The manufacture of synthetic gas is rising on the Alberta government’s priority list of industrial research projects as, not least, a productive way to dispose of an environmental byproduct of the oilsands.

“We are accumulating a mountain of petroleum coke,” said Eddy Isaacs, executive director of the government’s Alberta Energy Research Institute and a co-chair of a national technology working group set up by the Canadian Council of Energy Ministers. He described the province’s huge coke habit at a meeting with the Calgary Council of Advanced Technology.

The charcoal-like substance is a byproduct of skyscraper-sized cokers that strip out the heaviest or bottom ends of bitumen at upgraders used by oilsands developments to make light, refinery-ready synthetic crude. The process leaves behind about 20% bitumen, which is too thick to flow in pipelines with additions of thinners and fetches only about half the price of synthetic crude.

Some of the upgrader plant leftovers have always been sold, especially as exports, to steel mills where the material is suitable for use in blast furnaces. But since commercial oilsands production began in 1967, the industry has built up a colossal unsold stockpile that currently stands at 54 million tons, Isaacs reported. The pile is also growing at a rate of 20,000 tons per day, he added.

Most plans to build new plants have been deferred or suspended as a result of fallen oil prices and virtual collapse of the industrial construction loan market in the global banking network. But production in the Florida-sized, 142,200-square-kilometer (56,880-square-mile) northern Alberta bitumen belt grew by 130% to 1.3 million b/d in 2008 from 568,000 b/d in 1999.

Output is still growing. Recently completed plant expansions are still increasing production as they go through commissioning stages that take months at mammoth oilsands operations. A new mega-mine, the Horizon plant built by Canadian Natural Resources, is starting up.

To date only one large gasification unit has been built, and it remains in early startup stages at the Long Lake project developed by Nexen and OPTI Canada. When fully up and running on input of 70,000 b/d of bitumen, the output of synthetic gas is expected to replace about 100 MMcf/d of natural gas that the plant would otherwise buy for its thermal production systems.

Although Long Lake uses known methods, it is taking the synthetic gas manufacturing process to a new scale where it is unproven, and the startup is taking months. The plant stands out as the largest gasifier on the planet, Isaacs said.

Even the Long Lake site only makes a beginning on dealing with the black oil sands byproduct mountain, Isaacs said. He estimated that enough gas could be extracted from Alberta’s daily accumulation of fresh petroleum coke to run six 500 MW power stations. His institute’s research agenda says the bitumen byproduct is so plentiful that it could be raw material for a substantial industrial sideline in gasification that would more than replace about 1 Bcf currently used by oilsands operations. “If implemented on a large scale, this could transform Alberta’s oilsands industry from a net consumer of natural gas to a net supplier.”

The most ambitious research effort currently under way is a C$300-million (US$240-million) co-operative effort by Alberta government and industry agencies. The hydrocarbon upgrading demonstration program is working on integrating gasification, bitumen upgrading and capture and disposal of waste carbon dioxide.

©Copyright 2009Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.