In-situ facilities can be a lot smaller and do not require the same economy of scale as oil sands mining operations, making them cheaper and faster to bring online. Many leases are mostly the same and have the same legal language. Smaller processing plants and higher production rates have greatly improved the profitability of in-situ extraction, which has become increasingly more popular in the oil sands and expects to lead the growth in bitumen production through the next few decades. In-situ extraction of bitumen has become increasingly popular in recent years and expects to lead the growth in bitumen production over the coming decades. IN-SITU VS MINING – ITS NOT A CHOICE: It is very important to stress that the reservoir actually dictates the bitumen extraction technique used. Fresh water consumption rates are therefore much lower than mining operations which require large volumes of water to slurry the oil sands.

The bitumen and condensed steam emulsion contained in the lower well is pumped to the surface and sent to a processing plant, where the bitumen and water are separated. At the processing plant, the water is removed from the bitumen, treated and recycled back into the process. In contrast, mining facilities can be safely shutdown in less than a day and restored back to nameplate capacity within only few days. Michigan had more underground natural gas storage capacity than any other state in the nation with over 1 trillion cubic feet of capacity. Forest Service estimates that the 1,500 wells would require more than 5 billion gallons of water to unlock more than 68 million barrels of oil and more than 4.2 trillion cubic feet of natural gas. Latest developments and contracts related to oil and gas pipelines, at regional level, wherever available. Alberta’s oil sand mining footprint is actually only 3% when measured by square footage.

No tailings pond: Much of the sand contained in the oil sands deposit is left in the ground and never comes to surface. More GHG emissions: In-situ extraction requires a large volume of steam to heat the bitumen in the ground. Once steam is cut off to the well head, the reservoir will begin to cool. I mean, if that well pays out say 150%, would it not then become valuable to us? The flow is then reversed so that the bitumen/water emulsion can be pumped back to the surface. The recovered water is treated and recycled back into the process. More efficient water usage: In-situ operations use water for steam production, which is mostly recovered and recycled back into the process plant. This steam continues to be injected for several weeks in order to fully saturate the reservoir. High pressure steam is injected into the reservoir to heat the bitumen and reduce its viscosity. High pressure steam is injected into the top well, or the injectionwell. The hot steam heats the surrounding bitumen.

The bitumen is sent to an upgrader for further processing or diluted and sold directly to market. ‘Keep tracking the fundamental factors’ this is something that you may have heard too often in the energy market. In-situ operations therefore do not require large tailings storage ponds and have no need for reclamation. Lower cost: Since there is no mine or tailings pond, in-situ operations require much less capital, are quicker to build, easier to bring on-line and generally less expensive to operate. In-situ extraction has a much smaller footprint than oil sands mining, uses less water and does not produce a tailings stream. In-situ facilities typically require 1/5th the fresh water volume of an equivalent-sized mining facility. Not easy to stop and start: In the event of an unexpected disruption, it is difficult to just shut-off steam, particularly in new facilities. Clearly, that would be a ’14 event. Smaller footprint: The surface area required for the wellheads is very small relative to the oil sands reserve deposit size. Lower certainty: There is a larger degree of uncertainty in terms of positioning of the wellheads and expected recovery rates. The difference lies in the positioning and number of wellheads.