now retreated dramatically and the challenge is now on cost and efficiency, it puts a harder perspective on things.”
“And are people going to rise to the challenge? Yes.”
They have in the past, and there are examples where they are today. In 1982, Imperial Oil patented the revolutionary steam-assisted gravity drainage technology now used in most new projects. The result: Industry suddenly gained access to a huge new resource of deep bitumen deposits, all without using the gaping open-pit mines that have drawn such environmental ire.
More recently, Shell has experimented with electrical extraction – using a different method from E-T – and produced 100,000 barrels of oil at a test site near Peace River, although that technology is not yet commercially ready.
Yet early stage efforts remain a bet fraught with risks.
E-T has stumbled in its attempts to apply the technology to the oil sands (it has worked dozens of times in environmental remediation applications). In its second major test, it managed to produce oil from only one of four wells. Its problems ranged from electrical cables that were accidentally severed by surface equipment, to the design of its electrodes. In total, E-T has produced less than 3,000 barrels of oil.
Yet the potential prize for success is huge. E-T's technology, for example, could help open up carbonate oil, a huge hydrocarbon resource that is so tricky to produce that virtually no one has tried. And Petrobank believes its process, which uses a controlled underground burn to intensely heat oil sands and make them flow, can be used in a huge variety of heavy oil fields around the world. Like E-T's process, it requires virtually no water and uses dramatically less energy.
“We are breaking new ground in the industry,” said Chris Bloomer, Petrobank's chief operating officer for heavy oil.
He knows doubters think it won't work. He remembers when skeptics said steam-based extraction wouldn't work, either. They believed gravity would have no force in the reservoir, and the oil simply would not flow out. They were wrong then, and he believes they're wrong now.
Will the rest of the industry agree?
Mr. Blair is optimistic that low oil prices are cracking old resistance to change. The way he sees it, companies have two choices: Wait for oil prices to jump high enough that oil sands projects are economic again, or “get there first by being the first on the block to implement newer and more efficient technology.”
“It seems like an easy choice to me,” he said. “But it takes leadership. It takes innovators.”
