FAIRBANKS, Alaska — Listen to Alaska politicians for too long and it might sound like throughput in the trans-Alaska pipeline has dwindled to just a trickle of the valuable watery light crude that’s grown to be Alaska’s lifeblood.
And after more than 30 years of pumping oil out of the North Slope, it’s clear that reserves won’t last forever. Estimates put proven reserves at roughly 50 or so years, but that’s just the oil that can be shipped with today’s technology.
There’s estimated tens of billions of barrels of what’s called heavy oil, which could likely fill the pipeline well into the next century, but there’s a problem with the stuff — it’s hard to ship.
Imagine how difficult it would be to pump peanut butter over short distances, let alone over 800 miles, and you’ll get an idea of the difficulties of bringing heavy oil to market.
A fledgling technology that was presented to the Senate Resources Committee in Juneau on Wednesday might be the key that could more than double the commercially developable oil on the North Slope.
Steve Yarbro of SNT Ventures, a Los Alamos, N.M. based company, has been developing a process that uses superheated, super-pressurized water to break down the chemical bonds that make heavy oil so sticky.
“What this does is take something with the consistency of peanut butter and turns it into the consistency of water,” he told the commission. “You can take something that crummy and turn it into a pretty nice product.”
Yarbro said the process, called SuperCritical Water Extraction and Refining (SCWER), is based on the tried-and-true process of heating and pressurizing water so it takes on chemical properties that allow it to break down fluids. It’s a process that has been developed to break down radioactive waste.
Typically, Yarbro said, heavy oil is impractical to develop because of the costs and chemicals needed to get it ready to transport.
A barrel of heavy oil will cost $10 to $20 less than light crude, making it impractical for any producer to develop.
The new technology uses existing industrial technology to break down the heavy oil as it’s pumped out of the ground, producing an oil that is chemically identical to what is already in the pipeline. But the advantages don’t stop there, he said.
Because heavy oil is so much more dense than light crude oil, you can put in 100 barrels of heavy oil and get out about 109 barrels of oil that are worth about $10 to $20 more. The process, Yarbro estimates, would cost about $10 per barrel.
It’s a technology that’s been proven in the lab, but Yarbro is looking for investors to test the project on a bigger scale and prove that it works in the field. Yarbro is in talks with the Fairbanks Pipeline Training Center to build a small, five barrel per day project.
“We know the chemistry works and there’s really nothing we can do at the bench scale at this point,” he said. “We need to take the next step so we can build a larger scale pilot so we can truly know where the economics of the project are.”
Yarbro said he hopes to get a capital appropriations from the state in order to avoid the licensing headaches that would come along with private investors with the eventual goal of making the technology widely and cheaply available.
“This seemed to be a reasonable option,” he said. “For the opportunity for the state to invest and make the technology available to a diversity of producers in the state, but we really haven’t given up any option.”
The technology was enthusiastically received by the senators on the commission. Sen. Joe Paskvan, D-Fairbanks, who co-chairs the committee, said the technology has the potential of creating an oil production boom in Alaska. He said it’s a prime example how technology will help extend the life of the pipeline — and keep oil revenue flowing into the state’s coffers.
“The potential use of new technology to open up entire new streams of throughput to the pipeline is a game changer,” he said.
Yarbro said he plans to revisit the state legislature later this session with more numbers and information on what it might cost to start his pilot project.