Is It Waste, Or Is It Feedstock? 

publication 

Winter 2010 - (Environment, Energy & Emissions Trading Brief Winter 2010/2011)

Environment, Energy & Emissions Trading Brief Winter 2010/2011

Virtually all industrial processes produce left over materials that cannot be directly reused in the process. A machine shop produces metal turnings. An ore processing facility produces tailings. Traditionally these leftovers have been disposed of as waste. As pressure has mounted to reduce such waste, it is often discovered that these wastes are worth recovering. Some recent developments in Canada's western oil sands illustrate the point. 

In the last few years the spotlight has been focused on the oil sands and their impact on the environment. Critics point to the energy required to extract the oil from the deposits, the quantities of water consumed and the impact on the environment, to label it as "dirty oil." Whether all of these criticisms are entirely fair, and whether there is such a thing as "clean oil" is beyond the scope of this article. The fact remains that these criticisms have led companies such as GAP, Levi-Strauss, Walgreen's and others to publicize that they have adopted policies to eliminate or minimize use of fuels derived from oil sands. Pressure is mounting in the United States to prevent construction of the Keystone pipeline that would carry oil sands extract to the United States. If this were the only issue, it would be a difficult problem, but the additional issues associated with water availability and tailings ponds threaten to constrain oil sands production.

However, a number of technologies may help the industry address these concerns. The challenge with tailings ponds is that clay in the sand remains suspended in the water for long periods of time. Water with suspended clay cannot be reused in the process, which results in larger tailings ponds. Processes to accelerate the separation of water from the clay are coming on stream, and promise to increase rates of water re-use and reduce the time needed to reclaim and revegetate mined-out areas. Suncor received approval in June 2010 in Alberta for its tailings management plan incorporating this technology.

Not all oil sands deposits are close enough to the surface to be mined, and the oil is extracted in place (in situ) using steam. In addition to bringing bitumen to the surface, the process also brings up highly saline water and condensed steam. In many cases the highly saline water is sent to a disposal well. However, suitable wells are not always available, as was the case at Suncor's MacKay River in situ facility. Proving that necessity is indeed the mother of invention, Suncor developed its "Zero Liquid Discharge" process which results in the ability to recycle about 96% of the facility's water.

A third party, Titanium Corporation Inc. has taken a different view of oil sands tailings and regards them as a potential resource. It has developed processes to recover zircon, bitumen and solvent from tailings water. The happy by product of the process is water suitable for recycling in the extraction process. It has a demonstration facility in operation and is hoping to have a commercial system ready in 2011.

None of these processes was developed overnight. While the particular process for which Suncor has obtained approval to separate water from clay in its tailings ponds has been under development since 2003, it has patents on related processes that go back to the 1980s. Titanium Corporation Inc. was founded in 2001 and filed its first patent application in 2002.

As pressure builds to reduce the environmental impact of industrial activity, and as availability of resources such as water constrain production, all industries face a challenge to make better use of inputs and reduce waste and emissions. Whether a tailings pond is a waste storage facility or a valuable resource depends to a large extent upon one's point of view.

It appears that a number of oil sands producers, including Suncor, Shell and Canadian Natural, are banding together to share their technology to address tailings ponds, with a target of having an agreement in place by the end of 2010 or early in 2011. The concept is that all participants will disclose the technologies that they have developed, which will then be valued. Based on this valuation, the cost of developing the various technologies will be equalized among the participants. The valuation process will be interesting to watch. For instance, as noted above, Suncor has been working on processes to separate clay from tailings water since the 1980s, even though its current successful process is based on work starting in 2003. Will Suncor be permitted to include the cost of developing the earlier technologies, or only the current process that works? The answer will probably depend upon whether the value in having Canada's entire oil sands industry recognized globally as being environmentally proactive is greater than the investment made in technologies that didn't lead to a commercial process.

While the spotlight is presently focused on Canada's oil sands industry, that focus may well shift to other sectors in the future. When it does, those enterprises that have invested the time and money to develop methods to reduce environmental impact and waste generation and to patent their methods of doing so will have a significant competitive advantage over their peers.

This article appeared in Lang Michener's Environment, Energy & Emissions Trading Brief Winter 2010/2011.