Title: Canadian entrepreneur looks to Utah oil sands
Sub-title: Possible hurdles include gaining acceptance for a new technology, funding and regulatory approval.
Alberta’s massive oil sands have attracted a slew of energy sector players interested in developing them or in supplying businesses that do. So at first glance it’s no surprise that Earth Energy Resources would locate there. What is more interesting is that according to Glen Snarr, its president, the company’s first major development may be in Utah.
“Utah has excellent oil sands resources,” says Snarr. “However most of these cannot be economically extracted using conventional methods. The new technologies, processes and workflow methods we are proposing would make them so.”
Earth Energy Resources currently holds a 100% interest in 7,835 acres under lease from the State of Utah School and Institutional Trust Lands Administration (SITLA) in the PR Spring deposit. Snarr estimates that these include 250 million barrels of recoverable high quality bitumen. The company estimates that getting production going would take between 18 to 24 months, after funding (totaling $35 million) is obtained.
Widely dispersed resource, new technology
While Utah is hardly known as an energy powerhouse, according to Snarr, the state contains more than half of America’s known oil sands. However the profile of the Utah reserves is different than the Athabasca oil sands. “The Utah oil sands are relatively disaggregated, and spread out over a relatively wide area,” says Snarr. “Although bitumen quality is very similar to that found in Athabasca, it has a much lower sulphur content, which means that it is a “sweeter” oil, that provides a more favorable feedstock for refineries.”
To deal with the challenges of bringing Utah’s resources to market, Earth Energy Resources proposes using what it calls the “Orphus Process,” which differs from the Clark Process used in conventional Athabasca oil sands extraction. The proposed workflow involves setting up a series of small 2,000 barrel per day production facilities which can be easily set up, and moved as the resources in one particular area are recovered. Production could be expanded as needed by the addition of more facilities which would scale up the overall extraction capacity.
“Digging up the ore and hauling it away in 400 ton trucks like they do in Alberta just won’t work,” says Snarr with a laugh. “We need a more resource focused methodology.”
To extract the sweeter Utah bitumen, Earth Energy Resources proposes using an environmentally-friendly citrus-based extraction chemical to replace the substantial mechanical energy and caustic soda mixture used in the Clark Process. This new process sharply reduces the quantity of middlings produced in the process, and thus eliminates the need for tailings ponds.
“The result is a more compact overall footprint, which means reduced environmental impacts and a process that is both energy and water efficient,” says Snarr.
That said, despite the promising Utah resources and new extraction technology, raising funds to fund the venture hasn’t been easy. Private equity money has been tight since the financial meltdown, and the idea of investing in innovation, with its associated increased business risk, does not sit well with some right now.
However Snarr remains optimistic. “Sure there are hurdles, but we are a bit ahead of our time – sort of like where Athabasca was 40 years ago, when people were scratching their heads wondering if it would work,” says Snarr. “We are profitable at $50 per barrel oil. With the high oil prices we have seen lately, we will definitely get this off the ground.”
After that, if all goes well Snarr hopes to partner with a company that is interested in using the Orphus technology to do resource development in Athabasca itself, where he is convinced it can also be applied.
Peter Diekmeyer (email@example.com) is CIM Magazine’s Quebec correspondent.
© 2010, 2009, 2008, 2007, 2006, 2005, 2004, 2003, 2002, 2001, 2000, 1999, 1998
Peter Diekmeyer Communications Inc.