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Canada's Mines Branch and its synthetic fuels programme for energy independence.

Canada's Mines Branch and Its Synthetic Fuels Programme for Energy Independence

In the mid-1970s many industrialized nations started major synthetic fuel programmes aimed at increasing their domestic petroleum production. The reason for their concern was the 1973-1974 Arab oil embargo that resulted in a jump in petroleum prices from about $2 to $10 dollars a barrel. The Iranian hostage crisis of 1979-1981 produced another tripling of prices, and a skyrocketing petroleum demand world-wide that soon reached the $40-range. But this was not the first time industrialized nations had tried to lessen or even eliminate their dependence on imported petroleum and move toward energy independence. By the 1920s the introduction of the airplane, the mass production of automobiles, and the conversion of ships from coal to oil-burning showed clearly petroleum was the fuel of the future. This was shown in the construction, during the late 1920s -- early 1930s, of the first coal liquefaction plants in petroleum-poor Germany and Great Britain.

A similar concern emerged in the US after World War II. Despite its large petroleum supplies, the war showed how quickly the United States could consume huge quantities of liquid fuel and led the Bureau of Mines to sponsor a coal-to-oil demonstration programme that ran from 1949 to 1953.

In Canada, Mines Branch officials had worried about Canada's lack of significant petroleum deposits from the early 1900s. They too believed synthetic liquid fuel production might eliminate possible energy shortages. Initially, the Mines Branch, at its fuels division laboratory in Ottawa, concentrated on high-pressure coal liquefaction, but by the 1940s the emphasis had shifted to hydrogenating the bitumen extracted from Alberta's vast tar sands to give a high quality oil.

The Mines Branch assumed a leadership role in Canadian synthetic liquid fuel research. The government actively supported the research, and in this respect the Mines Branch programme resembled those in Germany, Britain, Japan, and the United States, but never progressed beyond the pilot plant. The failure was not technological but because the Mines Branch's commitment was to basic research on Canada's low grade reserves. Even today the unfavourable economics of synthetic fuel production and natural petroleum abundance have prevented any significant commercial development.

The Mines Branch Programme The Mine Branch's synthetic liquid fuel programme falls into three main divisions: 1-1907--29; the beginning which included Eugene Haanel's appointment as Mines Branch superintendent and his emphasis on fuel research, 2-1930--45; the Depression and World War II years, characterized by T.E. Warren's initiation of high-pressure hydrogenation research on coal and bitumen from tar sands, and 3-1945--present; the Mines Branch concentrated on hydrogenating bitumen because of its potential to provide an abundant source of liquid fuels for the future. This three-stage evolution shows clearly the Mines Branch's commitment to developing Canada's low grade reserves to ensure her energy self-sufficiency and political independence.

Early concern for fuel supply The Geology and Mines Act of April 27, 1907 officially established the Department of Mines with its two divisions, the Mines Branch and the Geological Survey, under the Minister of Mines' control and management. The Geological Survey had existed since 1842, becoming a branch of the Interior Department in 1877, while an organization with functions and duties similar to the Mines Branch had been part of the Interior Department since 1901. Eugene Haanel had served as superintendent of mines in the Department of Interior with headquarters in Ottawa since June 5, 1901, and he continued as superintendent after the establishment of the 21-member Mines Branch in 1907. Haanel, a German-born mineralogist, had been professor of science at Victoria University in Cobourg, Ont., for 15 years, and had spent the last 12 at Syracuse University before returning to direct the future Mines Branch. During his 19 years as superintendent, fuels received priority, at first solid fuels, particularly the vast peat bogs of Quebec and Ontario to meet large energy requirements, and by 1910 Canada's oil reserves.

There was at that time a world emphasis on peat as a solid fuel. Investigations on its combustibility resulted in Eric Nystrom of the Mines Branch visiting plants in the US and Europe where in 1907 he made a complete survey of the peat industry in Sweden, Norway, Finland, Germany, Holland, and Ireland. That same year, Haanel's son, Benjamin Franklin Haanel, inspected peat burning gas producers and gas engines in several New York City factories and the University of Illinois' fuel testing laboratory. In 1908 he studied gas producers in Berlin and at the Hanover firm of the Korting Brothers. Korting supplied the first peat burning gas producer and gas engine installed at the Mines Branch's fuel testing station in Ottawa upon its completion in 1910. At this time, the Dominion government also purchased a 300-acre peat bog at Alfred, Ont., and after draining the bog, the Mines Branch put up buildings and shops and installed peat machinery. The Mines Branch conducted tests in 1912--1913 and planned to begin commercial-scale development but the outbreak of World War I in August 1914 ended the programme. From these investigations, Haanel intended to show the feasibility of using dried peat as an energy source for motors providing the plant was large enough and that peat costs were kept at $2.00/ton or about one-half the cost of bituminous coal. Haanel hoped to reduce the nearly $21-million spent on imported coke and coal. The increased demand for liquid fuels during wartime made even more obvious Canada's lack of liquid fuels, and in 1919 the Mines Branch began investigations on Canada's most important oil shale deposits located in Albert and Westmoreland counties of New Brunswick. The shale deposits were generally quite lean, about 40 Imperial gallons/ton (48 US gallons/ton), and because of high mining costs the Mines Branch did not consider them a particularly promising source of liquid fuel.

In 1907, there was only a small Canadian oil and natural gas industry. Its base was still largely in western Ontario where the first oil production had begun in Oil Springs in 1857, near Sarnia, two years before the more famous 1859 strike at Titusville, PA. Canadian production peaked in 1900 at 913,498 barrels, mostly from Ontario, but started to fall with 243,614 barrels in 1907. Canada's liquid fuel production was almost nonexistent before the mass production of automobiles and the conversion of ships from coal burning to oil. For comparison, in 1912 the US produced 220 million barrels, world production was 351 million barrels. On the other hand, Canadian natural gas production increased yearly for several decades, not falling until the depression of the 1930s. In 1907 it reached 15.2 billion cubic feet, all of it coming from only three provinces: Ontario 12.5 billion, Alberta 2.5 billion, and New Brunswick 0.2 billion cubic feet.

Charles Camsell, deputy minister of Mines and chairman of the Dominion Fuel Board, also was very conscious of the fuel shortages experienced during World War I and the 1920s because of Canadian petroleum resources. In 1927 Camsell made an extensive tour of British and German fuel processing centres. It included visits to 12 low-temperature carbonization plants, a small Bergius coal liquefaction unit at the British Fuel Research Station in Greenwich, Franz Fischer's coal gasification center at the Kaiser Wilhelm Institute for Coal Research at Mulheim in the Ruhr, and I.G. Farben's (BASF) newly operating large-scale coal liquefaction plant in Leuna, near Merseburg. The coal conversion operations were particularly interesting to Camsell as they offered a way of transforming Canada's abundant but low quality coals into much more valued liquid fuel.

The following year Camsell and B.F. Haanel, who was now chief engineer, Division of Fuels and Fuel Testing, were in London to attend the 1928 World Power Conference where Haanel presented a lengthy paper on Canada's fuel problems and coal conversion techniques. Haanel pointed out that like some European nations Canada possessed large quantities of coal and little petroleum. But more than 90% were lower grade sub-bituminous and lignite, located in Canada's eastern and western regions 1,000-2,000 miles from the most populous and industrialized centers of Ontario and Quebec. The American coalfields were much closer, 400-500 miles, and for that reason Canada obtained the major portion of her solid fuels there. In fact, 50% of the 35 million short tons consumed annually were imported.

For liquid fuels Haanel noted Canada was almost totally dependent (98%) on imports from the US and other countries, with increasingly steady requirements. In 1927 Canada produced 16.78-million Imp. gal of crude petroleum and imported 804 million. She ranked second per capita to the US in the number of motor vehicles and internal combustion engines in use. One answer to distantly located coal resources and little petroleum, Haanel said, was to develop economic processes for converting solid fuels into liquids or gases and transporting them economically through pipelines. Because carbonization or other heat treatments of coal, shale, and tar sands produced only small quantities of liquid fuels, about 30--40 Imp. gal/ton maximum, Haanel did not think they could relieve Canada's dependence on foreign supplies. Only gasification or the more advanced Bergius liquefaction process produced sufficient liquid fuels from coal. But given the ample availability and low cost of petroleum, neither process had any chance of succeeding commercially then. If the petroleum situation were to change, and Haanel believed it would, Canada should be ready to develop a synthetic fuels industry.

High-pressure hydrogenation of coal and tar sands seemed to provide a solution. The decision reached in 1928 was that the Mines Branch, despite the high cost of coal-to-oil conversion processes, must not delay the start of synthetic liquid fuels research.

Synthetic fuels at the Mines Branch The following year the Mines Branch hired T.E. Warren who had a PhD in science from MIT after three years in Robert T. Haslam's laboratory of applied chemistry. His arrival after an apprenticeship with one of the experts in high-pressure investigations was the beginning of the Mines Branch's high-pressure hydrogenation programme.

During the Depression and WWII years, the Mines Branch made important advances in the study of reaction conditions and catalysts. In 1932 it converted its batch operation to a continuous unit and in 1943 replaced its low-yielding one-stage reactor with a much higher oil yielding two-stage unit. Both were absolutely essential before proceeding to the industrial hydrogenation of coal and bitumen. Despite restrictions on funding for most of the 1930s, the Mines Branch continued its synthetic fuel research, studying the latest German investigations on coal hydrogenation as well as hydrogenating Canadian coals and bitumen. But the war forced a temporary shutdown of the hydrogenation programme from 1940 to 1943.

Coal hydrogenation remained confined to the Mines Branch's laboratory in the 1930s-1940s mainly because petroleum production from Turner Valley, Alta., and American imports were sufficient to meet Canadian demands. A similar situation existed in the US where the Bureau of Mines conducted research on coal hydrogenation in its Pittsburgh laboratory. In Europe and Japan, research and development had reached the commercial stage, especially in those countries that had large deposits of coal but little petroleum. In Germany, I.G. Farben and other industrial firms already were operating several large coal and tar high-pressure hydrogenation plants that would grow to 12 and produce 128-million barrels of petroleum before WWII ended. In Britain, coal hydrogenation was not as extensively developed, but its one plant, Imperial Chemical Industries' (ICI) plant at Billingham, produced 150,000 tons (ca. 1,000,000 barrels) of synthetic petroleum a year. The Italian government through its state-supported ANIC operated two crude petroleum hydrogenation plants in Bari and Livorno (Leghorn), while the Japanese planned an extensive network of 87 synthetic fuel plants. By 1942, however, Canada's liquid fuel situation began to change. With production declining at the Turner Valley field, the government looked once again at the huge tar sand deposits in northern Alberta as an alternative source of petroleum. At that time the Mines Branch resumed its synthetic fuel research.

In order to avoid duplication of hydrogenation research the Mines Branch and the US Bureau of Mines decided the Mines Branch would investigate those areas where it had considerable expertise and were not included in the Bureau's larger programme (specifically the hydrogenation of bitumen from tar sands). At the same time the two agencies agreed the Mines Branch would conduct its experiments at very high pressures of about 20,000 psi (1360 atm). The Bureau of Mines operated a semi-commercial, 200-400 barrel/day, synthetic petroleum plant from 1949 to 1953 before dismantling because of high production costs. But the Mines Branch did not complete it 20,000 psi pilot plant until 1955, although before 1955 the hydrogenation of coal and bitumen continued at lower pressures. Because Canada had suffered from fuel shortages during WWII the Mines Branch believed the tar sands were the best insurance against future shortages. This was reflected in the optimistic Blair Report of 1950 and at the Athabasca Conference of 1951. Both considered the feasibility of developing the tar sands as a major source of liquid fuel.

Through to the 1960s the Mines Branch maintained its policy of long-term tar sands development. Canada had become well-endowed with solid, liquid, and gaseous fossil fuels beginning with the discovery of oil and natural gas at Leduc, Alta., in February 1947. But during the 1960s-1970s Canada also considerably increased petroleum consumption as its pattern of energy consumption had changed from dependence on coal to dependence on natural gas and petroleum. This was the reason Suncor in the mid-1960s and Syncrude Canada, a consortium of government and business interests, in 1978 constructed mining and bitumen extracting plants at the tar sand sites in Alberta. Other efforts by industry to develop the tar sands at this time fell victim to the 1981-1982 recession and the subsequent collapse of oil prices. A 1984 forecast of a 35%-decrease in Alberta's oil reserves has led to a recent revival of interest.

Despite these booms and busts, the Mines Branch, today called the Energy Research Laboratories (ERL) of the Department of Energy, Mines, and Resources (EMR) has continued its long-term development policy. Recently it introduced a unique hydrogenating process called CANMET. Whereas all earlier commercial upgrading plants, such as Suncor and Syncrude, separate bitumen from the tar sands with mining technology and upgrade the bitumen by coking, CANMET upgrades by hydrocracking. It operates at moderate pressure, lower than most commercial hydrocracking processes, and features the introduction of an inexpensive coal/iron additive fed continuously to the incoming stock. The additive prevents coke from depositing in the reactor, permits a low-pressure operation, and gives a high conversion rate of bitumen and crude oil to lower-boiling fractions. Unlike previous catalytic heavy-oil upgrading processes, the additive is not spent in the presence of sulfur and heavy metals found in the oil. EMR researchers in Ottawa have hydrogenated Athabasca bitumen, Lloydminster heavy crude, and Cold Lake bitumen, in two, one barrel/day CANMET pilot plants. All these substances had high pitch concentrations, and in each case the CANMET process converted about 90% of the pitch into lower boiling fractions. Ordinary thermal hydrocracking gave a 50% maximum conversion.

Recently ERL expanded its CANMET process. In July 1985, it completed at Petro-Canada's Montreal refinery a 5,000 barrel/day demonstration plant, which so far has provided sufficient data for possible commercialization. The projected cost of a 100,000 barrel/day plant, with a CANMET hydrocracking unit operating at 93% conversion, is $1.049-billion. The resulting high quality synthetic crude will cost $12.57 a barrel.

ERL's demonstration plant with its CANMET hydrocracking unit represents a major advance in the refining of low-grade oil reserves, such as the 100 billion barrels of heavy oil in California, the estimated three trillion barrels in Venezuela, and Canada's possible trillion barrels. CANMET may be Canada's most significant contribution to the science and technology of petroleum refining.

Conclusion In their search to discover why some succeed and others fail, science and technology historians have asked whether the innovation's intrinsic quality or social-economic factors determine its success or failure. For high-pressure hydrogenation both factors are important. In Germany, the process was a technological success six years before the Nazi government rose to power in 1933 and proceeded to subsidize large-scale development. Commercialization may not have occurred otherwise. ICI's technologically successful process received similar economic incentives in Britain. The US Bureau of Mines succeeded technologically, but because of unfavourable economics and the abundance of cheap petroleum, hydrogenation never achieved commercialization. The Japanese government provided every possible economic and social incentive, but technologically, high-pressure hydrogenation was a total failure. In Canada the Mines Branch's plan of long-term development of its low-grade bitumen and crude oil reserves has met with considerable technological success, but up to the present time, unfavourable economics have resulted in a cautious and limited approach to commercialization. The CANMET process of converting low-grade solid to high-quality synthetic liquid fuel may satisfy the two criteria that determine the success or failure of scientific or technological innovation.

Most recently, in May 1988, the Solv-Ex Co. of Albuquerque, NM, has claimed the residual sands or tailings are far richer in metals and metallic compounds than suspected. Solv-Ex, which has a patented process for separating the bitumen from the tar sands, had worked with Shell of Canada in 1986 on a tar sands project. Its preliminary analysis of the separated sand showed significant amounts of gold, silver, and titanium dioxide, a valuable pigment used in paints, whose combined value, Solv-Ex says, would pay for the extraction costs. Bitumen recovery in effect could be "free and clear of all mining costs." The world market price of oil will not matter, Solv-Ex claims, because after Saudi Arabia it will be the lowest cost producer.

PHOTO : The Mines Branch, the forerunner of the federal department of Energy, Mines and Resources,

PHOTO : did its first testing work on peat bogs such as this in 1912.
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Author:Stranges, A.N.
Publication:Canadian Chemical News
Date:May 1, 1989
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