Retread Resources Ltd.
Overview of the Firebag Coal Project, Fort MacMurray, Alberta
Retread Resources > Publications > Firebag Project| by J. Nikols, P. Geo., Georgia L. Hoffman, P. Geol. and Robert A. Wilson, P. Eng. Retread Resources Ltd. |
IntroductionThe Firebag Project Area consists of 277 square kilometers (107 square miles) of contiguous coal lease applications that cover the known deposits of lignite coal and oilsands. Located to the northeast of Fort McMurray in northeastern Alberta. (See location map)Exploration projects conducted during the mid-1970's documented the existence of both coal and oilsand deposits in the Firebag lease application area. Order of magnitude estimates are upwards of 800 million tonnes of coal and over 3 billion tonnes of oilsands. |
The Firebag deposits were not considered to be of major economic
interest when they were explored during the 1970's, however
major economic changes that are occurring today are driving
a renewal of interest. The most significant factors are:
The coal resources at Firebag are a suitable fuel for mine-mouth power electrical power generation and/or gasification. The Firebag Coal appears to be suitable for Integrated Combined Cycle Gasification (IGCC). There is also a market for waste heat and carbon dioxide (CO2) that would be generated as by-products. This would result in greenhouse gas emission credits, an important consideration in the post-Kyoto Agreement era of today. The oilsand resources which overlay the coal deposit, are extensive, and are covered in our companion study, The Northern Lights Oilsands Project. The release of oilsands that would occur if only the coal is mined is insufficient to sustain the kind of large scale operations that exist in the Fort McMurray area. The oilsands in the Project Area would be sufficient to warrant a more modest bitumen recovery operation. |
Location and ResourcesThe Firebag Project Area is located about 60 km (38 miles) northeast of Fort McMurray, Alberta; an area which is famous for its large open-pit oilsand mines. The Syncrude and Suncor operations are currently undergoing expansions which are scheduled for completion by the year 2001. Other corporations such as Shell, Mobil, and Husky have announced oilsand projects that will be completed early in the next century. At present, however, there are no coal mines in the area, and the Firebag Project applications cover the only known coal deposits in the region.Geologically, the Firebag coal and oilsand deposits are part of the McMurray Formation. The coal occurs primarily in lower part of the formation, in areas where depressions had developed on the underlying Devonian strata. Coal sequences reach a thickness of up to 35 metres (115 feet) in the deepest parts of the depressions, but may be absent or thin in areas between depressions. At its base, the coal sequence consists primarily of carbonaceous shales, which give way to true coals in the upper part. The coal is of Lignite A rank. The available data indicate that the average heat content of the raw coal is about 9600 BTU/lb, the average ash content is about 26%, and the average sulfur content is about 3%. The coal is usually overlain by bitumen-saturated oilsand, which ranges in thickness from a few metres to as much as 47.5 metres (156 feet). In some areas the coal and oilsand grade laterally and vertically into each other. No analytical data are available for the Firebag oilsand at present, but it should be similar to the oilsands that are currently being mined at other operations in the Fort McMurray area. Based on data from the exploration projects that were conducted during the 1970's, a resource estimate was prepared for an area designated Area #1, which includes the thickest known coal beds and the highest data density. In Area #1, coal stripping ratios appear to be attractive for open-pit mining, if however, both coal and oilsand are recovered, the ratios improve. Mining costs would be competitive with those at other open-pit coal and oilsand mines that are currently operating in Alberta. The resource estimate for Area #1 was based on a series of geological cross-sections. Conceptual pit limits were applied to each section, assuming reasonable pit-wall angles, under average conditions. Areas of coal, oilsand, and waste within the pit limits were then measured by planimeter. The resulting estimates for coal and oilsand in Area #1 are 328 million and 925 million gross in-place tonnes, respectively, with no allowances for mining or processing losses. These resources have been assigned to the category of Indicated Resources of Immediate Interest. Less information is available for the remainder of the Firebag Project area. Gross in-place resources for the rest of the property, exclusive of Area #1, are estimated at between 500 and 800 million tonnes of coal and and considerable oilsand. They have been assigned to the category of Inferred Resources of Immediate Interest. |
The Alberta Electrical Energy MarketCoal mined from the Firebag deposits are suitable for use in electrical power generation, and electrical energy would be the primary product of the Firebag Project. Markets for by-products, such as heat (in the form of steam and/or hot water), low-value operational fuel (in the form of coal-water slurry or syngas), bitumen recovered from the oilsand, and carbon dioxide, are discussed in Section 3.Restructuring and deregulation of the electrical energy industry in Alberta will result in open access to the Alberta electric energy market by January 1, 2001. There will be excellent opportunities in this expanding market. To provide open access to the electrical energy market, the Electrical Utilities Act of 1995, and the Electric Utilities Amendment of 1998, created a Power Pool, which will be managed by a Power Pool Council (PPC). The PPC will be an independent body comprised of individuals who do not participate in, or benefit from, the energy markets. Access to the Power Pool will be available to all suppliers and consumers that meet basic qualifications. Suppliers will include all generators and marketers of generation, as well as any importers of energy from outside Alberta. By the year 2001, consumers will include all end-use customers or their agents. New oilsand developments, over the next few years, will provide a significant proportion of load growth. Both Syncrude and Suncor have large expansion plans, which are expected to be completed by 2001. Other corporations such as Shell, Mobil and Husky have also announced oilsand development projects scheduled for completion early in the next century. These projects are all based on long-term oil price projections, and will not be significantly influenced by short-term oil price volatility. These projects will represent about $20.6 billion in investment, and each will require about 5080 mega watts of electricity. Strong growth is also expected in the oil and gas industry, the pipeline industry, and the forestry industry. The present electrical load growth is leading to a situation that will seriously challenge Alberta's supply capabilities. Deregulation has relieved the Alberta Electrical and Utilities Board (EUB) and the traditional utilities of any obligation to provide an adequate supply. The Power Pool market price is intended to provide price signals that will encourage new generation as it is required. However, full deregulation has not yet come into effect, and price increases have not been initiated. As a result, the traditional utilities are planning to construct no new generating facilities until deregulation has been completely sorted out, and brown-outs (voltage drops that can last several days) are likely to occur. This situation will provide an excellent opportunity for the Firebag Project to enter the Alberta electrical energy market. |
Markets for By-ProductsBy-Product Heat and Low-Value FuelLarge quantities of steam and hot water are required during oilsand processing. Large quantities of steam are also required for the less conventional approaches to bitumen recovery, being planned and investigated in the region. The Clark Hot Water process, developed by the late Dr. Karl Clark of the Alberta Research Council, forms the basis of bitumen recovery for current and planned projects. Oilsand is delivered from the mines to the processing plant. The ore is conditioned with hot water or steam and caustic soda. This slurry is further treated to separate the bitumen from the sand. The bitumen is then up upgraded by a coking process that cracks the bitumen molecules into lighter components. These processing plants are very large, for example, Suncore's daily production should reach 105 thousand bbl/d by 1999. In addition to large volumes of input oilsand and output petroleum, the mine and plant operations devour large quantities of heat and electrical energy. Some oilsand resources are too deeply buried for conventional mining. The industry has developed a Steam Assisted Gravity Drainage (SAGD) recovery method, to access these resources. Steam is injected into the oilsand formation and bitumen is pumped to surface. These steam injection sites will require fuel. Coal, coal/water emulsion or syngas are all potential fuels and sale products from the Firebag Project. |
| Bitumen More oil is trapped in Canadian oilsands than Saudi Arabia holds in its reserves. Cost effective technology exists to exploit this vast resource. The petroleum industry has announced investments of over $20 billion CDN in new project developments, over the next ten years. Clearly Alberta's oilsands have come of age. This level of investment, the nature of mining activities and the long term demand for petroleum combine to create an industry which can be conceptualized as a utility. In the Firebag Project area, the oilsands that overlie the coal will be mined and the bitumen recovered. The bitumen resources in Area#1 are not considered large when compared to existing oilsand projects; however, a ready market for this product exists in the Fort McMurray Region. The Firebag Project is not expecting to treat the bitumen beyond the recovery stage, substantially reducing the capital cost requirements. The sale of the bitumen is expected to pay for most of the mining costs. Please see our companion study The Northern LIghts Oilsands Project (NLP). |
| Carbon Dioxide Carbon dioxide, a natural product of combustion, can be transformed from a liability into an economically disposable substance or a saleable product. Carbon dioxide is generally acknowledged as the most difficult emission to control. About 3.67 tonnes of CO2 are produced per tonne of coal burned, constituting about 13% of the total mass of flue gas emitted. While CO2 is a valuable commodity, it is too diluted in the flue gas to utilize directly. Pure CO2 is currently worth about $0.85 US per mmcf, which represents a target upgrading cost for flue gas and the potential for tradable emission credits. The Firebag Project is well suited to dispose of its CO2 as it is in proximity to large scale SAGD potential. Carbon dioxide enhanced steam will improve the drainage efficiency of a SAGD operation through a process known as Miscible Flood. The exhausted portions of the oilfield also represent an opportunity for underground storage of surplus flue gas. Storage of surplus CO2 in underground karst caverns is a possibility that should be explored during the detailed resource assessment phase of the Firebag Project. This form of storage would represent a back-up disposal method if access to markets should prove insufficient, or if a temporary diversion of flue gas is necessary for operational reasons. |
Environmental ConsiderationsLocal ConsiderationsThe Project Area is covered by a semi-open black sprucetamarack bog forest. The principal tree species are Black Spruce and White Spruce, and the secondary species are White Birch and Aspen. The forest understory is sparsely distributed and primarily comprised of Willow, Swamp Birch and variants of Bog Willow. Other low growing shrubs may include Labrador Tea which can comprise up to 75% of the ground cover, Bitter Cress with up to 5% of ground cover, and Fireweed. The surrounding non-forested areas in the Firebag River watershed are characterized as broad-leafed sedge fern and open muskeg. Wildlife in the region are typical of the lower productivity areas of the boreal forest of western Canada. The largest ungulates in the vicinity are moose and caribou. The Firebag is on the southern edge of a caribou calving area, however within the Project Area no environmental constraints are known. Waterfowl are distributed in the area, however major flyways are west of the Athabasca River and further east in Saskatchewan. Trapping remains an important economic activity in the Firebag River watershed. Muskrat, beaver and squirrel are of primary interest and their numbers are regulated by available habitat. The Project Area is not known to include much, if any suitable habitat for these animals. |
| Global Considerations Alberta makes a significant contribution to Canadian greenhouse gas emissions due to the large oil and gas industry and heavy reliance on coal-fired electrical generation. The federal government, through the Kyoto Agreement, has made a commitment to reduce emissions to 6% below 1990 levels by 20082012. Many industries therefore find it prudent to be involved with projects that have favorable greenhouse gas emission impacts, including many of the present and prospective oilsand operators in the Fort McMurray area. The Fort McMurray area provides a number of opportunities to create emission benefits from a coal-fired generating plant. For example, generating facilities, such as the proposed Firebag Project power plant, will provide line loss reductions that would not necessarily be achievable from plants located elsewhere in Alberta. If the Firebag Project power plant were to utilize the surplus heat that would be produced in a co-generation mode significant benefits would result. A project developed in the co-generation mode would not only provide the benefits available from higher efficiencies, but would also provide significant emission reductions, compared to separate electrical and steam generation projects. These benefits would help to meet the emission objectives of potential customers in the area, and would provide environmental justification for a coal-fired project. |
Conclusions
Anglo Minerals Ltd. 603, 706 7 Avenue SW, Calgary, Alberta T2P 0Z1 (403) 237-6599 or send us an email and we will pass your request along to the nice people at Anglo Minerals Ltd. Have specific questions about the science, engineering, geology or mining conditions in the project area? Contact Dennis or Georgia |