Public-Interest Benefit Evaluation of Partial-Upgrading Technology

56 Pages Posted: 11 Jan 2017 Last revised: 14 Jan 2017

See all articles by G. Kent Fellows

G. Kent Fellows

University of Calgary - The School of Public Policy

Robert Mansell

University of Calgary - The School of Public Policy

Ronald Schlenker

University of Calgary - Department of Economics

Jennifer Winter

University of Calgary - The School of Public Policy; University of Calgary - Dept of Economics

Date Written: January 5, 2017

Abstract

Approximately 60 per cent of Alberta’s oil sands production is non-upgraded bitumen which, after being mixed with a diluting agent (diluent) to allow transport, is exported. A popular view within Alberta — and particularly among Albertan politicians — is that a much larger share of oil sands bitumen should be upgraded in the province. However, without public subsidies or government underwriting, it is uneconomic to build and operate new facilities in Alberta to fully upgrade the bitumen into synthetic crude oil. But there are new partial upgrading technologies being developed that, subject to successful testing at a larger (commercial) pilot scale, can prove to be not only economic in Alberta, but also generate large social and economic benefits for the province. The advantages include a much smaller capital investment, a significant increase in the value of the product and market for the product and, even more importantly, a dramatic reduction in the need for large amounts of expensive diluent to transport the product to market. Indeed, the only diluent required will be that to move the bitumen from the production site to the partial upgrader and this can be continually recycled.

Keywords: Alberta Oil Sands, Oil, Diluent, Bitumen, Upgrading Technology, Synthetic Crude Oil

Suggested Citation

Fellows, G. Kent and Mansell, Robert and Schlenker, Ronald and Winter, Jennifer, Public-Interest Benefit Evaluation of Partial-Upgrading Technology (January 5, 2017). SPP Research Papers, Volume 10, Issue 1, January 2017. Available at SSRN: https://ssrn.com/abstract=2897019

G. Kent Fellows

University of Calgary - The School of Public Policy ( email )

Calgary, Alberta
Canada

Robert Mansell

University of Calgary - The School of Public Policy ( email )

Calgary, Alberta
Canada

Ronald Schlenker

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

Jennifer Winter (Contact Author)

University of Calgary - The School of Public Policy ( email )

Calgary, Alberta
Canada

HOME PAGE: http://www.policyschool.ca

University of Calgary - Dept of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

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