1Development of an Optimal Energy Infrastructure for the Canadian Oil Sands Industry in a CO2-constrained World

The upgrading of oil sands bitumen to Synthetic Crude Oil (SCO) consumes substantial quantities of power and hydrogen, which are produced using fossil fuels. The resulting combined CO2 emissions from hydrogen and power production for bitumen upgrading make the oil sands industry one of Canada’s largest greenhouse gas (GHG) emitters. This study quantitatively identifies the GHG emissions associated with oil sands operations in the Athabasca region and outlines an optimal strategy to mitigate them. The above will be accomplished by developing a mathematical optimization model. The model minimizes the costs of the energy required to produce SCO by determining the optimal mix of power and hydrogen plants with built-in CO2 capture required to meet a given GHG reduction target, from a number of alternative technologies and fossil feedstocks. GHG emissions are presented according to process section and SCO producer, for production rates calculated based on mining rates for the year 2003. The producers included in the study currently extract and upgrade bitumen to SCO in the Athabasca region in Alberta, Canada