Canadian and US Oil Sands Patents
OIL SANDS PATENTS
Canada’s Minister of Natural Resources unveiled Canada's SMR Action Plan* on December 18, 2020 (see following web page titled Canadian Government Announcement). The participating organizations in the SMR Action Plan include numerous oil sands, shale oil and mining firms that may wish to employ SMRs in their operations to provide thermal energy for their operations that does not produce greenhouse gases (GHG) (see the following web page titled SMR Action Plan Participants).
The thermal energy used in oil sands operations currently involves the combustion of natural gas resulting in substantial GHG emissions. This is particularly true of the Steam Assisted Gravity Drainage (SAGD) oil sands extraction technologies which is the most used extraction technology. In addition, once the SAGD process produces the bitumen, it must be processed and upgraded. The Canadian and US patents being auctioned and described below grant an exclusive license to the holder to employ SMR nuclear technologies in oil sands extraction and processing or, alternatively, to collect a royalty from those that do. These patents are being divested by SASOR during January and February 2021 to the highest best offer negotiated.
The oil sands deposits in Alberta are the third largest petroleum reserve in the world behind only Saudi Arabia and Venezuela. It is estimated that the oil sands in Alberta constitute hundreds of billions of barrels of oil that can be economically extracted. Canada is also the largest supplier of oil to the United States. Further, oil sands revenues economic value represents a significant part of Canada's gross domestic product. As a result of recent economic conditions and the onset of the current pandemic, oil sands production has been temporarily reduced dramatically. However, it is expected that the previous level of production of approximately 1.7 million barrels a day of oil produced from the oil sands will quickly resume and, within the next 5 to 10 years, increase to 3 to 4 million barrels per day or more. As a result, SASOR reasoned that, in consideration of the progress of climate change, thermal nuclear energy technologies will be used in oil sands production and processing to avoid causing substantial emissions of GHGs caused by natural gas being used to produce thermal energy.
The majority of oil sand deposits lie beneath a deep overburden making conventional surface mining uneconomic. As a result, in-situ methods are being widely employed and further developed by all major extraction firms. All in-situ oil extraction methods require large quantities of heat and electricity to allow in-situ extracted bitumen to flow. Energy produced by a nuclear reactor produces no GHG emissions. In contrast, the fuel currently used in oil sands production is natural gas which does produce the substantial GHG emissions that are causing climate change and plaguing the oil sands production industry. In addition, the new SMR reactor types that are available have passive safety features that require no reactor operator intervention in the case of a problem in the reactor’s operation. Instead, the reactor is cooled by passive air or water systems and automatically shut down if there is a problem with the SMR's operation eliminating the need for operator intervention. It is clear that the oil sands production industry will lose its "social contract" to extract oil from oil sands deposits if it continues to emit substantial levels of GHGs. In the future the oil sands production industry will embrace the use of nuclear reactors as a means to lower the GHG emissions from oil sands production. Nuclear energy sources will lower the GHG emissions in the oil sands extraction industries to levels at or significantly below those associated with conventional oil production. This change will put oil sands production on a level playing field with conventional oil production significantly enhancing the oil sands industry’s financial performance.
In Alberta, Canada where most oil sands production is occurring, elements of the industry and government have clearly evidenced increasing concern about additional GHG emissions that are attendant upon oil ultimately derived from oil sands that may not be attendant upon other forms of conventional oil production. The use of lifecycle calculations to determine the intensity of GHG emissions from various types of oil production has exacerbated this problem for oil sands operators. The use of nuclear energy technology using SMRs to generate the thermal and electrical energy needed to produce and process oil from oil sands will eliminate the GHG emissions that come from the use of natural gas to produce the thermal energy needed. For those reasons the Canadian government has initiated its SMR Action Plan.