Using Infrastructure Optimization to Reduce Greenhouse Gas Emissions from Oil Sands Extraction and Processing

Abstract

The Alberta oil sands are a significant source of oil production and greenhouse gas emissions, and their importance will grow as the region is poised for decades of growth. We present an integrated framework that simultaneously considers economic and engineering decisions for the capture, transport, and storage of oil sands CO₂ emissions. The model optimizes CO₂ management infrastructure at a variety of carbon prices for the oil sands industry. Our study reveals several key findings. We find that the oil sands industry lends itself well to development of CO₂ trunk lines due to geographic coincidence of sources and sinks. This reduces the relative importance of transport costs compared to nonintegrated transport systems. Also, the amount of managed oil sands CO₂ emissions, and therefore the CCS infrastructure, is very sensitive to the carbon price; significant capture and storage occurs only above 110$/tonne CO₂ in our simulations. Deployment of infrastructure is also sensitive to CO₂ capture decisions and technology, particularly the fraction of capturable CO₂ from oil sands upgrading and steam generation facilities. The framework will help stakeholders and policy makers understand how CCS infrastructure, including an extensive pipeline system, can be safely and cost-effectively deployed.