In August 2007, a post titled Extracting Heavy Oil: Using Toe to Heel Air Injection (THAI) introduced readers of The Oil Drum to a technology for producing an upgraded extra-heavy oil from Alberta Tar Sands without the environmentally messy and energy-intensive surface mining procedures that currently dominate extraction. The post provided a first-look at producing and partially upgrading Alberta bitumen in situ. In this post we make preliminary estimates of the Energy Return on Investment (EROI) of the THAI process.

The Alberta Tar Sands continued to garner interest through the first half of 2008 because of declining conventional oil production in Canada, the apparent success of the Steam Assisted Gravity Drainage (SAGD) process and the increasing price of crude oil. Today they are still of interest as the countries of North America (and around the world) desire cheap, abundant crude oil from politically stable regions (See Unconventional Oil: Tar Sands and Shale Oil - EROI on the Web, Part 3 of 6). However the subsequent financial collapse during the second half of 2008 has caused many tar sand projects to be deferred. In fact, Canada's oil-sands industry has hit the skids, spreading a deepening gloom over Alberta's economy, and to some degree, across the country. Some expansion projects that were under way in the Fort McMurray region have been put on the shelf, as oil companies slash their budgets to reflect the new economic environment in which they operate – that is – a world of lower oil demand and, at least compared to the summer of 2008, low oil prices.

This past week, courtesy of Leanan and Gail it seems that there have been more than the usual number of stories on natural gas developments and the potentials of formations such as the Utica shale, the Haynesville shale, and the Marcellus shale. These are all relatively tight deposits that have only become economic because of increasing gas prices and advances in technology. So I thought it might of interest to explain just a little of that technology, and why it costs so much more for the horizontal well. So the post is largely going to be on horizontal wells, vertical natural fractures and slick artificial ones. To “thank” Gail I am also going to try and describe a slide on ethanol use that I saw at a talk I went to this week on Global Warming by Richard Stegemeier, a member of the NAE, and lest it has been missed I will end with a reference to the Worlds Worst Wind Farm.

To begin, Abqaiq, like most giant fields, has been around for a long time, and when it was first developed, by a relatively small group during the Second World War, there were many other things going on that limited development so that it took 4 years to go from drilling the first well to the fifth. Technology was not nearly as advanced as it is now, and the wells were spaced considerably further apart than the spacing I placed mine at in the model. Further while I had estimated the OIP as being some 62 billion barrels, based on porosity, in reality the number was half that. I am grateful that both westexas and plucky underdog had the reasons for this.