Nuclear Power Touted As Steam Source For SAGD

By Elsie Ross, from Nickle's Daily Oil Bulletin

Small-scale high temperature gas nuclear plants could potentially replace natural gas to produce the steam required for SAGD (steam assisted gravity drainage projects) in Alberta, an oilsands conference heard Tuesday.

Two German-designed Pebble Bed Modular Reactors (PBMR) could support 100,000 bbls per day of bitumen production in addition to generating electricity, said Reiner Kuhr, a mangement consultant promoting the technology. The size of the reactor tends to match increments of SAGD expansions of 50,000 bbls per day, producing as much steam as two or three conventional gas-fired generators, he said.

However, before any nuclear plant is built in Alberta there is a need for a regional energy policy and support from industry and government, Kuhr and Ashley Finan, a graduate student in nuclear engineering at the Massachusetts Institute of Technology (MIT) told the Canadian Institute conference. "Right now there is no stability with respect to nuclear so that someone coming in asking to build a nuclear plant has no idea what the policy is or how the province will react," said Finan who recently was part of study that looked at the potential for nuclear power in the Alberta oilsands.

The 500-megawatt thermal PBMR is similar in scale to two 70A gas turbines, said Kuhr, a senior executive consultant Shaw Stone & Webster Management Consultants. "Whatever you can do with two 70As you can do with one PBMR reactor by putting the right equipment on the back-end to make steam or power."

For SAGD, the reactor could produce high-pressure steam that would require only the reactor and some heat exchangers and boilers. At a relatively high temperature of 720 C. for the helium gas, PBMR reactors can run super critical steam cycles, very high efficiency cycles and produce about 200 megawatts of electricity, he told the conference.

The PBMR plant also includes passive safety features which are a step-change over Canadian-made CANDUs and other light water reactors, said Kuhr. A major advantage is that this enables them to be located very close to other industrial facilities such as pipelines or upgraders compared to the CANDUs which require a large exclusionary area, he said.

The PBMR reactor requires a very small amount of material that must be dealt with in terms of fuel production and ultimate disposal, the conference heard. Each of the fuel spheres is about the size of a billiard ball and holds about 20 megawatt hours of energy compared to about one kilowatt hour of energy from a pound of coal or petroleum coke.

In terms of economics, starting with $7 per mmBtu gas and an escalating price over 30 or 40 years, a nuclear reactor could represent net present value savings of $1 billion to $2 billion in natural gas, said Kuhr. There also is value in the CO2 displacement which at the current value of $15 per tonne would amount to about $200 million, said Kuhr.

While the PBMR reactor would be less expensive than a $5 billion or $6 billion CANDU because it is smaller, "the nuclear industry really requires a lot more than a business model, it requires some kind of market pull and public acceptance," he said.

Kuhr was to meet today in Calgary with some industry players to discuss what the industry needs and their reaction to the potential opportunity.

However, even with support from government and industry, the earliest plant construction could begin would be 2013-2014 with 2017 start-up date, he said. That means that any new nuclear reactor would serve a new generation of oilsands projects rather than those already in the planning stages

Replacing natural gas with nuclear energy for oilsands projects offers a number of benefits, including significant reductions in carbon dioxide production while preserving gas for exports, said Finan.

In addition to the PBMR reactor, the MIT study included the Advanced CANDU Reactor (ACR), the next generation reactor which Energy Alberta wants to build at Peace River to provide electricity, and the Enhanced CANDU 6 reactor (current technology). Nuclear power would provide greater price stability for oilsands developments because the price of uranium accounts for a much smaller proportion of the total cost than does natural gas, said Finan. Uranium is also a Canadian resource, she noted.

The study looked at the use of nuclear power to provide steam and electricity for SAGD, and steam, electricity and hot water for surface mining and upgrading.

The most interesting potential application for the CANDU reactors is in the Athabasca oilsands carbonates where there has been discussion about using electrical heating to recover the resources, said Finan. "That would require a lot of electricity and the CANDU is a better size for that."

A CANDU reactor also would be about the right size for a 200,000 bbl per day surface mine with an upgrader and 250 megawatts of electricity on the grid. It would not provide hydrogen for the upgrader.

In analyzing the economics of nuclear power in comparison to natural gas for steam production, the study found that based on available cost information, nuclear energy is in the ballpark with a break-even gas price of $6.75 per mmBtu. Electricity from nuclear power is more expensive which is to be expected given the capital costs for plants, becoming competitive with natural gas plants at gas prices of between $10 and $13 per mmBtu. "We were happy just to be in the ballpark," she said.

The main environmental advantage would be the reduction in CO2 emissions with a savings of about three million metric tonnes per year and about 131 million metric tonnes over the lifetime of a 100,000 bbl per day SAGD facility.

A major challenge for nuclear power in Alberta is public opinion, especially considering the fact there currently are no plants in the province as it has been found persons familiar with nuclear power tend to be more supportive of it, she said.