Does Nuclear Energy Have a Role in the Development of Canada's Oil Sands?
Authors: Dunbar R.B. , Sloan T.W. 
Published: March 2010

The Canadian Energy Research Institute (CERI) completed a study for Atomic Energy of Canada Limited (AECL) that compares the economics of a modified ACR-700 Advanced ™ CANDU Reactor with the economics of a natural gas-fired facility to supply steam to a hypothetical Steam Assisted Gravity Drainage (SAGD) project located in northeastern Alberta. The results were initially presented at the Petroleum Society's Canadian International Petroleum Conference 2003, Calgary, Alberta, Canada, June 10 - 12, 2003.

The comparison was made by using discounted cash-flow methodology to estimate the levelized unit cost of steam that could be supplied to the SAGD project from either a nuclear or a gas-fired facility. The unit cost of steam was determined by treating the steam supply facility as a standalone business; it would ensure that all costs are recovered including capital costs, operating costs, fuel costs, and a return on investment.

The study indicated that steam supply from an ACR-700 nuclear facility is economically competitive with steam supply from a gas-fired facility. An examination of key variables indicated that the cost of steam from the nuclear facility is very sensitive to the capital cost of the facility, while the cost of steam from the gas-fired facility is very sensitive to the price of natural gas and possible Kyoto Protocol compliance costs.

Introduction

The Alberta Energy and Utilities Board (EUB) estimated that Alberta's oil sands deposits contain 258.9 109m3 of initial crude bitumen in-place and that over 10% of the initial crude bitumen in-place (28.39 109m3) is recoverable using either surface mining (5.59 109m3) or in situ recovery (22.80 109m3) techniques(1). At year-end 2003, only 2.4% (0.67 109m3) of the initial established reserves had been produced.

The EUB reported that, in 2003, Alberta produced 153.2 103m3/d of crude bitumen, with surface mining accounting for 4% and in situ recovery for 36%. In the same year, non-upgraded bitumen and synthetic crude oil accounted for 53% of Alberta's total crude oil and equivalent production. The EUB reported that it expected total mined bitumen production to increase from 97.7 103m3/d in 2003 to 226 103m3/d by 2013, and in situ crude bitumen production to increase from 55.5 103m3/d in 2003 to 139 103m3/d by 2013. Total bitumen production in 2013, 365 103m3/d, would represent a 2.4 fold increase from 2003. Based on the configuration of currently operating projects, it is estimated that achieving this production level could require approximately 60 106m3/d of natural gas in 2013, a significant quantity relative to Alberta's remaining established reserves of 1,087.6 109m3 at yearend 2003 and total production of 140.6 109m3 that year (Reserve Production Ratio of 7.7 years). Using nuclear energy to generate steam would reduce the oil sands industry's reliance on limited natural gas resources, reduce its exposure to volatile natural gas prices, and reduce its greenhouse gas (GHG) emissions.

The CERI study updates work carried out over the last two decades regarding the possible application of nuclear technology for oil sands development(2, 3).