By Teresa Hansen
Editor, Nuclear Power International e-newsletter
Canada’s oil sands industry is booming and many experts predict that as much as $100 billion dollars (Canadian) will be invested in the industry in the next 10 years. Because oil sands extraction operations require large amounts of energy, part of this investment will be spent on generating electricity and making steam. Nuclear energy may be part of the electricity mix.
Cogeneration plants fueled by natural gas are the primary power source for current oil sands operations. The natural gas not only runs combustion turbines to produce electricity for oil-extraction facilities, but it is also used to make the massive amounts of steam and hot water needed to extract and process the bitumen that holds the oil.
Estimates suggest that it takes one barrel of equivalent oil energy (in the form of natural gas) to produce two barrels of refined oil from the Canadian oil sands. Another statistic says that extraction methods such as steam assisted gravity drainage (SAGD) are even more energy intensive, requiring one barrel of equivalent energy to produce one barrel of refined oil. While some experts may dispute these statistics, virtually all seem to agree that extracting oil from the Canadian oil sands is energy intensive.
The process consumes a lot of natural gas and also creates a lot of CO2, which is released into the environment. This addition to greenhouse gas emissions does not sit well with environmentalists. Creating more CO2 not only affects Canada’s commitment to its Kyoto mandates, but also Canada’s commitment to a C$5 billion climate fund initiative to reduce greenhouse gases.
Alberta has no nuclear power plants; its ample supply of coal and natural gas meant that, until recently, most people never saw the need for them. In fact, much of the public and many politicians have opposed nuclear power. However, nuclear power is getting a second look as an alternate energy source for the developing oil sands industry.
Last month in an interview with the Sun chain of newspapers, Gary Lunn, Canada’s Natural Resources Minister, said it is only a matter of time before Canada builds a nuclear power plant to help extract oil from northern Alberta. He wants Atomic Energy of Canada Ltd. (AECL — the group responsible for building Candu nuclear reactors) and a private company to form a partnership to build a nuclear plant. The Sun quoted Lunn as saying, “I think nuclear can play a very significant role in the oil sands. I’m very, very keen (on it).”
The private company in the deal will likely be Energy Alberta Corp., a Calgary-based company formed to be “a profitable energy provider at the lowest cost, utilizing proven nuclear technology to supply steam, electricity and hydrogen to oil sands operators.” Last Spring, Wayne Henuset, Energy Alberta Corp.’s director, said the province’s first nuclear power plant could begin operating in the oil sands within a decade. And, just last week, several Canadian news sources reported that Henuset said four companies have expressed interest in nuclear energy in three Alberta locations — including two in the oil sands. The Canadian Press news agency quoted Henuset as saying “greenhouse gas concerns have pushed nuclear power in Alberta from a pie in the sky concept to a viable alternative.” Henuset also said that a C$3 billion Candu reactor could be operational in Alberta in 2015.
Additional news reports coming out of Canada last week said a consortium, including the research arm of the Alberta government, expects proposals by the end of January to consider the feasibility of using nuclear power and other alternative energy sources in oil sands development. The news reports indicate that the Alberta Energy Research Institute, the federal government and several unnamed companies are interested in the feasibility study.
Reports also said that Husky Energy Inc. became the second company, after Total SA of France, to publicly discuss nuclear as an option for the oil sands. Husky plans to develop a 200,000-barrel-a-day oil sands project called Sunrise and is looking to reduce its reliance on natural gas. Although nuclear is an option, John Lau, Husky’s CEO, was quoted in a Globe and Mail newspaper article as saying, “(Nuclear) is workable but it depends on government. Whether it’s the right time or the wrong time, I still don’t know. You have to be cautious about nuclear. We even talked about nuclear 10 years ago and then we stopped.”
Until recently, Alberta politicians have been against nuclear power. But opinions could be changing. Besides Natural Resources Minister Lunn, former Premier Ralph Klein just last year said nuclear had to be considered.
Building a nuclear power plant in Alberta could not be done without overcoming public and political opposition. However, economic, logistic and environmental factors have moved it to the realm of possibility.