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(C.J. Burton for Report on Business Magazine)
(C.J. Burton for Report on Business Magazine)

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The oil sands: redeemed by fire? Add to ...

Decades of study and engineering advances have mostly resolved the safety problems: In the Williston basin in the Dakotas, hundreds of wells have operated largely without incident. But combustion still involves playing with fire-engineers, for example, worry about the stresses that a fire-flood could place on metals used in wells-and other troubles persist. Among these are the "sand problems" referred to by Bennion: In trial projects run by Petrobank, oil has come roaring from the ground mixed with sand, a phenomenon that can wear out equipment and is difficult to clean up after, in part because the spewed stuff is laced with high levels of deadly hydrogen sulphide.

Bloomer counters that the sand is "not a big issue" and, with new well designs, "we've overcome that." He also says cleaning up the noxious gases adds only a "very small cost" to operations. THAI was designed and patented specifically to overcome some of the issues that hampered previous combustion projects, including the ability to keep oil flowing. Over the past few years, combustion has proven its ability to wring bitumen from the earth, Bloomer says, and people are noticing. "We've taken it from the back of the stage to the front of the stage."

But the problems have raised eyebrows, and a surprising number of combustion experts-including Moore himself, who has worked with Excelsior and prefers its method-are skeptical about Petrobank's process.

"I don't like THAI," he says. The reasons are technical, involving a design flaw Moore believes makes that process vulnerable to some of the problems Petrobank has already experienced.

But Moore's nightmare is that, if for some reason THAI can't match its promises, the whole notion of using combustion in the oil sands-and all the benefits it could bring-could go with it.

"My biggest worry is that if THAI is successful, it will be THAI [that wins out]" he says. "If it fails, it will be combustion [as a whole]that fails."

If combustion is to fulfill its promise, what it needs more than anything, Moore says, is a company with the financial might to install it in the field and prove that the method works.

So it is a strange irony that the man who killed combustion may also be the man who saves it. Harbir Chhina studied under Moore before rising through the ranks of EnCana Corp. and its spinoff, Cenovus Energy Inc., where he is executive vice-president of enhanced oil development and new resource plays.

Under Chhina's leadership, researchers developed a technique that would see combustion used as a sort of cleanup operation. After steam heats a reservoir and removes some of its oil, combustion could be used to sweep up much of what remains. Moore strongly supports the idea.

Just as Chhina prepared to test it in the field, however, he discovered that another research project, which involved drilling more wells to suck away oil from steam projects, would be a cheaper, easier alternative. So combustion was put on hold. Still, he says, "I believe in combustion."

Cenovus continues to devote roughly 10 per cent of its research budget to combustion, and, Chhina says, combustion could account for 10 per cent to 20 per cent of its oil sands production as the company begins to tap reservoirs less amenable to SAGD. Cenovus is a major company, with significant oil sands production and considerable clout. If it adopts combustion, others will take notice. It would be a huge gain for a technology that is, today, virtually invisible.

Yet even if Chhina's projection proves true, history has taught that technology marches slowly through the oil sands. SAGD was invented more than three decades ago. But it took until this February for the first major SAGD project to reach payout. With billions at stake, executives are loath to bet on new technologies until they're certain they will work-and even then, adoption can be slow.

Still, Bloomer is convinced that skeptical minds will also come around to combustion, despite its long and checkered history. "The past does not necessarily reflect the future in this business," he says.

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