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Don’t hold your breath for Shell

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The Lakeside Leader: Don’t hold your breath for Shell

Joe McWilliams
Lakeside Leader

Three weeks ago, Lesser Slave Lake MLA Pearl Calahasen raised a lot of eyebrows at a Slave Lake Chamber of Commerce meeting. She said that the oil company Shell was planning to invest $20 billion in a heavy oil project north of Wabasca. Not only that, but they expected a community of anywhere from 4,000 to 15,000 people to spring up in the bush.

Following up, The Leader found the company much more cautious in its pronouncements. Shell spokesman Kurt Kadatz said it would be likely the middle of the next decade before the company even makes a decision on investment on a commercial scale. Until then, he said, there’s no point in talking figures.

The same goes for the size of the community that might result from a large-scale oil project in the Chipewyan Lake area. Whatever size it might be, Kadatz said, depends on a decision that won’t be made for several years.

What’s more to the point, evidently, is what Shell is up to that would result in a decision to mount a commercial extraction project. Or rule it out, for that matter. Kadatz was willing to talk about that.

This past winter, Shell drilled 12 new wells and did about 37 square kilometres-worth of seismic work – all in a continuing effort to better understand the size and nature of the oil resource. The company has also applied to conduct a pilot project that would test a new method of loosening up oil locked in a more or less solid form.

The pilot project is called the North Field Test.

“It will use an in situ upgrading process,” Kadatz says. “It will use electric heaters.”

Shell has tested the heaters in another pilot project near Peace River since 2004. It’s similar, but the geologic circumstances are not the same as in the Grosmont formation, which is the one in the Chip Lake area. It’s a huge deposit of bitumen carbonate, (over 300 billion barrels, according to one source) which is not in liquid form. How much of it is recoverable is the billion-dollar question – or perhaps the 20 billion-dollar question.

Shell figures its Alberta heavy oil reserves at 20 billion barrels, of which its Grosmont property is only a portion. Shell’s in situ process not only heats the oil to make it flow, but actually upgrades it into lighter crude and gas, according to an article at, – something that would typically be done above ground.

Shell hopes to begin construction on its pilot project infrastructure in 2009. There won’t be much going on this summer, Kadatz says, except in the way of improvements on the Al-Pac road between Wabasca and Chip Lake. Gravel for that project was hauled and stockpiled during the winter. The company hired local haulers and is pleased with how it went.

“They drove well over a million kilometres without any kind of incident,” Kadatz says.
Speaking of employing locally, Kadatz said Shell wants to do it as much as possible.

“We’re building a database right now and recording their (companies) capabilities,” he says.

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