February 24, 2009 / 10:05 PM / 9 years ago

Canadian firm may have cure for oil sands headache

CALGARY, Alberta (Reuters) - Alan Fair had been trying to solve the problem of oil sands tailings on and off for three decades, when 500 ducks died after landing on a pond of the waste at Syncrude Canada Ltd’s Alberta site last spring.

<p>A truck drives down a street at Syncrude's oil tar sands operation near Fort McMurray, Alberta in this May 23, 2006 file photo. REUTERS/Todd Korol/Files</p>

Then the quest became more crucial for Fair, Syncrude’s research and development manager. The incident attracted global criticism of the environmental impact of Canada’s oil sands.

“There’s no question it conveys a little more urgency around this, but we’ve recognized for some time that we have a tailings issue,” he said.

Fair is in charge of testing a range of ways to halt the expansion of toxic tailings ponds and cleaning them up, from using centrifuges to separate the liquids from the solids to forming new lakes in mined-out pits.

But he is also open to ideas from outside Syncrude, the world’s largest oil sands producer, like one from Gradek Energy Inc, a small firm with a unique technology aimed at cleaning up one of the industry’s biggest headaches and a major reason why green groups have tagged the resource “dirty oil.”

“It’s really exciting because all of a sudden we’re not trying to kick a door down. The door’s open,” Keith McCrae, Gradek’s chief operating officer, said.

Privately held Gradek has talked to Syncrude for about eight years, and now aims to test its method in a pilot project with the oil sands producer’s participation in August.

After development costs of about C$6 million ($4.8 million), a pittance in oil-industry terms, it has proven itself on a small scale, company founder Thomas Gradek said.

At its center are proprietary polymer beads, which look like Corn Pops. They attract tar-like bitumen -- the oil part of the sands -- while repelling water. They first proved useful in cleaning up oil spills.

If all goes well, not only will developers be able to use them to stop the spread of contaminated ponds, which now cover more than 50 square km (20 square miles) of northern Alberta landscape, but recover oil that goes to waste, Gradek said.

“We will eliminate the tailings ponds that are there within 10 years, and they will not have any more tailings ponds generated because we’re going to be taking their end-of-pipe (waste),” Gradek, an engineer by trade, said.

Tailings are generated in the extraction part of production, where companies use hot water and chemicals to separate the tar-like bitumen from oil sands that they mine in sprawling open pits.

Besides water and unrecovered bitumen, the waste contains sand, silt, clay heavy metals and naphtha. It takes decades for all of the fine tailings to settle to the bottom of the ponds.

The stew represents contamination danger to groundwater and nearby rivers, but also gives off methane fumes, seen as a major contributor to global warming.

As U.S. President Barack Obama visited Canada last week week, oil sands jumped into the public eye again. They are the largest oil resource outside the Middle East and seen by governments as key to North American energy security.

But criticism is growing over the impact of development on air, land, water and local communities. The duck deaths, for which Syncrude now faces provincial and federal charges, emboldened opponents.

This month, the Alberta government tightened regulations for tailings, demanding that operators prepare plans and report on the ponds annually, reduce accumulations and specify dates for construction and closure of ponds.

With Gradek’s process, new tailings will be blended with tailings from the ponds, known as mature fine tailings, then the beads are added and the mix is shaken. Clay and the other fine particles are separated from the bitumen-coated beads.

Then the oil is washed from the beads using recycled naphtha and processed with the rest of project’s crude.

The beads are then dried and can be reused hundreds of times, Gradek said.

Fair, who believed early in his career the tailings problem would be solved by now, cautioned the real test will be continuous use on a large scale and in the harsh winter conditions of northern Alberta, where other methods have failed.

($1=$1.25 Canadian)

Reporting by Jeffrey Jones; Editing by Frank McGurty

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