A facility using a new method to produce synthetic crude could be on display in Westlock County within three years, county council heard last week.
“This is the other syncrude story,” an energy executive told county council at the April 10 meeting.
Perry Toms, CEO and co-founder of Steeper Energy, outlined the company’s plans for a $30 million dollar commercial demonstration project, which would be located at the site of the existing Dapp Power Plant.
The hydrofaction technology, a patent-pending process, that would be used in this facility was developed in part by Toms’ business partner Dr. Steen B. Iverson, a Danish scientist, but has its roots in a German process developed in the 1930s to turn high-quality coal into liquid fuels.
“We’ve got a somewhat different approach. We’re taking low-quality fuels and turning them into a high-value, middle-distillate oil,” Toms said.
If all goes according to the developer’s plan, the facility could be commissioned by late 2014 and pumping out 300 barrels per day by 2015.
Toms said Canada as a whole, and the Westlock area in particular, is a good fit for this project because of the large stocks of peat, timber and other biomass. He suggested there could be a benefit to farmers in the area, who often simply burn biomass like peat, wood and hay.
“What these things have is a molecular structure with carbon, hydrogen and oxygen molecule. If we just remove that oxygen molecule, we have a hydrocarbon,” he said. “If it’s organic, if it’s grown, we can convert it to oil.”
He said this technology would use significantly less water than current syncrude projects, and produces fewer carbon emissions. If liquid carbon dioxide is recovered through the process, there could be a net negative emission of carbon dioxide.
Furthermore, biomass is a renewable resource while Alberta’s oil sands are not, and with rising oil prices there is a strong economic argument in favour of this technology as well.
“We’re less expensive, we’re more environmentally benign, we’ll use less overall resource, and produce a product that is complementary (to oil sands syncrude),” he said. “I think that’s a great opportunity.”
Coun. Mike Cook suggested that while it seems like supplies of straw, wood chips and other biomass are limitless, if they’re harvested too heavily it could cause problems for soil quality in the area.
“Some of that’s got to go back into the soil,” he said. “Don’t get me wrong. I’m all for economic development, but somebody’s got to ask the tough questions.”
Toms said that peat, for example, grows at a rate of 70,000 tons per year in Canada, and said he was not interested in over-harvesting the resource; he’s working with Alberta Environment to ensure this project would not have negative long-term effects.
Coun. Bert Seatter raised the issue of how much money and how many jobs would be added to the area, and Toms said about $10 million of the cost would go into the county itself, and in the long term there would be about 10 permanent jobs.
One possible problem that could result from all of this is the increased road use that would come as a result of all the constructing and transporting the finished product, something Toms said he wanted to work with the county to address.
On the other side of the coin, having a first-of-its-kind facility like this in the county would draw international interest and attention.
Toms said while he’s confident the project could yield the results he has predicted, he is still in the process of working on the economic case and ironing out some of the details; his business plan relies on some assumptions about prices, and supplies that still need to be verified.
“The technology is proven, but not yet commercial,” he said.
Councillors in attendance at the meeting expressed interest in seeing this project going forward.
“I think we’re all in favour of diversity in our county,” Coun. Don Savage said. “I think as a council we’re all ready for anything, for development to happen in our county.”
