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Saskatchewan still hopes to mine its own oilsands

Despite environmental and technical challenges, Saskatchewan still wants to one day extract bitumen from the ground.

New technology needed to extract resource, then there's the problem of selling it

The provincial government still hopes to one day develop the oilsands in Saskatchewan 1:50

After more than a decade of effort, millions spent on research and a corporate bankruptcy, Saskatchewan, which hasn't produced a drop of oil from bitumen, remains determined to develop its own oilsands. 

Hope, it's said, springs eternal. In Saskatchewan, so too do dreams of oil wealth. 

"Clearly, there is a resource there," said Saskatchewan energy minister Bill Boyd. "Companies are pretty innovative and I expect they will unlock that resource at some point in the future."

Ambition is one thing, but the odds would seem to be stacked against Saskatchewan. Alberta's oilsands contains 1.8 trillion barrels of crude bitumen. Of that, an estimated 170 billion barrels can be recovered using current technology.

At around eight billion barrels, Saskatchewan's reserve estimates are significantly smaller. A current glut of oil in the world also raises questions about whether expensive barrels from Saskatchewan will ever even be needed by the global oil market. 

"There is a long laundry list of challenges that lie in front of Saskatchewan," said University of Calgary energy historian Paul Chastko, who has studied Canada's oilsands extensively. "All of which seem to argue against anything happening immediately."

It wasn't always thus. In 2007, then-opposition leader Brad Wall proudly waved a sample of Saskatchewan bitumen at a fundraiser audience in Calgary. Oil was trading in the triple digits, which made the province's dreams of oilsands seem close enough to touch. 

In those days, companies that had been shut out of the sweet spots in Alberta were also looking at what was on offer across the border. Oilsands Quest, for instance, spent millions researching how to extract bitumen from the early stage play. When access to capital dried up along with the financial crisis, the junior company was forced into bankruptcy protection. 

In 2012, Cenovus bought Oilsands Quest's properties in Alberta and Saskatchewan for $10 million. The company says it has no plans at this time to develop any of the properties. 

Currently, companies have no way to extract the bitumen in Saskatchewan. The resource is too deep for mining and too shallow for SAGD (steam assisted gravity drainage), which uses steam to heat the bitumen so it flows downward into wells and can be pumped to the surface.

Scientists and engineers have tried to find a solution. While they have yet to find an answer, they may be getting close.

Not if, but when

The Saskatchewan Research Council (SRC) has worked for 15 years to try and liberate the province's bitumen. SRC worked with Oilsands Quest many years ago on this project. In the next several years, the council is pledging to figure out how to extract Saskatchewan's bitumen.

"I think in the next five years we will crack that," said Mike Crabtree, vice-president of energy for SRC. "Then it will be a question of when those technologies will be commercially picked up by the operators."

SRC scientists are hopeful the use of electricity and solvents could be the solution. The reason SAGD is ineffective for Saskatchewan's bitumen deposits, which are about 180 metres underground, is because it uses steam at a high temperature and high pressure. That's problematic because the geography in the area isn't strong enough to form a barrier or cap to contain the steam.

That's why researchers are trying to develop a low temperature, low pressure method to exploiting the reserves. Techniques under development include using electrical thermal heating and solvents instead of steam. Those methods could also result in a lower energy, more environmentally sensitive way of extracting bitumen than conventional approaches used in Alberta. 

Plenty of hurdles

If researchers can perfect the technology, it would then be up to industry to implement.

"Scientists and engineers have to be optimists. We develop a lot of technology. Some of it makes the cut, some of it doesn't," said Crabtree.

Any potential oilsands operator would face several challenges to begin operating in Saskatchewan, besides the obvious technology hurdle. How would the bitumen be transported, by pipeline or rail? Will there need to be any upgrading or refining required? Is there not a more profitable play in Alberta?

Then, there is the environment. If it takes five years to perfect the technology to unlock Saskatchewan's oilsands, it may take another five years for a company to commercialize the technique, leading to a decade down the road without a facility constructed. What will the environmental concerns be at that time, considering the extensive discussions already about climate change, the need for a carbon tax and the G7 pledge to decarbonize the world?

While Alberta has reaped the financial benefits of the oilsands, it has also had to bear the considerable criticism flung from around the world over the harm to its environment.

"Make sure you have adequate thought on transportation, infrastructure and impact on the workforce, land, air, and water," said Chastko. "Be sure that you have thought out the implications of your decision. Having the technology and skills to do something, is a completely different question than whether or not something should be done."

Ultimately, Saskatchewan's efforts could prove to be Alberta's gain.

If the technology is proven, it will likely be put to use in Alberta first, which will greatly expand how much bitumen can be recovered in the province. For instance, Crabtree suggests Cenovus is watching the research closely and if perfected, the company would likely use it on several of its properties in Alberta, before thinking of extracting bitumen from its lands in Saskatchewan.

That said, Saskatchewan doesn't want the whole world, it just wants its slice of the oilsands pie.

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