Mined Oil sands EROI 5, in-situ 2.9, or 1 if refinement, transportation, & environmental costs included

Nuwer, R. Feb 19, 2013. Oil Sands Mining Uses Up Almost as Much Energy as It Produces. InsideClimate News.

EROI SURFACE MINED oil sands (20% of reserves)

EROI 5  according to J. David Hughes research released Tuesday.

EROI 5.5 to  6 (Brandt)

EROI in-situ Steam Injected oil sands (80% of reserves)

EROI 2.9 : 1 — In-situ Steam injected tar sands, which comprise 80% of tar sands. These are gotten from deeper below the earth than mined oil sands, with an EROI of just 2.9 : 1, or 1 unit of natural gas to create 2.9 units of oil.

EROI 3.5 to 4 (Brandt)

Or perhaps an EROI of only 1?

Hall, who wasn’t involved in Hughes’ study, thinks the EROI for oil sands would be 1:1 if the tar sands’ full life cycle—including transportation, refinement into higher quality products, end use efficiency and environmental costs—was taken into account.

Brandt’s figures may be too high because he doesn’t account for the energy to convert oil sands to synthetic fuels, the transport of pentanes and other diluents to thin the tar for pipeline transport to refineries, the energy to refine them, and deliver to customers.

Compared to the EROI of 25 for conventional oil, this is barely a viable operation.

EROI is about to go down even lower. Hughes based his calculations on the highest quality 25.6 billion barrels of Canadian tar sands oil that are currently under active development. The143 billion barrels of oil sands under Alberta’s boreal forests are low quality, and only 8% are accessible with surface mining.

“Those EROI numbers are going to go down as we move away from the highest quality to the lesser quality parts of the resource. I’d expect that downward shift to probably start about now.” Hughes said.

“They have to use a lot of natural gas to upgrade this heavy, sticky, gooky almost tar-like stuff to make it fluid enough to use,” said Charles Hall, a professor at the State University of New York’s College of Environmental Science and Forestry. Hydrogen from gas heats the tar sands so the viscous form of petroleum it contains, known as bitumen, can be liquefied and pumped out of the ground. That’s how gas helps turn tar sands “into something a bit closer to what we call oil.”

With most of the world’s highest quality resources already exhausted, companies are turning to formerly undesirable alternatives such as tar sands oil, which come with higher energetic price tags yet lower returns.

“We built our nation, economy and civilization on cheap energy—that’s where this incredible growth of the U.S. economy has come from,” said Hall, who coined the term EROI in 1979. “But that characteristic high energy return on investment fuel from much of the last century is no longer here.”

Hughes’ figures include the energy it takes to mine bitumen as well as to upgrade it to synthetic oil that can be put into a refinery. It also includes the liquefied natural gas used to turn it into dilbit (diluted bitumen) so it can flow through pipelines.

Both Hughes and Hall think the new data should be factored into the debate over Canada’s tar sands reserves, which cover an area about the size of Florida.

What isn’t often mentioned, Hughes said, is the energy required to extract the oil, or the rate at which it can feasibly be recovered.

“Unless we talk about all 3 metrics—size of the resource, net energy and rate of supply—we’re not getting the full story,” he said.

If you accept the fact that fossil fuels are finite—and I think most people would—then using a lot more fossil fuels for recovering energy as opposed to doing actual work basically uses them up quicker with no net payback in terms of useful work,” Hughes said. “It’s an issue of diminishing returns.”

Canada is touted as having the third largest oil reserves in the world. But its supply of conventional oil is shrinking, and oil sands extraction has been growing fast in the past decade, from about 700,000 barrels per day in 2000 to 1.7 million today.

While no rigorous studies have been conducted on the association between diminishing EROI values and increased greenhouse gas emissions, Hughes thinks “it’s a pretty safe assumption to make” that they are linked.

Those emissions are only going to increase as Canada ramps up to the 5 million barrels per day already approved for extraction, said Simon Dyer, policy director for the Pembina Institute, a Canadian non-profit focused on developing sustainable energy solutions.

Whether mining tar sands oil makes sense financially, depends on the world market price of oil—and on whether a company has already paid off its infrastructure costs or is building a new mine.

With the current price of synthetic crude oil sometimes dipping as low as $30 per barrel, a company that has paid off its infrastructure can still make a profit. For a company that’s still building, however, the market price would have to be about $100 per barrel in order to justify construction, Hughes said.

“Cost-wise, this is the most expensive oil being produced today,” Dyer said. “It’s a pretty clear indicator that our solution to energy needs is not chasing lower and lower quality fossil fuel resources that come with higher impacts.”

If oil sands oil eventually finds an easy outlet to the Gulf Coast—perhaps through the proposed Keystone XL pipeline project—the price for upgraded synthetic oil will likely rise to reflect the world market value, currently $110 per barrel.

Profitability aside, the development of Canada’s oil sands reserves will never offset declines in crude oil. At the world’s current rate of oil consumption—32.2 billion barrels per year—Canada’s tar sands oil reserves remain at a finite 168.6 billion barrels, enough to keep the world fueled for less than six years.

Brandt A.R., J. Englander and S. Bharadwaj (2013). The energy efficiency of oil sands extraction: Energy return ratios from 1970 to 2010. Energy.

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