Opinion: Partial bitumen upgrading could boost Alberta's economy
by Kent Fellows, Robert Mansell and Jen Winter, January 20, 2017, Calgary Herald
"Politicians often speak of the need to “add value” to our oilsands bitumen. They advocate upgrading it here to create jobs in Alberta. Upgrading is the process by which very viscous raw bitumen is processed into a lighter “synthetic crude oil.”
While the higher value for synthetic crude is an argument for full upgrading, one must recognize the costs of this. Unfortunately, those costs are higher than the gain in value. As such, investment in new upgraders is not currently commercially viable. Suncor cancelled its Voyageur upgrader in 2012 and, in 2016, CNOOC suspended its upgrader at ...
Does this dash the Alberta dream of increased domestic processing? Perhaps not. Emerging partial upgrading technologies could not only be economically viable in the province, but also generate substantial gains in employment, labour income, exports and government revenue.
Partial upgrading brings bitumen to something resembling a medium or heavy crude, and at a lower cost per barrel than full upgrading. The Alberta Royalty Review Advisory Panel recognized gaps in several North American refineries that could be filled by this partially upgraded Alberta oil.
A partial upgrader serving that less-competitive market not only appears to hold the potential for investors to make attractive returns in the long term, it would also provide important benefits to Alberta.
First, since partially upgraded crude can be shipped via pipeline without diluent (the product used as a diluting agent), producing it in Alberta would free up pipeline capacity. Diluent also...