126. NUKE THE TAR SANDS 2

In #19 NUKE THE TARSANDS, I described the old idea of detonating a nuclear device to melt the oil out of the oil sands in Alberta. There's another way to achieve the same end: build a nuclear reactor on site, and use it to replace natural gas as the heat source.

This is an old idea, and Total revived it a couple of weeks ago.

Total May Use Atomic Power At Oil-Sand Project (WSJ, behind subscription wall)
PARIS -- French oil giant Total SA, amid rising oil and natural-gas prices, is considering building a nuclear power plant to extract ultraheavy oil from the vast oil-sand fields of western Canada.

This comes as oil prices -- driven even higher by Hurricane Katrina and now the threat of Hurricane Rita -- are removing lingering doubts about the long-term profitability of extracting the molasseslike form of oil from sand, despite the fact that the output is much more expensive to produce and to upgrade than is conventional crude.

At the same time, prices of natural gas -- which oil-sands producers have relied on to produce the steam and electricity needed to push the viscous oil out of the ground -- have risen 45% in the past year. That is prompting Total, which holds permits on large fields in Alberta that contain oil sands, to consider building its own nuclear plant and using the energy produced to get the job done.Source

Natural gas prices are skyrocketing, and the economic advantages of this approach are getting too big to ignore:

The gas which does the heating can account for 60% of operating costs, so rising gas prices can devastate the economics of the projects.

Gas in Canada could cost $10 per million cubic feet (mcf) by the end of the decade; a study by Atomic Energy of Canada concluded that nuclear power was cheaper when natural gas cost just $4.5 per mcf. That means a $1bn (£560m, E820m) annual saving for the main oil sands operators Suncor, Nexen, ExxonMobil, Shell and Total.Source

With that kind of money at stake, the big players are well aware of it:

CALGARY, OTTAWA -- Total SA's murmurings about using nuclear power to fuel oil sands production in Alberta have opened debate on a topic many big-name players in the industry have been mulling quietly for several years.

While there already was a public study in 2003 that indicated nuclear power made economic sense for the Fort McMurray region, the controversial subject has mostly been discussed behind closed doors.(Source: Globe and Mail (9/23/2005)

It's not clear whether this technique will actually be used. The only other option is to generate heat by burning the oil itself, and that would be a carbon emission nightmare. One thing is clear, however: the oil sands will be produced. It's just a question of whether we're going to do it the dirty way (and waste vast amounts of the oil in the process); or do it the clean way with nuclear. Environmentalists need to get their head around that. The option where we don't produce the oil sands is a utopian dream. It's not on the table.

"There is no environmental minister on earth who can stop the oil from coming out of the sand, because the money is too big," said Canada's environment minister, Stéphane Dion, in an interview.Source