The latest issue

The Renewables Alternative

One of the biggest knocks against the oilsands is its high level of greenhouse gas emissions—some three to four times that of conventional oil production. This is primarily the result of the high energy inputs required to produce bitumen, which, with a consistency similar to peanut butter, doesn’t flow very well until it is heated. In the case of in situ bitumen production, where the biggest growth in oilsands output is anticipated, this is usually accomplished by burning natural gas—so that in effect, the lowest GHG-emitting fossil fuel is consumed in massive quantities to produce one of the highest GHG-emitting fossil fuels.

What if that energy came from renewable power instead of natural gas? If it did, the oilsands emissions intensity would immediately fall. And if done right, it could also produce more jobs and free up natural gas for other uses, from the transportation network to replacing high emitting coal plants to liquefied natural gas exports.

One good example of that is GlassPoint Solar’s innovative use of solar power to replace natural gas. New Technology Magazine first wrote about this technology when it was in its infancy (Solar-Powered EOR, June, 2011). First applied to heavy oil production in California, it has expanded to perhaps the most logical spot for its application, the sunny and oil prolific Middle East.

A study released this week suggests that full-scale deployment of solar EOR in Oman by the end of 2023 could save 531,000 thousand cubic feet (mcf) of gas per day—not to mention the accompanying GHG emissions that would otherwise be produced—and generate up to 212,000 jobs throughout the sultanate.

The natural gas not burned for EOR can be used for higher-value applications, such as LNG export and power generation, and help to power Oman’s growing economy, Ernst & Young (EY), which produced the report, and GlassPoint, which sponsored it, point out in a press release (copied below).

“Using solar energy for steam production will free valuable gas resources needed to power new industries and diversify the economy. Furthermore, if Oman were to localize the supply chain for solar steam generators, solar EOR could contribute more than $12 billion to Omani GDP over the next decade,” states Mark Gregory, EY chief economist.

The numbers are nothing to sneeze at, and a more diversified economy offers its own advantages. Of course, solar power would not be as effective in the oilsands region of northern Alberta. But other sources of renewable power could be developed. Alberta is a North American hotspot for wind power potential. And while hydro is not one of Alberta’s stronger suits, B.C. and Manitoba are leaders in hydro power production—perhaps that could be tapped to the advantage of both parties.

Or, there is the exciting possibility of developing enhanced geothermal systems (EGS), also known as engineered geothermal systems or hot dry rock geothermal, which, in theory at least, can be developed almost anywhere. Unlike conventional geothermal power such as that developed in California and Iceland that rely on an underground hot water source, EGS involves drilling deep into formations of hot rock (which is ubiquitous if one drills deep enough), fracturing the rock, and circulating water through the chamber in a closed system.

While not yet a fully developed technique (though pilots are under development elsewhere), this option represents a great fit for Alberta, since the province is already home to some of the top expertise in drilling and fracturing in the world, thanks to the oil and gas industry. Mastering EGS could not only lead to big cuts in oilsands GHG emissions, but create a new area of expertise that Alberta companies would be able to market to the world—one that, as a clean and renewable source of energy, would likely be a highly marketable technology in a future carbon-constrained world.

Companies like GlassPoint, which has taken forward an idea many would have shaken their heads at a decade ago, show concepts like these can offer such win-win situations once proven. But given the current rapid pace of oilsands development, it appears likely some form of incentive would be needed to accomplish any level of renewable power use any time soon—the cheap cost of natural gas combined with virtually no incentive to limit GHG emissions to atmosphere does little to encourage innovation or risk taking to find better ways to power the oilsands.

Press Release, January 20, 2014

EY: Solar Enhanced Oil Recovery Can Create up to 212,000 Jobs In Oman

Report confirms that replacing natural gas with solar to fuel EOR generates significant in-country value

MUSCAT, Oman -- According to a new report from Ernst & Young (EY), deploying solar enhanced oil recovery (EOR) in Oman to reduce natural gas used for oil production will have a significant and lasting impact on the country’s economic growth. The report, sponsored by GlassPoint Solar and titled Solar Enhanced Oil Recovery: An In-Country Value Assessment for Oman, found that full-scale deployment of solar EOR by the end of 2023 could save 531,000 thousand cubic feet (mcf) of gas per day and generate up to 212,000 jobs throughout the Sultanate.

“EOR is of strategic importance to Oman’s future oil production, but its use of natural gas creates a gas supply conflict with other national priorities,” said Mark Gregory, EY chief economist. “Using solar energy for steam production will free valuable gas resources needed to power new industries and diversify the economy. Furthermore, if Oman were to localize the supply chain for solar steam generators, solar EOR could contribute more than $12 billion to Omani GDP over the next decade.”

Gas not burned for EOR will fuel industrial expansion

Natural gas used for oil production accounts for almost a quarter of Oman’s total gas consumption, and that number is growing rapidly (Sultanate of Oman’s National Center for Statistics and Information). EY concluded that the full-scale deployment of solar EOR in Oman, in which solar produces 80 per cent of the steam needed for EOR, would redirect up to 531,000 mcf of gas per day by the end of 2023.

The gas not burned for EOR can be used for higher-value applications, such as LNG export and power generation. Additionally, gas can be redirected to the Omani private sector, where dozens of industrial projects have been cancelled or stalled in the past decade due to gas shortages.

“Greater access to natural gas is critical to achieving economic diversification,” said Ahmed Amor Al Esry, partner and oil and gas sector leader at EY Muscat. “Gas used for oil production means less gas to power Oman’s growing economy. Solar EOR can help maximize our existing gas resources, which could have a transformational impact on the future of the Sultanate.”

Establishing a world-class solar power industry in Oman

Oman is well-positioned to grow into a hub for solar EOR technologies and supporting industries. As a result, the nation’s workforce will develop greater expertise across solar technology innovation, project deployment and manufacturing. Experience with solar EOR development will transfer to other energy-related sectors, fostering broader economic growth.

As the pioneer of solar EOR, Oman can seize regional and global export opportunities which can create additional jobs by localizing the solar supply chain and ancillary industries. Coupled with the impact of gas savings, full-scale solar EOR deployment across the region could create up to 212,000 permanent jobs in Oman, as well as an additional 90,000 jobs to support project construction.

“GlassPoint has an opportunity to establish a manufacturing facility and supply chain within the Sultanate to meet growing demand for solar EOR throughout the region,” said Rod MacGregor, GlassPoint CEO. “This investment would create a world-class solar industry alongside Oman’s world-class oil and gas industry.”

“There are also immediate opportunities for solar EOR in Oman’s neighboring countries which are also challenged by gas scarcity and oilfield maturity, but enjoy abundant sunshine,” added MacGregor. “Solar EOR projects can enable substantial economic growth wherever they’re deployed.”

MacGregor presented the results of the EY report at a Tech Talk at the World Future Energy Summit (WFES) on January 20. MacGregor also participated in a Shell Knowledge Series panel discussion with Gulf Intelligence at WFES.

>> Download the executive summary
>> Download the complete EY report
>> Download infographic and press images

GlassPoint is the leading provider of solar steam generators to the oil and gas industry for applications such as enhanced oil recovery (EOR). Oil operators worldwide deploy EOR to loosen heavy oil and boost well productivity by up to 300 per cent. By replacing gas-fired steam generation with solar, GlassPoint can reduce EOR gas consumption by up to 80 per cent. The gas saved can be redirected to higher value uses such as LNG export, industrial development and power generation. GlassPoint’s projects operate in global markets ranging from the Middle East to California.

EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. It develops outstanding leaders who team to deliver on its promises to all of its stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

You are here: Home Arrow Blog Arrow The Renewables Alternative

  • Twitter Feed

  • Blog

New Twitter Updates

msmith Packers Plus’ Commitment To Quality Enables Operators To Install Now, Complete Well Later oilandgas fracturing
About 5 hours ago
msmith Suncor Begins Radio Frequency Waterless Extraction Technology Pilot At Dover Site oilandgas
About 5 hours ago
msmith Advanced Treatment For BOP Control System Fluids Improves Performance, Safety In Field Trials oilandgas
About 5 hours ago
msmith Canada Can Achieve ‘Deep Decarbonization’ While Economy Prospers, Global Competitiveness Is Strengthened, Says Report
About 5 hours ago
msmith DOE Selects Projects To Assess Offshore Carbon Storage oilandgas GHG
About 5 hours ago