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Utah at a crossroads

Utah sign

Anyone who has peeled an orange knows that burning sensation when oil from the fruit’s rind inadvertently sprays the eyes. The main ingredient in that oil, which can be found in all citrus products, is a non-toxic and biodegradable compound called d-Limonene.

A green chemical, d-Limonene is extracted during the making of fruit juices and used in a variety of household products – from floor and toilet cleaners to soaps and shampoos.

One wouldn’t expect this relatively benign substance to be at the centre of a controversy, but that’s exactly the case in Utah, where there are plans to use d-Limonene to extract oil from the state’s bitumen-soaked sands.

“We think we can develop the most environmentally responsible oil sands projects and one of the most responsible oil projects ever,” says Cameron Todd, chief executive officer of Calgary-based U.S. Oil Sands.

Some environmental groups aren’t convinced.

U.S. Oil Sands owns a 32,000-acre land position in Utah’s Uinta Basin, the largest in the United States acquired for oil sands development purposes. Exploration of one quarter of that land shows potential to produce 184 million barrels of oil through strip mining.

Todd says U.S. Oil Sands can do it economically and with low environmental impact, using d-Limonene as part of a proprietary process to pull the oil from sand and other fine sediments. “We gently agitate the solvent into the oil sands and water,” he explains. “It’s like using a mild laundry detergent to get oil stains off of clothing. The results are quite astounding.”

He says 96 per cent of the oil is recovered, leaving behind clean sand that can be returned to the mine. The process creates no sludge so eliminates the need for tailing ponds, and it uses less than half as much water as a conventional oil sands project. Of the water that is used, roughly 95 per cent is recycled (the 5 per cent lost is sourced from deep-drilled wells).

Energy use and, by association, greenhouse gas emissions are also substantially lower. “You cut the heat requirements in half because the water, when you recycle it, is still hot,” says Todd. As for the d-Limonene solvent,

98 per cent of it is recycled and fed back into the company’s patented process.

The economics are also compelling, assures Todd. Conventional oil sands production costs are $110,000 per barrel per day for projects producing a minimum of 100,000 barrels daily, he says. By comparison, U.S. Oil Sands believes it can produce a barrel each day for $25,000, even if a project is comparatively small – for example, as little as 2,000 barrels daily, which will be the size of the company’s first project.

By reducing production costs by up to 75 per cent – what Todd calls a “game changer” – it opens up a market for smaller oil sands projects previously too uneconomic to consider.

Blessing or Burden?

But even if the company’s process works as described, is the outcome likely to be as good as claimed?

Two environmental groups, Living Rivers and Western Resource Advocates, are standing firmly against U.S. Oil Sands’ PR Spring project. They argue the project has the potential to contaminate groundwater and that the state regulator, which permitted the project in 2010, hasn’t done its homework.

Utah officials, in turn, say the area is a desert with virtually no groundwater to contaminate, so the risk of contamination is next to nil.

But a recent study led by researchers at the University of Utah disputes that conclusion. Recent hydrochemical samplings, they point out, reveal the existence of a hydrological system that links the area to perennial springs at lower-lying Main Canyon, on which many families and businesses rely.

While holes drilled around the proposed project site may look dry, the bigger question is what happens when there is rain and snowmelt? Where does the water go and what can it potentially take with it? These are questions now being considered by Utah’s Supreme Court.

William Johnson, one of the study’s authors, said in public testimony that it’s not the d-Limonene on its own creating the concern. It’s the fact that the solvent – any solvent, regardless of how benign it may be – will free up carcinogenic compounds in the oil sands and make them more easily transported through groundwater flow.

It’s a point Todd disputes.

But the overarching ethical question remains: In a climate-constrained world that’s rapidly using up its carbon budget, is opening up oil sands development to a much greater number of smaller projects a responsible direction to go?

The “cleaner” approach being pursued by U.S. Oil Sands may well displace much dirtier forms of oil production. In the end, however, it will be the climate – not just orange peels – that gets squeezed.

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