ENERGY

A buried treasure

Mining the metals in Alberta’s oil sands

DIANE BRADY September 10 1990
ENERGY

A buried treasure

Mining the metals in Alberta’s oil sands

DIANE BRADY September 10 1990

A buried treasure

ENERGY

Mining the metals in Alberta’s oil sands

As global tensions mounted this summer over Iraq’s invasion of oil-rich Kuwait, some oil industry observers predicted that the crisis would create renewed interest in Alberta’s oil sands, which contain more than 600 billion barrels of recoverable petroleum. The cost of extracting significant quantities have been prohibitive. But John Rendall, an American engineer, is now patenting a process that he says could make earnings from the oil produced from the oil sands pale in comparison with the potential yield of gold and other valuable metals that are lodged, along with petroleum, in the oil sands. According to Rendall, who filed his patent on June 2, his method of extracting minerals from the oil sands involves the use of a solvent to separate clay laden with valuable metals from mined oil sands. In January, Rendall, president of Solv-Ex Corp. of Albuquerque, N.M., acquired a 6,000-acre oil-sand lease 320 km north of Edmonton. Rendall says that he hopes

to start demonstrating his new, and potentially profitable, method of mining the oil sands by the end of this year.

Rendall said that, if his method succeeds in

extracting gold, silver, aluminum, titanium and iron ore from the sands, the technology could help to reduce the region’s vulnerability to shifting world oil prices. Currently, two Alberta firms—Syncrude Canada Ltd. and Suncor Inc.—are producing 245,000 barrels a day of synthetic crude oil by injecting steam and water into the oil sands to separate the oilcontaining bitumen, which is then upgraded for commercial use. Both companies estimate that world oil prices have to remain above $20 a barrel before oil produc^ \^ay can^

weight metal used in the space and defence industries.

Unlike Syncrude and Suncor, Rendall’s system would use solvents and hot water to extract oil from the sands. In addition, Rendall says that his method would employ a mixture of

sulphuric acid and water as a solvent to separate the mineral-rich clay from the sand once the oil deposits have been removed. Rendall said he hopes that his firm would be processing up to 50,000 barrels of oil a day by 1996. Said Richard Volman, a reporter who writes about energy issues for the Alberta daily newspaper Fort McMurray Today. “As a concept, it’s amazing. The question is whether it works. If it does, it could be a leap forward of monumental proportions.”

For their part, spokesmen for some of the major oil companies operating in Alberta expressed reservations about Rendall’s plans. Mavis Walmsley, communications manager for Fort McMurray-based Syncrude, which produces 185,000 barrels of synthetic crude a day, said that her firm was “taking a wait-and-see attitude towards Solv-Ex, because the process needs more work.” Said William Yurko, chairman of the Edmonton-based Alberta Oil Sands Technology and Research Authority, a provincial Crown corporation that has given Solv-Ex about $3.3 million in research funds since 1986: “If he wants to set up a facility to test the process, we’re all for it. Resources in this province are just beginning to be tapped.”

Alberta’s oil-sands deposits cover about 23,200 square miles of territory—an area approximately equal to that of Nova Scotia. The oil sands’ estimated 600 billion barrels of recoverable oil roughly equals even the Middle East as one of the world’s largest known oil reserves. Still, much of the oil-sands petroleum is considered difficult to extract, except in the few sites where deposits are near the surface. For that reason, most mining takes place in a 1,250-square-mile area along the banks of the Athabasca River, near Fort McMurray in northeastern Alberta.

Even in that region, companies must separate bitumen, the hydrocarbon base of synthetic crude oil, from a tar-like mixture that also includes sand, clay and water. Steam is used to extract the bitumen in liquid form so that it can be pumped out. The bitumen is then upgraded to synthetic crude by taking out some carbon or adding hydrogen from natural gas, making it light enough for further refining into gasoline, heating fuel and other petroleum products.

Rendall is seeking an investor willing to put up the $10 million that he says he will need to launch the oil-sands pilot project. But he added that he is confident that the project will go ahead by the end of the year. He acquired his oil-sands lease through a deal with Calgarybased Can-Amera Oil Sands Ltd. Under the terms of the agreement, finalized in January this year, Rendall’s firm received the lease in return for $500,000. Since then, however, oil price increases prompted by the crisis in the Middle East have spurred more interest in the established oil-sands operations. Still, if Rendall's system is successful, it could prove an even greater incentive for developing Alberta’s vast oil-sand reserves—not just for the petroleum they contain, but for their potential mineral riches as well.

DIANE BRADY