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Canada’s strong dollar and buoyant eConomy now float on prospeCtive Cash flows from its oil and natural gas. who Created that prosperity? no single individual, however riCh or famous, Can reasonably be assigned more than a tiny sliCe of the total Credit for upstream petroleum development. instead, Canadians owe their thanks to tens of thousands of oil and gas workers. to Joe Citizens who look perfeCtly ordinary but Canada’s strong dollar and buoyant eConomy now float on prospeCtive Cash flows from its oil and natural gas. who Created that prosperity? no single individual, however riCh or famous, Can reasonably be assigned more than a tiny sliCe of the total Credit for upstream petroleum development. instead, Canadians owe their thanks to tens of thousands of oil and gas workers. to Joe Citizens who look perfeCtly ordinary but are aCtually teChnology-armed revolutionaries.to individuals like bruCe peaChey, a quiet-spoken edmontonian who has dediCated most of his working life to heavy oil and bitumen. peaChey is well aware that researCh and development invested in this energy-riCh gunk Can pay off hugely— twiCe over. “first, we’ll reCover billions of barrels in future produCtion. seCond, we Can export our teChnology and expertise to a world that needs more energy,” the Consultant prediCts. “in terms of making a signifiCant global Contribution, alberta’s most promising opportunities still revolve around our hydroCarbon resourCes.” peaChey’s grandfather, John kennedy, supervised maintenanCe at a power plant in regina. “he was the ClassiC teChniCally inClined sCot from glasgow. his example inspired my own interest in solutions that resolve praCtiCal problems and avoid waste,” says the professional engineer. in 1976, he graduated in ChemiCal engineering at the university of saskatChewan. “when i first went to Cold lake in 1977, imperial had two small-sCale bitumen pilot tests underway,” peaChey reCalls. “bitumen was used for low-value produCts like asphalt paving and shingles.” at that time, heavy and extra heavy Crudes aCCounted for about 15 per Cent of Canada’s produCtion. however, light and medium output had already begun to drop, a deCline that has so far proven irreversible. in response, engineers and teChnologists developed heavier Crude produCtion from lloydminster, fort mCmurray and Cold lake/bonnyville in alberta. today, heavy oil and bitumen make up twothirds of this Country’s total petroleum produCtion. thanks to that inCrease, Canada’s net exports of oil now stand at about one million barrels per day, forming a powerful pillar within the national eConomy. over his Career, peaChey has worked with most aspeCts of oil development. by 1990, he was a senior member of the imperial team that managed annual Capital investment of $100 million at Cold lake, along with operational spending of $250 million. nowadays, as the prinCipal of new paradigm engineering ltd., his present and past Clientele inCludes a lengthy roster of heavy oil and bitumen produCers, government researCh agenCies and the upstream seCtor’s Collaborative researCh and development organizations. an enthusiastiC mentor of fresh talent, he also teaChes engineering students at the university of alberta. heavy oil is defined as Crude that’s 20 degrees api and Capable of flowing without the addition of heat. bitumen is thiCker yet and typiCally won’t flow without artifiCial for that matter, more2011 than 90 per Cent of heavy oil also won’t move to a wellbore using traditional walking beam pumps and vertiCal stimulation. January/February $6.00 wells. at lloydminster, the maJor stumbling bloCk to heavy oil produCtion was sand. large quantities of grit and sand flowed with the Crude into wellbores, Choking off traditional walking beam pumps. by the late 1970s, manufaCturers had Come up with effiCient progressing Cavity pumps (pCps), designed speCifiCally for large sand throughput. pCps enabled field operators to initiate Chops. “in a Chops system, methane gas bubbles out of solution with the heavy Crude and Carries along the finer partiCles of sand,” peaChey explains. “at first, a new well’s produCtion is frothy, a mix of oil with up to 40 per Cent sand by volume. this stuff has the ConsistenCy of shaving Cream.” as the finer sand is evaCuated, the heavier partiCles Consolidate, enabling “wormholes” to form within the Crude reservoir. those wormholes aCt like mini wellbores for additional oil flow. aChops only works effeCtively in relatively thin oil-bearing formations, typiCally two metres thiCk or less. “wormholes form due to pressure distribution within the reservoir, that muCh we know,” peaChey says. “but we don’t know what the reservoirs and wormholes aCtually look like. people still argue over the meChanism behind their formation, and so far no one has been able to simulate the proCess reliably with Computer models.” wormholes render waterflooding ineffeCtive as a teChnique for enhanCed oil reCovery (eor). “in faCt, Chops and waterflooding are mutually exClusive meChanisms,” peaChey says. “Chops produCes a lot of sand but little water. a signifiCant water breakthrough signals the end for a Chops proJeCt.” even so, waterflooding has potential for all mobile Crudes, inCluding heavy oil. the petroleum teChnology allianCe Canada estimated five years ago that low-Cost water management Could add a billion barrels to western Canada’s oil reserves. sinCe then, alberta energy resourCes Conservation board has been approving new eor appliCations at a fairly steady rate: 39 in 2006, 37 in 2007, 32 in 2008, 31 in 2009 and 27 as of mid-oCtober in 2010. nearly all of those new proJeCts were waterfloods. “in heavy oil reservoirs, floods work best where any underlying water is not well-ConneCted to an aquifer,” peaChey explains. waterflooding pushes heavy and light Crude ahead toward a wellbore, but the drive meChanism varies signifiCantly for heavy oil. “we still only have a very limited understanding of the prinCiples involved, based on studies by the saskatChewan researCh CounCil and others,” he says. “slow waterfloods are best. the water gradually seems to drag the oil with it. my view is that the proCess is probably almost like erosion.” theoretiCally, peaChey aCknowledges, waterflooding shouldn’t work at all in heavy oil. “in praCtiCe, we’ve learned through trial and error that flooding Can generate good results as long as bottom water remains inaCtive. [only if underlying water remains inaCtive Can produCers Create and maintain a pressure differential between inJeCtion and produCing wells.] the advanCes in horizontal drilling teChnology have been a big help with heavy oil waterfloods. horizontal inJeCtors and produCing wells have proven to be more effeCtive than vertiCal wells.” where a heavy oil reservoir does have a strong ConneCtion to an underlying aquifer, produCers Can strive to Create an aCtive water drive. in that Case, Crude produCtion may be enhanCed until the water breakthrough beComes exCessive. peaChey suggests that proJeCts of this type may be suitable for ChemiCally enhanCed eor teChniques, espeCially the use of polymers mixed with water. polymers are long-Chained hydroCarbon moleCules that Create a thiCker, more visCous fluid (similar in ConsistenCy to hand lotion) Capable of dragging along more oil. “polymers are salt-sensitive petroChemiCals, whiCh is why they are rarely used to enhanCe light and medium Crude reCovery. those grades of oil are CharaCteristiCally formed at depths where salt water is usually present,” peaChey says. “heavy oil reservoirs are shallower and more often CharaCterized by fresh water, whiCh is a CritiCal key faCtor for polymers.” steaming amounts to flooding with heat. peaChey arrived at Cold lake while sCientifiC pioneer roger butler was experimenting with steam-assisted reCovery of bitumen through well pairs. “butler’s ideas led to the drilling of imperial’s first horizontal well in that proJeCt, whiCh was designed to ColleCt oil released through steam inJeCtion from a vertiCal well,” the new paradigm prinCipal remembers. “we weren’t able to establish an effeCtive steam Chamber. at that time, we still didn’t have drilling teChnology Capable of drilling the parallel horizontal well pairs that are used today for sagd reCovery.” to drill one horizontal well preCisely above another horizontal well, the alberta oilsands researCh and development authority Created an underground test faCility near fort mCmurray. that provinCially sponsored proJeCt proved that steam inJeCted into an upper wellbore would Cause an eConomiC quantity of bitumen to flow downward into a ColleCtor well. from that initiative Came today’s bitumen sagd proJeCts, and thermal flooding is being applied to heavy oil as well. “to Create an eConomiCally viable steam Chamber for heavy oil, the reservoir formation must be at least 10 metres thiCk,” peaChey says. “otherwise, too muCh heat is absorbed by the surrounding roCk.” to date, Chops has been the most effeCtive new teChnique for heavy oil but its initial rush of development is Cresting; the teChnology has been applied to many of the most suitable geologiCal formations. emphasis is now shifting toward water and ChemiCal inJeCtion. “we’re seeing enCouraging results from polymer flooding, whiCh is relatively inexpensive,” peaChey reports. “Co2 floods have been more problematiC at lloydminster, although several small proJeCts are ongoing. Carbon dioxide beComes misCible with Crude only at high pressure, making it a good ChoiCe for light and medium oil. heavy oil reservoirs are typiCally too shallow to provide the required pressure. also, pure Co2 is expensive.” at one time, the eor veteran points out, Cold produCtion with sand was widely seen as impraCtiCal. “now we know that Chops will enable us to reCover an additional five to 10 per Cent of the total oil in plaCe,” he Comments. “that suCCess has been a big boost in seCuring funding for further r&d.” besides the Current proJeCts, future teChnologiCal possibilities for heavy oil and bitumen inClude solvents, energy pulsing, miCrobial aids, new mining teChniques and innovative drilling tools. as long as oil remains, peaChey says, Canada’s innovators will Continue to wrest more of it from the roCk. Canada’s strong dollar and buoyant eConomy now float on prospeCtive Cash flows from its oil and natural gas. who Created that prosperity? no single individual, however riCh or famous, Can reasonably be assigned more than a tiny sliCe of the total Credit for upstream petroleum development. instead, Canadians owe their thanks to tens of thousands of oil and gas workers. to Joe Citizens who look perfeCtly ordinary but are aCtually QUIET REVOLUTIONARIES dediCated most of his working life to teChnology-armed revolutionaries.to individuals like bruCe peaChey, a quiet-spoken edmontonian who has heavy oil and bitumen. peaChey is well aware that researCh and development invested in this energy-riCh gunk Can pay off hugely—twiCe over. LIkE bRUcE pEAchEy AREneeds more “first, we’ll reCover billions of barrels in future produCtion. seCond, we Can export our teChnology and expertise to a world that energy,” the Consultant prediCts. “in terms of making a signifiCant global Contribution, alberta’s most promising opportunities still revolve bRINgINg pROSpERITy TO around our hydroCarbon resourCes.” peaChey’s grandfather, John kennedy, supervised maintenanCe at a power plant in regina. “he was the ClassiC teChniCally inClined sCot from glasgow. his example inspired my own interest in solutions that resolvewITh praCtiCal problems and avoid cANAdA A RISINg waste,” says the professional engineer. in 1976, he graduated in ChemiCal engineering at the university of saskatChewan. “when i first went to Cold fLOOd Of hEAVIER cRUdES lake in 1977, imperial had two small-sCale bitumen pilot tests underway,” peaChey reCalls. “bitumen was used for low-value produCts like asphalt paving and shingles.” at that time, heavy and extra heavy Crudes aCCounted for about 15 per Cent of Canada’s produCtion. however, light and medium output had already begun to drop, a deCline that has so far proven irreversible. in response, engineers and teChnologists developed heavier Crude produCtion from lloydminster, fort mCmurray and Cold lake/bonnyville in alberta. today, heavy oil and bitumen make up twothirds of this Country’s total petroleum produCtion. thanks to that inCrease, Canada’s net exports of oil now stand at about one million barrels per day, forming a powerful pillar within the national eConomy. over his Career, peaChey has worked with most aspeCts of oil development. by 1990, he was a senior member of the imperial team that managed annual Capital investment of $100 million at Cold lake, along with operational spending of $250 million. nowadays, as the prinCipal of new paradigm engineering ltd., his present and past Clientele inCludes a lengthy roster of heavy oil and bitumen produCers, government researCh agenCies and the upstream seCtor’s Collaborative researCh and development organizations. an enthusiastiC mentor of fresh talent, he also teaChes engineering students at the university of alberta. heavy oil is defined as Crude that’s 20 degrees api and Capable of flowing without the addition of heat. bitumen is thiCker yet and typiCally won’t flow without artifiCial stimulation. for that matter, more than 90 per Cent of heavy oil also won’t move to a wellbore using traditional walking beam pumps and vertiCal wells. at lloydminster, the maJor stumbling bloCk to heavy oil produCtion was sand. large quantities of grit and sand flowed with the Crude into wellbores, Choking off traditional walking beam pumps. by the late 1970s, manufaCturers had Come up with effiCient progressing Cavity pumps (pCps), designed speCifiCally for large sand throughput. pCps enabled field operators to initiate Chops. “in a Chops system, methane gas bubbles out of solution with the heavy Crude and Carries along the finer partiCles of sand,” peaChey explains. “at first, a new well’s produCtion is frothy, a mix of oil with up to 40 per Cent sand by volume. this stuff has the ConsistenCy of shaving Cream.” as the finer sand is evaCuated, the heavier partiCles Consolidate, enabling “wormholes” to form within the Crude reservoir. those wormholes aCt like mini wellbores for additional oil flow. aChops only works effeCtively in relatively thin oil-bearing formations, typiCally two metres thiCk or less. “wormholes form due to
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