The iconic image associated with Canada’s oil sands development is that of a huge open pit mine, gargantuan dump trucks and enormous tailings ponds, but this production method is being outmoded as producers move to develop deeper bitumen deposits. Although it relies on a relatively young technology, in situ oil sands development is the wave of the future in Northern Alberta’s oil patch.

Commercial oil sands mining operations date back to the 1960′s and the technology that undergirds the process continues to evolve. Notably, some of the most interesting new technology is invisible, as companies are using horizontal drilling technology to recover oil from deposits located greater than 200 feet below ground. These deeper deposits account for 80 percent of total proven oil sands reserves and are expected to account for 80 percent of total oil sands production over the medium term, from about 50 percent mining and 50 percent in situ today.

In situ, or in place, production involves drilling two approximately 800 meter horizontal wells – one producer and one steam injector. Steam is pumped into the underground mixture of sand, clay and oil to melt the bitumen so the resource drains via gravity into the production well below. This technique is known as steam-assisted gravity drainage (SAGD) and it’s become the method of choice for most oil sands producers.

“In situ oil sands production is a pre-adolescent industry,” Greg Fagnan, Director of Operations and Production at the Cenovus Christina Lake facility recently told a group of journalists during a tour of the operation.

Cenovus spun off from EnCana in 2009 to focus entirely on oil sands production. The company boasts operating the industry’s first commercial SAGD project – Foster Creek – which came on stream in 2001 and is reportedly the largest current SAGD operation with output of 120,000 barrels per day.

In situ oil sands production is a pre-adolescent industry,” – Fagnan

One of the company’s goals is to implement at least one new commercial technology each year and Fagnan described their operations as laboratories where they constantly experiment with new production strategies and ideas.

The key to in situ production is the steam/oil ratio which indicates how many barrels of steam it takes to produce one barrel of oil. This metric is important because it determines the level of emissions generated, operating costs, surface footprint size, capital efficiency, water intensity and water usage. At Christina Lake, Cenovus’ SOR is around 2:1, which means they use about 2 barrels of steam to extract 1 barrel of oil, which reportedly leads the industry according to IHS data.

Steam Management is Crucial

The steam is generated from burning natural gas in huge industrial boilers which accounts for a significant portion of an operation’s capital costs. So it’s important to closely monitor steam input volumes to ensure the vaporized water is reaching the targeted oil sands reservoir, or pay zone. Fagnan explained their Produced Water to Steam Ratio (how much of the steam you inject in the ground comes back as produced water) is about 1:1 and they know something is wrong if this diverges, which likely means some of the steam is being lost to a pocket of gas or water known as a “thief zone.” Ideally the Produced Water to Steam Ratio should be 1 barrel in 1 barrel out.

Cenovus has partnered with Akita Drilling to design fit-for-purpose rigs, which is an innovative approach that not all operators take, said Fagnan.

The height and conformance of the reservoir material are key indicators of well productivity, Fagnan said, and excellent conformance is considered evenly steaming the entire 800 foot section of pipe. Glass fiber tubing filled with sensors that measure things like temperature and pressure are sent down into the steam pipe to send readings back to the control room in real-time. If one area of the pipe is getting too hot, they can close slats in the pipe to direct steam to cooler areas where additional melting is required to optimize recovery. This is called a “slotted steam sub,” Fagnan said.

Another breakthrough is what the company calls “wedge wells,” which are “horizontal wells that are drilled in the “wedge” region between two SAGD well pairs to recover oil that can’t be recovered as part of the normal SAGD operation. They recover oil with very minimal or no additional water or natural gas,” according to company literature.

Fagnan said wedge wells allowed Foster Creek to produce an additional 20,000 b/d of oil with no additional steam. Other techniques like the “solvent aided process” and “gas co-injection” are being employed to reduce the amount of steam required to produce oil, which also reduces emissions. In situ production is currently about 2.5 times more energy intensive than mining – meaning it emits 2.5 times more greenhouse gases – so technology that reduces this intensity will be crucial to expanding oil sands production while complying with the tighter emissions regulations being called for by the environmental community and some politicians.

This article was updated on January 3, 2013.