Thirsty oil sands highlight need for wastewater treatment and recycling

29-10-2013 | Foresight | Junwei Hafner-Cai

Water treatment and re-use in the Canadian oil sands
The rise of non-conventional oil resources such as oil sands and shale gas – which rely on highly water-intensive technologies – is addingto the growing demand for water in the oil and gas sector. Canada is ranked third in proven oil reserves behind Saudi Arabia and Venezuela, and about 97 % of its oil reserves are in the oil sands. In 2012, Canadian oil sands operators produced 1.8 million oil barrels per day (bpd), and production is expected to triple by 2030, reaching 5.2 million bpd.

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Water plays an important role in oil sands extraction and production. Two of the most widely used methods are open pit mining and in-situ technologies, which typically rely on steam-assisted gravity drainage. This involves injecting steam deep beneath the earth to soften and separate the viscous bitumen. The recovered steam and water is then treated and recycled to generate more steam that is re-injected into the earth.

The in-situ method requires an average of 1 barrels of net water for every barrel of synthetic crude oil, with water recycling rates of 80 %, while open mining operations use 3 barrels of net water for every barrel of synthetic crude oil produced, with 72 % of the water being recycled.1 Beyond using a large volume of water, the oil sands extraction process also generates wastewater containing high concentrations of acids and chemicals, which requires responsible treatment solutions.
The government of Alberta has issued guidelines limiting the amount of freshwater withdrawals and regulating water recycling and management. For instance, in-situ operators must have a 90 % recycling rate for facilities that use freshwater and 75 % for operations using saline water, driving continuous investments in water treatment and water reuse in the Canadian oil sands.

Each year, over USD 700 million is spent on treating and re-using mine water and in-situ process water. Assuming that existing technologies and other factors remain constant, open pit mine and in-situ operators are expected to handle a total of 10.6 billion barrels of water per year by 20302, representing an estimated USD 2.5 billion water treatment and recycling market in the Canadian oil sands industry. Some of the technologies used to treat water include desalination, reverse osmosis, advanced filtration systems and chemical absorbents. Companies such as Veolia and Newalta, which provide wastewater treatment solutions to the oil and gas industry, are expected to bene-fit as stricter regulation on water standards and water re-use open up market opportunities.

"Projected growth in the Canadian oil sands industry combined with stricter laws regulating water withdrawals and water recycling offer opportunities for companies providing waste-water treatment and recycling technologies."

1 "Canada's oil sands, shrinking window of opportunity," Ceres, May 2010
2 "Driving a stake in the sand," GWI Issue 7, July 2013

junwei-hafnerJunwei Hafner-Cai
Senior Analyst
RobecoSAM Sustainable 
Water Strategy

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