Nuclear Energy for Oil Extraction in Canadian Tar Sands: Integration of Nuclear Power with In-Situ Oil Extraction Professor Andrew C. Kadak Professor of.

Nuclear Energy for Oil Extraction in Canadian Tar Sands: Integration of Nuclear Power with In-Situ Oil Extraction

Professor Andrew C. KadakProfessor of the Practice

Massachusetts Institute of TechnologyNuclear Science & Engineering

Life Cycle Assessment Special Nuclear Session

November 3rd, 2006, 1:30pm-3:00pm

University of Calgary

2MIT Department of Nuclear Science and Engineering

Integration of Nuclear Power with In-Situ Oil Extraction

Outline• SAGD• Plant Scenarios• Nuclear Plant Designs • Thermo-hydraulic Analysis• Economics• Carbon Dioxide• Conclusion• Future Work



In-situ SAGD



Scenario One: • Production – SAGD Process Heat Only• Electricity from off-site source• Product – Diluted bitumen

Scenario Two: • Production – SAGD Process Heat and Electricity for on-

site needs• Product – Diluted bitumen

Scenario Three: • Production – SAGD Process Heat, Electricity for on-site

needs, and Hydrogen for upgrading needs• Syncrude



Evaluation of Reactor Options• ACR-700 (1983MWth, 731MWe)

– Primary coolant: Light Water, Moderator: Heavy Water – Primary Outlet: 326°C, Fuel: Canflex bundle; SEU(slightly

enriched Uranium) ~2%

• PBMR (400MWth, 165MWe)– Primary coolant: Helium, Moderator: Graphite– Primary outlet: 900°C, Fuel Pebbles: 60mm, outer dia.,

encloses ~11,000 C/SiC coated fuel microspheres of UO2

• AP600 (1940MWth, 600MWe)– Primary Coolant and Moderator: Light Water– Primary Outlet: 316°C, Fuel: 4.20 wt % 235U, sometimes MOX

(mixed oxide) fuel



Extraction Parameters• The conditions for extraction vary depending on the

quality of the tar sand bed• Calculations for this study were conducted using low

quality tar sand bed conditions

Based on a 100,000 Bbl/day bitumen extraction plant

Pressure

2 Mpa 6 MPa

Heat Transfer Required

(MWth)

Low Performance

1230 1264

High Performance

820 843



Layout for Steam Cycles

• Either two ACR-700s or two AP600s in parallel would be acceptable for this scenario

Scenario Bitumen (Bbl/day) SynCrude (Bbl/day)

1 332,000 -

2 199,000 -

3 - 114,000



Layout for Gas Cycles

• Eight PBMRs would be acceptable for this scenario

Scenario Bitumen (Bbl/day)

SynCrude (Bbl/day)

1 253,000 -

2 166,000 -

3 - 98,000

850°C



Economics



Purpose of economic analysis

1.Should natural gas or nuclear be used for the SAGD extraction process?

2.Should the electricity requirements of the plant be fulfilled by buying electricity off the power grids, or by making it at the plant?

3.Should the hydrogen required for the bitumen upgrading process be bought from private suppliers, or produced at the plant?

**This is meant to be a comparison between nuclear and natural gas energy sources for this application, not an estimate of the actual full cost of the facility.



Economic Assumptions• All costs are in US dollars (US$)

• The lifetime for the plants are assumed to be 30 years, and the Net Present Value (NPV) is calculated for a 10% discount rate

• No inflation is assumed

• Easy access to Alberta electricity power grid is assumed, price is ~US$0.05/kWhr

• Buying price of hydrogen is assumed to be ~US$2.50/kg of H2

• Natural gas price is assumed to be $8.00/mmBtu



Economic Assumptions, Cont’d.• A 90% learning curve is assumed for building additional

nuclear reactors

• Costs do not include that of processing and upgrading plants as these are held constant and independent of heat source used.

• 4 categories of cost: capital, O&M, fuel, and decommissioning

• 3 final types of costs looked at: Cost of Process Heat, Cost of Electricity, and Cost of Hydrogen Production



Nuclear Power Cost AssumptionsAP600

1 unit

AP600

2 units

ACR-700

1 unit

ACR-700

2 units

PBMR

Capital Rate ($US/kW)

1687.2 1520 1693.40 1525.55 1250

Fuel Rate (US mills/kWhe)

5.0 5.0 2.6 2.6 6.0

O&M Rate (US mills/kWhe)

8.0 10.0 7.05 8.82 3.0

Decommisioning Rate (US mills/kWhe)

1.25 1.0 0.6175 0.494 0.6

Operating Life (yrs)

30 30 30 30 30



Hydrogen Production Costs

Natural Gas PBMR ACR-700 AP600

Hydrogen Cost per unit bitumen ($US/Bbl)

Make Hydrogen

1.754 1.636 1.901 1.811

Buy Hydrogen

2.506 2.506 2.506 2.506



Cost Comparison of Natural Gas v. NuclearCost Comparison of Natural Gas vs. Nuclear

0

500

1000

1500

2000

2500

3000

3500

Process Heat Electricity Hydrogen

Type of Cost

Lif

etim

e C

ost

ove

r 30

yea

rs (

$M)

Market Natural Gas PBMR ACR-700 AP600



Sensitivity of Total Cost to Changes in Capital Cost

PBMR ACR-700 AP600

Change in Total Cost for a 25% increase in Capital Cost

11.3% 13.9% 12.5%

Capital cost is an initial fixed cost, unlike natural gas cost which is a recurring cost over the lifetime, i.e. capital cost has no future volatility

For a 25% increase in the price of natural gas, the gas extraction costs rise 18%.



Economic Conclusions• Given current natural gas costs, nuclear is a viable alternative for

producing process heat for SAGD.

• Producing electricity using nuclear power is more cost-effective than buying it off the Alberta power grid or producing it using natural gas.

• While Steam-Methane Reforming has historically been a cheaper process than High Temperature Steam Electrolysis, the cost of HTSE with nuclear power is now comparable to SMR due to high natural gas cost.

• Overall, using nuclear power is a competitive alternative to natural gas due to high prices and volatility of natural gas, and new compliance regulations of the Kyoto protocol



•Canada has agreed to reduce greenhouse gas emissions by 6% relative to the 1990 level of 612 Mt by 2012. (575 Mt)

•Canada’s Climate Change Plan (2002/2005)

•Reduce emissions to 305 Mt by 2012

•In 2012 (at 100Mt CO2) oil sands emissions would represent 17% of the total Kyoto target (575 Mt), and 29% of Climate Change Plan target (305 Mt)

Kyoto Protocol



Conclusions• Nuclear Process Heat applications in Oil Recovery from

Tar Sands are possible for steam production, electricity generation and syncrude refining with hydrogen production at costs that are lower than natural gas.

• Canadian Kyoto agreements will be challenged without the use of nuclear energy in oil sands extraction processes. Approximately 100 Mt CO2 emissions are avoided.

• Additional site specific analyses are needed to refine the nuclear energy applications to meet industry needs.



Updates & Extensions Needed

• Updated process requirements• Updated nuclear capital costs• Hard look at practical implementation challenges• Safety implications

• More in-depth CO2 analysis

• More in-depth natural gas displacement analysis• Regulatory needs and insurance issues• Conceptual business plan possibilities



AcknowledgementsThis study was prepared as an MIT class design project in the Department of Nuclear Science & Engineering. The authors of the original study included:

G. Becerra, E. Esparza, E. Helvenston, S. Hembrador, K. Hohnholt, T. Khan, D. Legault, M. Lyttle, C. Murray, N. Parmar, S. Sheppard, C. Sizer, E. Zakszewski, K. Zeller

Assistance and information were also provided by:

Ryan Hannink of MIT, Dr. Julian Lebenhaft of AECL, William Green of MIT, The Canadian Nuclear Safety Commission, Westinghouse Electric Company, James Fong of Petro-Canada, Bilge Yildiz of Argonne National Laboratory, Brian Rolfe of AECL, Michael Stawicki and Professor Mujid Kazimi of the MIT Nuclear Science and Engineering Department, Thomas Downar of Purdue, Daniel Bersak of DRB photography, MIT alumnus Curtis Smith of INL, and the faculty members of the MIT Department of Nuclear Science and Engineering.



Questions

Nuclear Energy for Oil Extraction in Canadian Tar Sands: Integration of Nuclear Power with In-Situ Oil Extraction Professor Andrew C. Kadak Professor of.

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