AECL-7677

ATOMIC ENERGY V W « L'ENERGIE ATOMIQUEOF CANADA LIMITED V ^ ^ J F DU CANADA LIMITEE

NUCLEAR ENERGY FOR OIL SANDSA TECHNICAL AND ECONOMIC FEASIBILITY STUDY

L'energie nucleaire et les sables petroliferesune etude de praticabilite technique et de rentabilite

A.R. BANCROFTCoordinator / Coordonnateur

Chalk River Nuclear Laboratories Laboratoires ruicleaires de Chalk River

Chalk River, Ontario

March 1982 mars

ATOMIC ENERGY OF CANADA LIMITED

NUCLEAR ENERGY FOR OIL SANDS

A TECHNICAL AND ECONOMIC FEASIBILITY STUDY

A.R. Bancroft - Coordinator

Chalk River Nuclear LaboratoriesChalk River, Ontario. KOJ 1JO

1982 March

AECL-7677

L'ENERGIE ATOMIQUE DU CANADA, LIMITEE

L'ENERGIE NUCLEAIRE ET LES SABLES PETROLIERESUNE ETUDE DE PRATICABILITE TECHNIQUE ET DE RENTABILITE

A.R, Bancroft, Coordonnateur

RESUME

En 1980, l 'Energie Atomique du Canada, Limitée i n t e n s i f i a l ' u n desaspects de ses recherches pour l ' u t i l i s a t i o n de l 'énerg ie thermique pro-dui te par les réacteurs nucléaires CANDU. Un groupe d'étude formé det r o i s compagnies de 1'Alberta évalua la p r a t i c a b i l i t é technique et l ar e n t a b i l i t é d ' u t i l i s e r un réacteur nucléaire pour produire la vapeur néc-essaire pour la récupération du bitume. Ce p ro je t f a i s a i t su i te aplusieurs années de travaux effectués par l'EACL qui i d e n t i f i è r e n t lespro je ts des sables p é t r o l i f ë r e s comme étant les u t i l i s a t e u r s par exce l -lence de l 'énerg ie thermique en quant i té et tenant compte également dela qua l i t é que les réacteurs sont capables de produi re .

On a i d e n t i f i é des concepts d 'app l i ca t ion techniquement val ides u t i -l i s a n t des réacteurs CANDU pour la récupération sur place du bitume dessables p é t r o l i f ë r e s . Pour toute l a durée d'un de ces p r o j e t s , on calculeque l ' u t i l i s a t i o n de l a vapeur provenant d'un réacteur nucléaire o f f r i r a i tune économie subs tan t ie l l e (?5 - 50%) par rapport â c e l l e produi te 3 p a r t i rdu charbon. La vapeur produi te â p a r t i r du gaz naturel se ra i t un peu pluschère que ce l l e produi te â p a r t i r du charbon puisque l ' on p révo i t que l ep r i x du gaz naturel augmentera à un taux plus rapide que l ' i n f l a t i o n . Leréacteur â eau lourde sous pression (PHW) qui a déjà f a i t seo preuves estdes plus appropriés pour les dépôts peu profonds (150 - 250 mètres) qu i nerequièrent de la vapeur qu'à une pression in te rméd ia i re . Pour les dépôtsplus profonds (250 - 650 mètres) l e réacteur PHW peut f ou rn i r de la vapeur3 une plus haute pression avec j ' a i d e de compresseur, mais a l o r s , i l y a uneperte d ' e f f i c a c i t é thermique qui amenuise sensiblement son avantage pécu-n i a i r e . Toute fo is , l e CANDU â caloporteur organique (OCR) peut f o u r n i r lavapeur â haute pression tou t en conservant un avantage pécuniaire élevé.

L'avantage pécuniaire q u ' o f f r e n t les procédés nucléaires de fourn i tu rede vapeur, une économie de $2-4 du b a r i l , est su f f i san t pour j u s t i f i e r uneétude plus étendue de ces procédés en co l laborat ion avec des représentantsd 'A lber ta . Ceci imp l iquera i t l'ej'amen d'un nombre de tSches i den t i f i éesdans ce rapport e t cet te étude conf i rmera i t l e bien-fondé du concept eti den t i f ie ra i t les possibi l i tés de le démontrer.

Laboratoires nucléaires de Chalk RiverChalk River, Ontario. KOJ UO

mars 1982

AECL-7677

ATOMIC ENERGY OF CANADA LIMITED

NUCLEAR ENERGY FOR OIL SANDS

A TECHNICAL AND ECONOMIC FEASIBILITY STUDY

A.R. Bancroft - Coordinator

ABSTRACT

During 1980 Atomic Energy of Canada Limited intensif ied one aspect ofi t s search for process heat applications for CANDU nuclear reactors. Inworking partnership with a number of Alberta-based companies, a study teamassessed the technical and economic feas ib i l i t y of using a nuclear reactorto raise the production steam for the recovery of bitumen. The studyfollowed several years of analysis by AECL which identi f ied o i l sandsprojects as the most appropriate single users of thermal energy of theamount and quality available from reactors.

Technically sound concepts have been ident i f ied for using CANDUreactors for the in-s i tu recovery of bitumen from oi l sandi. Over the l i f eof an o i l sands project a steam supply system based on a nuclear reactor isexpected to offer a substantial cost advantage (25 - 50%) over thealternative system based on coal as the make-up fue l . Steam from naturalgas is marginally more expensive than that from coal because the ccst ofnatural gas is expected to escalate at a rate higher than in f la t ion . Forshallow deposits (150 - 250 metres) using intermediate pressure steam, thecommercially proven Pressurized Heavy Water (PHW) reactor is most suitable.For deeper deposits (250 - 650 metres), the PHW reactor can provide thehigher pressure steam using a compressor, but only with a reduction inthermal efficiency that substantially reduces i ts cost advantage. The CANDUOrganic Cooled Reactor (OCR), however, can provide the high pressure steamrequired with the large cost advantage.

The economic benefit offered by nuclear steam supply systems, asaving of $2-4 per barrel of product, is large enough to jus t i f y thecommitment of a more detailed study. Such a study, which should involveAlberta participants, would provide more information on a number of topicsident i f ied in this report. I t is l ike ly a study would confirm theattractiveness of the concept and define opportunities for demonstration.

Chalk River Nuclear Laboratories•Chalk River, Ontario. KOJ 1J0

1982 March

AECL-7677

TABLE OF CONTENTS

Page

1. Introduction

2. CANDU Performance

3. Oil Sands Concept

4. Steam-Raising Systems

5. Economic Comparison

6. Project Benefits

7. Plan for Further Study

8. References

1

1

3

7

13

18

19

22

ACKNOWLEDGEMENTS

This study of applications of nuclear energy for oil sands (NEOS)was initiated and organized by Atomic Energy of Canada Limited and had theworking participation of the following persons:

AECL - Research Company

AECL - Engineering Company

Alberta Power Limited

NOVA, An Alberta Corporation

Petro-Canada

A.R. Bancroft - coordinatorB. Godden

C.A. McDowall

J.W. Love

R.V. BaerJ.R. Frey

G. Lake

C.E. BurgoinE.M. Foo

G. LuninM. Taherzadeh

A large number of others from these companies assisted in the studyand made contributions on specific topics during its execution. Theirassistance is gratefully acknowledged.

-1-

1. INTRODUCTION

Canada, with an extensive resource-based industrial sector, useslarge amounts of energy to satisfy industrial, transportation, commercialand residential needs, much of it for heat, Over the years Atomic Energyof Canada Limited has assessed how nuclear energy can be used to satisfysome of these needs. The assessments included district heating (1), thetemperature distribution of energy consumed as heat in Canada (2), and theapplication to the Canadian chemical process industry (3), and to oil sandsrecovery (4). Two other AECL initiatives have been taken to increase thecontribution by nuclear energy. The first encourages the use ofelectricity as a substitute for oil where the economics are favourable (5)and the second is the development of small, inherently safe, reactors forlocal heating needs (6).

One conclusion of the studies undertaken to date was that oil sandsprojects were the only ones large enough to use the entire heat output ofCANDU reactors of the size being built for electricity generation. Anotherwas that a more detailed analysis, with contributions by Alberta companiesknowledgeable about oil sands and utilities technologies, was required toassess with more certainty the technical and economic feasibility of theapplication. AECL decided in 1980 to proceed with the study and invitedsome Alberta companies to participate.

2. CANDU PERFORMANCE

The CAitDU Pressurized Heavy Water (PHW) reactor has beencommercially proven for e lec t r ic i ty generation with for ty - f ive unit-yearsof operating experience at Ontario Hydro. Twelve more units are underconstruction in Ontario and four others are nearing completion in Quebec,New Brunswick, Argentina and Korea. Table 1 l i s ts these stations with thestart-up dates.

The performance of Ontario Hydro's Pickering and Bruce reactors hasbeen excellent. Performance rankings done by Nuclear EngineeringInternational have consistently put CANDU reactors at the top of the l i s t(9). For instance, considering l i fet ime capacity factors to the end of1981, seven of the world's top ten reactors (500 MW electr ical and larger)are CANDUs. During 1981 the annual capacity factor for a l l Ontario Hydrounits was 90.1 percent, compared to 85.4 for 1980. This performancecompares with 62.5 and 59.9 percent for the overall capacity factors forthe two types of l ight water reactors in 1981 and 50.5 percent for a l lgas-cooled reactors.

-2-

Table 1

CANADIAN NATURAL URANIUM HEAVY WATER POWER REACTORSIN OPERATION, UNDER CONSTRUCTION, OR COMMITTED

+Name

NPDDouglas PointPickering A

Gent illy 1KANUPPRAPP 1RAPP 2Bruce A

Gentilly 2Point LepreauCordobaPickering B

Hoi sung 1Bruce B

Darlington

Cernavoda 1Cernavoda 2

Location

OntarioOntarioOntario

QuebecPakistanIndiaIndiaOntario

QuebecNew BrunswickArgentinaOntario

KoreaOntario

Ontario

RomaniaRomania

TOTAL

PowerMW electrical

22206515 x 4

250125203203740 x 4

600600600516 x 4

600756 x 4

850 x 4

600600

18 117

net

Unit 1Unit 2Unit 3Unit 4

Unit 1Unit 2Unit 3Unit 4

Unit 5Unit 6Unit 7Unit 8

Unit 5Unit 6Unit 7Unit 8Unit 1Unit 2Unit 3Unit 4

In-servicedates

196219681971197119721973197219711972-

1977197719781979198219821983198319841984198519821984198419861987198919881989199019881989

+ NPD Nuclear Power DemonstrationKANUPP Karachi Nuclear Power ProjectRAPP Rajasthan Atomic Power Project

-3-

The CANDU reactor is also a world leader in the production of processsteam (8). At the Bruce Nuclear Power Development, Ontario Hydro uses largeamounts of steam in a chemical plant to produce heavy water (650 kg/s or 5.2x 10° Ib/h at 1.24 MPa or 180 psi). This steam is raised by a combinationof five separate nuclear units which are also producing about 3000 MW ofelectricity. The steam flows in a pipeline 1.7 m in diameter and 2.1 kmlong. Plans are being madi? to establish an industrial energy park nearbybased on the existing resev»e capacity of this system of l?60 kg/s(10 I lb/h) (7).

For this study into the use of nuclear energy for oil sands anothervariant of the CANDU reactor was considered because of its ability to raisesteam at sufficient pressure to penetrate most of Alberta's oil sandsdeposits (13.8 MPa). The Organic Cooled Reactor (OCR), with a primarycoolant outlet temperature of 400°C, can provide this pressure. The CANDUPHW reactor, if optimized to produce steam, rather than generateelectricity, can achieve 5.6 MPa, which would be useful in the recovery ofabout 20 percent of the in-situ recoverable resource.

OCR technology has been technically proven with the successfuloperation for 15 years of the 60 MW thermal (MWt) research reactor at theWhiteshell Nuclear Research Establishment at Pinawa, Manitoba. By usingthis reactor as the prototype of a larger unit for use in an oil sandsproject it should be possible to make the first OCR project fullycommercial.

Other reactor types have been suggested as sources of heat for oilsands recovery (14, 15, 16). With the limited information available theseveral competing reactor types are compared qualitatively in Table 2.

3. OIL SANDS CONCEPT

The recoverable reserves in the oil sands of Alberta are very large.They are estimated at 30 billion cubic metres (10) to be as large as thecurrent reserves of conventional crude oil for the whole world. This oilsands is an extremely important source of oil for Canada and the rest of theworld during the 21st century.

Some of the bitumen can be recovered from shallow deposits bysurface mining methods. (See Figure 1.) But about 77 percent, based oncurrent estimates, is too deep for that method to be economic and must berecovered by leaving the sand in place. Heating, using steam to reduce theviscosity so the bitumen can flow through the sand, is the currentlyfavoured in-situ recovery method. Other methods, like bitumen combustion,are being tested.

The question addressed by this study was "Is there an opportunityfor nuclear energy to assist in the recovery and processing of bitumen fromAlberta oil sands?" Since it was seen as the first of a possible sequenceof technical and economic feasibility studies of increasing detail it waskept as simple as possible. Only if the result of the first study waspositive could a more comprehensive study be justified. For this reasononly those aspects of the concept central to technical feasibility andcost were studied.

-4-

Table 2

COMPETITION CROM OTHER NUCLEAR REACTOR TYPES FOR OIL SANDS APPLICATION

Steam pressure

Capital cost

Fuelling cost

Fuel type

CANDUOrganicCooledReactor

aboutri ght

medium

low

1-2%*enriched

CANDUPressurizedHeavy WaterReactor

toolow

medium

low

natural

LightWaterReactor

toolow

medium

medium

3%enriched

MagnoxReactor

aboutri ght

high

medium

natural

HighTemperatureGas-CooledReactor

higher thannecessary

high

high

5-20%enriched

Immediate fuelreprocessing required

Commercial operatingexperience

Remain competitiveindefinite future

Steam cost

no no no no probably

none

probably

low

extensive

probably

medium

extensive extensive little

probably unlikely probably

medium high high

* CANDU reactors which use enriched fuel would require an assuredsupply of enriched uranium or plutonium. As a major internationalsupplier of uranium, Canada is in a strong position to assure thissupply and/or the technology to produce the fuel itself. Naturaluranium is 0.7% U-235.

Figure 1

RECOVERY METHODS FOR ALBERTA OIL SANDS

RESOURCEAVAILABLE

*

5 0 -

100

DEPTH OFOVERBURDEN

(m)

SURFACE MINING12%

NO COMMERCIAL PROCESS11%

IN-SITU RECOVERY77%

0—:

75

150

INJECTIONSTEAM PRESS.

(MPa)

3.5

800-—18.0The resource is not uniformly distributed at all depths

-6-

The most attractive opportunity for nuclear energy wz judged to besuoplying steam for the in-situ recovery of bitumen. The followingfeatures and conditions were chosen to accommodate Alberta bitumen recoveryexperience and trends in processing technology:

(i) Bitumen is recovered by injecting SO percent quality steamat 13.8 MPa (2000 psi) into the oil sands formation. Thesteam is not radioactive.

(ii) Steam is produced at 820 kg/s, which is the capability of aCANDU reactor of standard design (2000 MW thermal or 600 MWelectrical). This matches the requirement of an oil sandsproject of the current large size (approximately 25 000nr/d) assuming an oil-to-steam ratio of 0.4, i.e., 0.4volumes of oil are produced for each volume of water u?edas steam.

(iii) The bitumen upgrader uses a hydrogen-addition process thatmaximizes the yield of liquid synthetic crude oil.

(iv) The upgrader is optimized to be energy self-sufficient sothat bitumen production steam is supplied entirely by thenuclear steam plant.

(v) The decoupling of the upgrader and the product-ion steam. supply allows the latter to be designed for an 80 percentcapacity factor, which is within the capability of a CANDUsystem, while the upgrader is designed for 90 percentcapacity factor.

(vi) The 80 percent capacity factor for the production staamsystem is consistent with the large thermal inertia of theseveral thousand wells in various stages of being steamedor producing at any time. The production field providesthe equivalent of a base load and eliminates the need for"load-following" over short times (minutes, hours).

(vii) Only that electricity required for nuclear plant supplyreliability reasons (50 MWe) is generated by the steaiiisupply system. (This is a conservative assumption open torevision.)

(viii) A back-up steam supply system fuelled with natural gas isprovided. It is specified as 50 percent of uesign capacityfor this study, although until nuclear supply reliabilityis demonstrated by operation as part of an oil sandsproject 100 percent back-up would probably be provided.

- 7 -

The choice of an upgrading process that maximizes the yield of l iquidproduct is important to this study because i t allows the competingsteam-raising systems to be compared in isolation from the rest of the o i lsands project. The choice could also be important to a project ownerbecause i t would allow a different company to own the steam supply plantand operate i t as a u t i l i t y to a customer.

A c r i t i ca l consideration for an o i l sands project is the supply anduse of water. Since water is not abundant in Alberta i t is necessary torecycle the water that is recovered with the bitumen. This is true for a l lenergy sources, not just nuclear. The recovered water must be p r i f i e d toremove bitumen and suspended solids. The steam-raising and handlingsystems must be capable of accepting water containing a high concentrationof dissolved solids, some of which are quite corrosive. Some water isrequired as make-up to balance that which displaces bitumen in theformation and is also used for disposing of the waste streams, usually intodeep formations that do not communicate with the surface or ground watersor with the oi l sands formation.

4. STEAM-RAISING SYSTEMS

Systems based on four different energy sources were assessed duringthe current study- They are described in Figure 2 and in Table 3.

Pressurized Heavy Water Reactor

This concept is based on the CANDU reactor for the 600 MWe generatingstation (11). The large turbine-generator is removed and a 50 MWegenerator used to provide station e lec t r ic i ty requirement. Thetemperatures throughout the steam-raising system are shown in Figure 3.Because the current design of the CANDU-600 produces secondary steam at 4.7MPa this type of reactor is best suited to an in-s i tu recovery projectrequiring intermediate pressure steam. However, for the current studyusing high pressure steam i t is necessary to use a turbine-drivencompressor to boost the pressure to 13.8 MPa. This reduces the thermaleff iciency of the concept to 55.5 percent because part of the energy wouldbe lost in compression. This is a substantial reduction that is reflectedin proportionately higher cost for the high pressure steam. Although steamcompressors of the design required do not exist , the technology to designthem is considered to be well enough established that the^'r use isconceptually sound.

In the steam-raising system, only clean water flows into the steamgenerator. The d i r ty water recycled from the bitumen recovery operation isheated par t ia l ly in a heat exchanger and then to i ts f inal temperature bymixing i t with superheated steam from the compressor.

Figure 2

NEOS CONCEPTS(NEOS - Nuclear Energy For Oil Sends)

PHW

P2O

SGm•rm

tHX

TC J. to••••••••«

i D S H l

organic^ coolant

1 COALi H.P.; UTILITY% BOILER

riMI j

NATURAL jGAS IFIELD jBOILER '

production steam

(Cold Lake-natural gas make-up fuel)

recycle water

make-up water

DSH - riesuf arheater SG - steam generatorHX - .jet exchanger TC - turbine/compressor

DESCRIPTION

CONCEPT CYCLE

TOTAL FUELENERGY MWt

HEAT INPUT TO CYCLE MW tELECT. GENERATOR OUTPUT MWe

NET HEAT TO OIL SANDS MWt

CAPACITY FACTOR ASSUMED (%)

OVERALL EFFY. OF CONCEPT (%)INJECTION STEAM AT13.79 MPa, 80% QUALITY (kg/s)MAKE-UP WATER REQUIRED (Kg/s)

WATER DISPOSAL RATE (kg / s)SYNTHETIC CRUDE PROD'N (m3/d)

(APPROX.) (bpd)

PHW

Fig. 22156

2064

50

1196

80

55.5

498329225

15,458

(97.300)

OCR |

Fig. 220842064

50

1917

80

92

819180

82.4

25,475

(160,290i

COAL

Fig. 222821917

Nil

1917

8084

819180

82.4

25,475

(160,290)

NAT. GAS

Fig. 223961917

Nil1917

80

80

819180

82.4

25,475

(160,290)

I

TABLE 3 TECHNICAL COMPARISON OF THE CONCEPTS CONSIDERED

RECYCLEWATER *

WATERTREATMENT

OIL REMOVAL &SEDIMENTATION

21 "C

PREHEATER

PUMP PUMP

MAKEUP _ 21°CWATER ~~*

EXTERNALCOOLING

STEAM SUPPLYTO OIL SANDS13.8 MPa 335°C80% DRY

(DE-IONIZATION)

FIGURE 3 PHW CYCLE

-11-

Organic Cooled Reactor

The flow sheet for the steam cycle is shown in Figure 4 and is based onan earl ier study of a commercial-scale OCR (12). The outlet temperature(400°C) of the organic l iquid coolant is high enough that 13.8 MPa steam canbe raised in a ter t iary c i rcui t without using a compressor. This yields athermal efficiency of 92 percent, half again greater than for the PHWsystem. An intermediate heat transfer c i rcui t of Dowtherm is included as anextra barrier between the high pressure steam system and the low pressure (2MPa) primary coolant. This prevents dir ty water, recycled after beingseparated from the bitumen, from entering the primary coolant system of thereactor, in which i t could be unacceptably corrosive. I t also v i r tual lyeliminates the possibi l i ty of radioactivity from the fuel being injectedinto the ground with the steam.

Some features of the heat exchanger system for raising steam from dir tywater require careful attention. However, raising steam with a hot l iquidis less d i f f i cu l t than with a much hotter gas. The OCR steam-raisingconcept is therefore technically sound.

Coal

This concept uses two u t i l i t y - type high pressure boilers. Thetechnology for this system was assessed by Esso Resources for application tothe Cold Lake oi l sands project and found to be wanting (13). The majoruncertainty was the technical feas ib i l i t y of boil ing dir ty water in verticalf i red tubes. To eliminate this uncertainty in the current study, asecondary c i rcu i t containing clean water is used. This is similar to theDowtherm c i rcu i t used for the OCR.

Long steam lines would be required to distr ibute the steam from the twocentral steam-raising units to the injection wells. This is the same forthe PHW and OCR concepts, but not for the natural gas system outlinedbelow.

Natural Gas

Natural gas may not be a candidate fuel for raising steam for an oilsands project because Alberta government policy discourages its use forthis purpose. However, the concept was assessed during this study toprovide a more complete analysis of the economics of the nuclear energyplant. The use of many small field-boilers scattered throughout therecovery field is considered to be demonstrated technology and is proposedby Esso Resources for the Cold Lake project (13). The concept assessed inthe current study is based on this technology.

350 t; JL—-r

PRIMARY HEATEXCHANGERS

OiL REMOVAL AND \SEDIMENTATION )

PREHEATER BOILER

340°C

STEAM SUPPLY- • TO OIL SANDS

13.8 MPa, 335"C80% DRY

RECYCLE WATER

MODERATORCOOLER

GENERATOR

EXTERNALCOOLING

KEY

SALINE WATER

HEAVY WATER

DOWTHERM

— — — — — —— STEAM

PRIMARY ORGANIC

foi

FIGURE 4 OCR CYCLE

-13-

5. ECONOMIC COMPARISON

The economics of the four concepts are compared using a discountedcash flow analysis for the cost of providing steam for thirty operatingyears. This covers all costs, including return on investment, appropriateto a private utility in one case and to an oil company in another. Capitalcosts are based on construction at an Alberta site that requires a labourcamp. The construction schedule is 72 months for nuclear and coal and 36months for natural gas. The components included in each concept are listedin Table 4. Installed costs are given in Table 5.

Table 4

COMPONENTS INCLUDED IN CAPITAL COST ESTIMATE

PHW OCR COAL NAT.GAS

Basic steam source, no. of units

Turbine-driven compressors

Intermediate heat transfer circuit

Additional water treatment formake-up and recycle water

Cooling tower

Turbine-generator (50 MWe)

Steam distribution system

Scrubbers (Flue gas desulphurization)

Other costs for auxiliary buildings,services- common processes,power, etc.

Back-up steam supply(50% capacity gas-fired boiler)

1

yes

no

yes

yes

yes

yes

no

i

no

yes

no

no

yes

yes

no

2

no

yes

no

no

no

yes

yes

140

no

no

no

no

no

no

no

yes

yes

yes

yes

yes

no

yes

no

-14-

Table 5

CAPITAL COSTSIN MILLIONS OF 1981 DOLLARS

PHW OCR COAL NAT.GAS

Physical Assets 862 862 500 81

Eng. & Construction Costs 265 265 118 24

Other Costs 77 77 86 12

Initial Capital Costs 1,204 1,204 704 117

Net Thermal Capacity 1,196 1,917 1,917 1,917

•Specific Capital Cost 1,007 628 367 61

*The Specific Capital Cost is the I n i t i a l Capital Cost divided by theNet Thermal Capacity and is expressed in dollars per ki lowatt.

This shows clearly the higher capital cost for nuclear plants and theadvantage that OCR offers over PHW for steam at 13.8 MPa because of i tshigher thermal eff iciency.

Operating costs are more d i f f i cu l t to summarize. Fuel cost for thenuclear plants is based on 1981 prices escalated at near the rate ofin f la t ion defined for this study. Two prices, 30 and 55 1980 dollars perton, are used to cover the possible range for coal delivered to an o i l sandss i t e . Coal cost is escalated at the rate of in f la t ion . The price used for

-15-

natura) gas is that projected to the year 2020 by Alberta Power Limited andNOVA, An Alberta Corporation. This price escalates faster than the rate ofinflation. Costs for labour, materials, taxes, etc. are appropriate to anAlberta site.

The rules for the economic comparison were chosen to reflect:

- the predicted rates of inflation over the 30-year operating life ofthe project,

- financing with 75% debt and 25% equity,costs of capital and discount rates appropriate to a utility andto an oil company,

- straight line depreciation at 3.33% per year, and- income tax at 47% with no rebate.

Sensitivity analyses were done, but not reported here, for increasedcapital costs (+20%), increased nuclear fuel cost (+100%), increaseddiscount rate and reduced income tax.

The economic analysis for the most probable cases is summarized inTable 6. Part 1 gives the present-worth cost-of-service for the life ofthe project expressed in 1990 dollars. This shows the project cost savingbetween coal {at $30/t) and nuclear (OCR) to be 2805 million dollars, foreconomic conditions appropriate to a utility. This is about 1 billion 1981dollars. These same figures, expressed differently in Part 2, show nuclear(OCR) to be 0.63 times the cost of coal. In Part 3, the numbers areexpressed as 1990 costs of steam levellized over the life of the project.For the range of parameters included in the sensitivity analysis, there wasno case where coal was cheaper than nuclear (OCR). The cost saving fornuclear was generally in the range 25 - 50 percent of the cost using coal.This saving is equivalent to 2 - 4 1981 dollars per barrel of syntheticcrude oil. Figure 5 shows costs for steam at 13.8 MPa and illustrates thatcapital is the dominant cost for nuclear and operating (fuel) for coal andnatural gas.

The concepts chosen for analysis during this study supply steam at13.8 MPa, pressure high enough to recover bitumen from essentially all ofthe Alberta oil sands deposits. Thus the OCR reactor, with its capabilityto raise high pressure steam, can offer a substantial cost advantage forrecovery from 96 percent of the deposits using in-situ recovery methods.(See Table 7.) The PHW reactor can offer the same cost advantage fordeposits that are shallow enough to be penetrated with the 5.6 MPa steam,which it can raise without using a compressor. This applies to 21 percentof the resource recoverable by in-situ methods. For deposits requiringsteam at intermediate pressures the cost advantage offered by the PHWreactor decreases gradually from approximately 0.6 times the cost ofcoal at 5.6 MPa to no cost advantage at 13.8 MPa.

Table 6

Capital parameters

ECONOMIC EVALUATION OF STEAM SYSTEMS

Nuclear CoalNatural

Gas

Return onInvestment

DiscountRate

PHW •OCR 30$/t 55$/t

Part 1 Present worth costs in mil l ions of 1990 dollars

11.25 a 13 4685 4685

14 b 20 4065 4065

Part 2 Present worth costs relat ive to coal at 30$/t

11.25 13 1.00 0.63

14 20 1.16 0.73

Part 3 Levellized steam costs in 1990 $/GJ c

11.25 13 • 20.7 12.9

14 20 27.0 16.9

7490

4890

1.00

1.00

20.6

20.3

11350

6960

31-3

28.9

8300

4560

1.11

1.02

22.9

18.9

a - economic conditions generally appropriate for an Alberta u t i l i t y

b - economic conditions generally appropriate for an Alberta resource company

c - 1 GJ = 0.95 million British thermal units

3691-K

figure 5'

60

SO

40

S/GJ

30

20

10

COMPARISON OF STEAM COSTS(in ascalatad dollars)

PHW

1991 '95 2000 10 1991 95 2000 1991 '96 2000 10 1991 95 2000 '10

3

5

. 4 - 5.

.6-13.

13.

6

8

8

0.

0.

1 .

6

6-1

0

.0

0

0

0

.6

.6

.6

-18-

Table 7

APPLICABILITY OF CANDU REACTORSFOR DIFFERENT DEPTHS OF OIL SANDS DEPOSITS

Depth of Percent of Steam Approximateoverburden in-situ pressure cost of steam

recoverable relative to coalresource*

m % MPa PHW OCR

150-250 21

250-650 75

650 96

* At the current state of development in-s i tu recovery methods must beused for 77 percent of the resource (see Figure 1).

6. PROJECT BENEFITS

There are several important conclusions to be drawn from this study:

(i) There are technically sound concepts for using the CANDU PHWand OCR reactors to provide steam for the in-situ recovery ofbitumen from Alberta oil sands,

(ii) Over the life of an oil sands project a steam supply systembased on the OCR offers a substantial (25-50%) cost advantageover the alternative system based on coal as the make-up fuel.The same advantage applies to the PHW reactor for projectsneeding intermediate pressure steam.

(iii) The economic benefit offered by a nuclear steam supply systemis large enough to justify the next level of commitment andanalysis. AECL encourages that commitment and is willing toparticipate if sufficient interest is shown by Albertaparticipants.

The direct benefit of cheaper steam translates into lower costsynthetic crude oil. The difference hoUt.an coal and OCR in Table 6 isequivalent to 12-25 1981 dollars per cubic metre or 2-4 1981 dollars perbarrel, which is a significant fraction of the cost of producing syntheticcrude oil. This should be a benefit to all Canadians because it wouldresult in cheaper fuel and give a better balance of payment through reduced

-19-

purchases of foreign o i l . The improved economic attractiveness of o i lsands projects can mean earl ier development of this resource that is ofstrategic importance to Canada's long-term oi l supply. In competition withsome other sources of l iquid fuels the development of the very large andwell-defined o i l sands is less speculative. At a time when funds arescarce, developing dependable supplies is important.

There are specific benefits to the region in which the project islocated. These include jobs, provincial taxes and the development ofdesign, construction and manufacturing capability in a new f ie ld that hasconsiderable export potential. Good performance of the OCR variant of theCANDU r- :.ctor in an oi l sands project would probably stimulats act iv i ty inth is f i e l d and lead to the commitment of OCR elect r ic i ty generatingstations and possibly to OCR application in the Venezuelan oi l sands, wheresimilar recovery techniques are required.

Another benefit is reduced environmental impact. Nuclear reactors areclean. They do not cause acid rain through sulphur dioxide emission, donot produce large volumes of solid waste (ash) and do not disturb farm landfor mining or transportation of fue l . Should the study proceed to Phase 2,an assessment w i l l be done to determine the environmental impacts of anuclear plant at an in-s i tu oi l sands plant.

7. PLAN FOR FURTHER STUDY

A schedule for an unimpeded oi l sands project is shown in Figure 6.Phase 1 has been completed and is reported here. Further work is jus t i f iedi f a specific o i l sands project in Alberta can be ident i f ied for which anuclear plant is a possible energy source. The other jus t i f i ca t ion isrecognition by a number of Alberta groups that nuclear energy is apotential ly important contribution to the long-term development of the o i lsands resource. These possibi l i t ies are being explored by AECL todetermine interest in continuing the study.

I f the study does advance to Phase 2, " I n i t i a l Concept Des'gn," i tw i l l be necessary to address a number of questions during a two-yearperiod:

- def in i t ion of o i l sands project concept- ident i f icat ion of the most probable f i r s t project- concept def in i t ion of OCR to f i t an o i l sands plant (OSP)- conceptual design and cost analysis of whole o i l sands project- redef ini t ion of OCR R&D requirements to complete development- environmental/social impact assessment- evaluation of competition from other nuclear reactors- def in i t ion of future Alberta industry involvement- completion of market analysis- implementation of public information program.

-20-

These tasks would be completed by a team of participants with theassistance of engineering and other consultants. By preliminary estimatePhase 2 would require about 40 man-years of effort. It would confirm(or not):

(i) the attractive economics for nuclear energy

(ii) the ability to license the OCR reactor, and

(iii) the worth of continuing the project to Phase 3.

Phase 3, a more detailed conceptual design, would be justified only ifit was based on a specific oil sands project. Some research anddevelopment would be done to providr information for design and safetyanalysis of the commercial OCR. This would be the end of the developmentperiod. Phases 4 and 5 cover the design, construction and operation on acommercial basis.

Figure 6

ACTIVITIES SCHEDULE - NUCLEAR ENERGY FOR OIL SANDS PROJECT

YEAR

STAGE

NEOS PHASE

1969

NUCLEAR ENERGYFOR OIL SANDS

PROJECT

OCRDEVELOPMENT

1975

CONCEPT

NEOSIDEA

EXPLORATION

ESTABLISHOCR

TECHNOLOGY

1981 f 1982/83

DEVELOPMENT

1 I 2

NEOSCONCEPT

DEFINITION

INITIALCONCEPTDESIGN

I1984

I CONCEPT DESIGN FOR| SPECIFIC PROJECT

I 3

1987

DESIGN/LICENSECONSTRUCT

OSP DESIGNAND APPROVAL

OCR DESIGN ANDAPPROVAL

OCR DEVELOPMENTFOR DESIGN ANDSAFETY ANALYSIS

OSP DESIGNAND CONSTRUCTION

KI"OCR DESIGNANDCONSTRUCTION

1993

OPERATE

5

OSP/OCROPERATION

OCR DEVELOPMENT CONTINUINGFOR IMPROVED DESIGN

AND OPERATION SUPPORT

-22-

8. REFERENCES

(1) Lyon, R.B. and Sochaski, R.O., "Nuclear Power for Distr ic t Heating",Atomic Energy of Canada Limited, report AECL-5117 (1975).

(2) Puttagunta, V.R., "Temperature Distr ibution of the Energy Consumed asHeat in Canada", Atomic Energy of Canada Limited, report AECL-5235(1975).

(3) Robertson, R.F.S., "The Application of Nuclear Energy to the CanadianChemical Process Industry", Atomic Energy of Canada Limited, reportAECL-5232 (1976).

(4) Puttagunta, V.R., et a l . , "A Role for Nuclear Energy in the Recoveryof Oil from the Tar Sands of Alberta", Atomic Energy of Canada Limitedreport AECL-5239 (1976).

(5) Melvin, J.G., "E lect r ic i ty /Oi l Substitut ion", Atomic Energy of CanadaLimited, report AECL-7O67 (1980).

(6) Hilborn, J.W., "Small Reactors in a Neutron-Abundant World", presentedat The International Inst i tute for Applied Systems Analysis (IIASA)Workshop on A Perspective on Adaptive Nuclear Energy Evolutions:Towards a World of Nuclear Abundance, Laxenburg, Austria, 1981 May 25.

(7) Seddon, W.A. "Nuclear Process Steam for Industry, Potential for theDevelopment of an Industrial Energy Park Adjacent to the BruceNuclear Power Development", Atomic Energy of Canada Limited, reportAECL-7426 (1981).

(8) Anderson, D.E., et a l . , "The CANDU Nuclear Reactor and Process Heat:Canadian Experience and Recent New Developments", Paper 81-WA/NE-20presented at the Winter Annual Meeting of The American Society ofMechanical Engineers, Washington, November 1981.

(9) "Nuclear Station Achievement 1980", Nuclear Engineering International,P.43, March 1981.

(10) Alberta Energy Resources Conservation Board, Report on Proceeding No.800065: "Estimates of Ultimate Potential and Forecasts of AttainableProductive Capacity of Alberta's Crude Oil and Equivalent", Jan. 1981.

(11) Atomic Energy of Canada Limited Engineering Company, "CANDU 600",Atomic Energy of Canada Limited, unpublished report No. PP-26 (1979).

(12) Sochaski, R.O., et a l . , "OCR Power Station Options and Costs", AtomicEnergy of Canada Limited, report AECL-6436 (1980).

(13) Esso Resources Canada Limited, "Application to the Energy ResourcesConservation Board of Alberta regarding Make-up Fuel for the Cold LakeProject", Application Nos. 770866, May 1978, and 800664, Sept. 1980.

-23-

(14) Perrett, R.J., et al., "Nuclear-energy Application Studied as Sourceof Injection Steam for Heavy-Oil Recovery", Oil and Gas Journal,August 3, 1981.

(15) Rao, R., et al., "Application of the HTGR in Tar Sands Oil Recovery",General Atomic Company, report GA-A16364 (1981).

(16) Kuenstle, K., et al., "The Generation of Process Steam for theRecovery and Transformation of Fossil Energy Resources using NuclearEnergy", p.334, vol.3, Proceedings of the 2nd World Congress ofChemical Engineering, Montreal, October 1981.

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