Certainly.
Good afternoon, members. I am pleased to appear before you today to speak about research and development efforts at Syncrude. The Syncrude R and D department exists to directly support the Syncrude operation. For us, the goal is to develop and deploy technology innovations to deliver enhanced reliability, profitability, and environmental performance in the Syncrude operation. You will see that innovation in the oil sands is about far more than producing oil. It's about producing oil in an environmentally responsible way.
Research was actually the first department at Syncrude; it was formed in 1964, which was 14 years before we produced our first barrel of oil. Today, about 100 scientists and technologists work at our research facility here in Edmonton. Syncrude has a proven track record for developing technology suited to the oil sands. We have more than 140 Canadian and U.S. patents for our technologies, and many of these are in use in the oil sands today by other companies as well. More than half of our $60 million annual research budget is spent on environmental research activities. We remain one of the top 50 R and D spenders in Canada.
We have a commitment to R and D. As part of it, we are responding to public concerns and government requirements for more rapid reclamation of former mining and tailings areas. As part of these efforts, we collaborate with universities across Canada and with other organizations on research projects aimed at continuous improvement in the development of Alberta's oil sands, as well as the environmental aspects of that development.
I want to show you a chart, which hopefully you have in front of you, of our resource distribution for 2013. This is expressed in terms of our total effort, which includes expenditures. We can see by looking at the tailings and fluid fine tails management category and at the environmental research category that together these form about 58% of our total effort. We also have efforts in our core process improvements, equipment reliability, bitumen processing—which is on our upgrader side—and in analytical research as well.
We also support different aspects of environmental R and D. I'm going to talk about emissions for a second. We have supported such projects as the flue gas desulphurizer, which was installed and operational in 2006 with our Coker 8-3 expansion, the Syncrude emissions reduction project, which will reduce sulphur emissions by more than 60%—this is a $1.6 billion project that does not increase production and is going to start operation in 2013—and further, reclamation research, which includes research on land forms, soils, and revegetation, such that sustainable closure landscapes are achieved when we are finished with mining activities. There are a couple of specific research chairs in this area: forest land reclamation with the University of Alberta and mine closure with the University of Saskatchewan.
In the areas of tailings and water management, we have several projects under way. I'm going to speak to a few specific examples of those as well.
Of course, research and development efforts sometimes result in rapid deployment into the field of equipment and process technology, and in some cases, decades of research precede full-scale field demonstration. One of those examples is what we call Base Mine Lake. The research behind Base Mine Lake began back in 1989 in the field, with tailings being placed in demonstration ponds and then capped with water. They have been carefully monitored over the last two decades to get an understanding of the biological and ecological development. You can see some images in these slides that demonstrate how, over the course of time, these tailings-capped ponds developed.
That has led us to what we call the Base Mine Lake demonstration project. This is a much larger version of those earlier test pits—about eight square kilometres in size. At the bottom of this lake is a mined-out pit that contains clay-based tailings materials. This will eventually become a clay-bottom lake similar to other lakes in our region, but will involve essentially two phases.
Since December 31, 2012, this particular body is no longer a tailings facility. It's been turned over to us as a lake facility. There are no longer any active tailings going into that location.
The initial phase of development will be a water remediation phase through ecological development of the lake, and in the long term this will become part of the closure landscape in Syncrude's overall closure picture.
We're also doing novel research in the areas of water treatment. An example would be the use of petroleum coke. Coke is a by-product of our refining operation. The coke particles are in fact activated carbon that have the ability to do detoxification of naphthenic acids, and they're also a filter for suspended solids. If you take a look at the image on the upper right, you can see a container of coke particles, a container that has slightly yellow-tinged process water. When we pass the process water through the coke particles, we end up with the clearer water that you can see, and it sufficiently removes naphthenic acids so that it can support aquatic life, such as the goldfish that you see there. In fact, we have a tank down at our research facility where these goldfish are thriving today.
The very bottom image on this page is a much larger test pit that we have constructed. We have several of them, in fact, where we've placed coke particles, and we're flowing our process-affected water through that now and testing the results. So we continue to work on these novel water treatment technologies to provide more options for future reclamation.
Switching gears to tailings treatment for a second, we have a process that we have recently developed that's called centrifuged tails. The process consists of three basic steps. Initially we flocculate the tailings materials, which is essentially water with suspended clay particles. The flocculant is a polymer that is similar to that used in municipal water treatment. This is in turn then spun in centrifuges to produce what is known as a cake. It's a higher-solids content material. Then the cake is placed in pits for subsequent further dewatering and dessication, to the point that we can then undertake reclamation activities on top of that.
On the bottom right you can see one of our test locations where we're driving a vehicle on top of what was once tailings material. We have moved through technology development phases on this, and currently we have under design and construction a full-scale centrifuging plant about the order of $1.8 billion that will be operational around 2015. This centrifugation tailings technology development is important to us. It enables us to comply with the ERCP Directive 074.
I'll move to what we call the Sandhill fen project. This is an example of the development of a man-made groundwater-fed wetland. On the upper right there's an image of a naturally occurring fen in our region. What we are doing is replicating that in our tailings environment. The Sandhill fen technology, as we call it, will essentially enable soft tailings closure and reclamation. We'll have water table control through the placement of the hummocks, and you can see a little bit of that in the lower right where we've actually constructed this Sandhill fen. It's a 17-hectare pilot where we have the rises and falls in the landscape to enable these groundwater-fed wetlands to thrive.
An important part of this is the ability to transplant and place peat so that it will grow effectively, as well as other vegetation. On the lower left, there are some examples of test cells that preceded the significant pilot in order to understand how we could effectively do that with the peat and the vegetation.
So we are progressing this such that we can have the types of groundwater-fed wetlands in our landscape that were there before mining activities.
The information on our current reclamation status dates from year end 2011, given that the 2012 data is currently still being reconciled. The total land disturbed in our operations is just under 26,000 hectares. Soils have been placed and are available for revegetation on 1,200 hectares. Our permanent land reclamation is approximately 3,200 hectares. And land that's certified and returned to the Province of Alberta totals 104 hectares, which is the only certification in the oil sands region. We do have an upcoming area for recertification called South Bison Hills of approximately 1,000 hectares, and you can see an image of the South Bison Hills here on this page.
That's the material I intended to cover. Thank you for your attention. l will also take any questions at the appropriate time.
Thank you.
