Economic assessment of natural gas decarbonization technology for carbon emissions reduction of bitumen recovery from oil sands

Abstract

We present an economic evaluation of natural gas decarbonization (NGD) applied to reduce CO2 emissions from oil sands recovery processes. NGD produces hydrogen by removing carbon from natural gas (NG) fuel and generates valuable carbon black product instead of the unwanted CO2 emissions. The produced hydrogen is used to generate steam by combustion, a process that produces water, which offsets a significant fraction of process water losses from bitumen recovery. Significant energy and cost penalties are associated with processes that reduce CO2 emissions, and the process described here is no exception. The research documented in this paper is a first attempt at evaluating the economic viability of an integrated NGD and bitumen recovery process. The energetics and economics of a combined oxy-combustion and NGD are assessed and compared with the conventional steam assisted gravity drainage (SAGD) on the basis of energy efficiency and economic viability. Other factors considered are the effect of oil prices, CO2 tax and credits, and potential revenues from the carbon black product. The findings from this study are also useful in broadening the discussion on the factors that affect the development and commercial deployment of decarbonization technologies under carbon regulations in Alberta, Canada. This study and its findings, though at a preliminary stage, would help prospective investors and the oil sands industry to make investment decisions towards research and development and commercialization of this technology.