The Energy Returns of Unconventional Oil

00:00:04:04 - 00:00:26:12

Chris Keefer

Welcome back to Decouple. Today I'm joined by returning guest Chris Popoff. Chris, you were popping off. The other day we were talking about extreme weather events in Alberta. I'm sure that's not the first time you've heard someone riff on your last name like that. It will not be the last great episode. Got some awesome feedback. Had a journalist in Alberta commented Say, who the hell was that guy?

00:00:26:12 - 00:00:50:11

Chris Keefer

And I liked what he was saying about narcissistic energy. Relation to wind and solar. So you touched it touched a nerve there. You know, Denberg, he often talks about being provocative without being polarizing, rising. And I don't know if that was on the edge or not, but I do appreciate, you know, creative language, creative writing skills. And I think I think you justified the use of that language pretty well.

00:00:50:13 - 00:01:10:05

Chris Keefer

Anyway, Chris, you're you're rapidly gaining a reputation here on decouple. People want you back. I want you back. And we left a little seat at the last of the last episode that we were going to start talking a little bit about the oil and gas side of things, Alberta, unconventional oil, etc. There's been a lot humming in the space.

00:01:10:07 - 00:01:32:05

Chris Keefer

My inbox just this morning had a piece from Duesberg. I think he's debating Adam Rosensweig on this idea of cheap peak oil. There's a lot out there in regards to, obviously, fracking, natural gas liquids. What is oil? We'll have Art Berman on soon to dive into a little bit of that. So definitely want to touch on some of those themes.

00:01:32:05 - 00:01:45:11

Chris Keefer

But again, our previous conversations on and off air about Alberta about it's unconventional oil are really fascinating to me. So warm. Welcome back to decouple and looking forward to diving in, my friend.

00:01:45:12 - 00:02:16:15

Chris Popoff

Thanks for having me back, Chris. I received quite a few messages myself on our last episode, so it was great to have have a polarizing reaction in the audience and there was some hate mail and there was some fan mail in equal measures, and I like that. I think it's good to stimulate discussion in this space. My goal is is pretty straightforward around just wanting to increase the dialog and the awareness around energy.

00:02:16:17 - 00:02:46:09

Chris Popoff

And I think we refer to that as energy literacy. So as we get closer to that ends, then then we've been successful. And I appreciate your generosity and having me on your you're wonderful platform to do that. Yeah, you did share that article. Berman's thoughts on On Doomed Birds Take on Cheap Oil. And it is very much applicable to what we do here in Alberta and and with the oil sands.

00:02:46:09 - 00:03:01:10

Chris Popoff

So happy to follow a meandering walk through that that land with you that today. Let's let's just take your questions. I have no no set agenda or lectures built for this but happy to answer whatever you have.

00:03:01:12 - 00:03:21:00

Chris Keefer

Awesome. Awesome. And yeah, just a riff off of off of this intro, this concept of a battle of ideas I really like. And it's not to say that we should be combative or that that, that that's the goal. But I mean, it's really important. I think we live in a very we live in a in terms of the communication landscape, it's hard to sort of label it as just one thing.

00:03:21:00 - 00:03:39:06

Chris Keefer

But in terms of the energy debate, I do see a lot of conflict avoidance, which is often cloaked in language. It's kind of all of the above ism. And while, you know, we seen a lot of clean energy, so let's not even assess the merits and flaws and qualities of everything we're talking about. Let's just try and all get along nicely.

00:03:39:08 - 00:04:02:17

Chris Keefer

And it's a nice impulse, I think, to get along with people. But, you know, I think what nuclear has taught me, again, coming out of a pretty sort of cloistered, perhaps identity left scene where, you know, if you posted an article from a magazine that once upon a time had ever posted something that was offensive to members of my political tribe, you know, that was a major sin.

00:04:02:18 - 00:04:34:02

Chris Keefer

That's how sort of cloistered a lot of my thinking was as a result of that. Nuclear really taught me again, because it is a technology that appeals across a broad political spectrum to be tolerance, I guess, of ideas that may be uncomfortable, to really fight cognitive dissonance. And the impulse is to just sort of reject things out of hand and so, yeah, I mean, in terms of, again, the flowery language, I celebrate it and it's not like a bring it on in a macho sense, but like let's have a mature debate.

00:04:34:02 - 00:04:52:09

Chris Keefer

It's so important that we do have that battle, that there is conflict again of ideas so that we reach some kind of a synthesis position where we're making really wise choices because of something as important as energy. We can't we can't just try and, you know, pretend that there's not major disagreements. We're going to have to make hard choices.

00:04:52:09 - 00:04:56:14

Chris Keefer

So that's my, you know, further thematic riff there.

00:04:56:16 - 00:05:26:08

Chris Popoff

But let's let's no, I agree with that, Chris. So, yeah, I think it's important to touch on that, though, because human history has been a series of of stories of in groups and groups battling with one another and you use the word synthesis, which is about bringing different things together and the battle of ideas and our conversation is one of the ways we could accomplish that.

00:05:26:10 - 00:06:02:02

Chris Popoff

However, you know, one of the comments that did come out of our last episode that caught my eye the most was how could I attribute a human quality like narcissism to something that's not human like technology? And, you know, I agreed with that concept. The technology itself has no human attributes. It's weird to humanize it. But the way we apply these technologies politically and our organizing are in tribes, in political tribes, around certain solutions and ideas certainly is humanized.

00:06:02:04 - 00:06:37:06

Chris Popoff

And we can't really ignore that. The the importance of being able to have these difficult conversations is is to really challenge what our baseline assumptions are and almost undo what our natural thinking biases are going to lead us towards certain conclusions. You know, we we see a lot of stimulus in our lives every day. We have to make millions of decisions conscious and unconscious, so our biases save us on that.

00:06:37:06 - 00:06:59:19

Chris Popoff

And when the environment around us changes, sometimes our biases don't really pick up on that. So these conversations are really good at challenging when it's okay to let go of those biases and change your mind about something. So yeah, I say bring it on as well. I'm happy to have my mind changed and to be convinced and hopefully contribute something meaningful.

00:06:59:21 - 00:07:35:13

Chris Popoff

So that conversation and maybe change a few minds myself. So Oil Sands is one of those really controversial topics because of its image around being dirty. There's been very successful marketing done around that clever language, labeling it tar sands, for example, If you use that word in this province publicly or otherwise, you're immediately outed as someone that's anti-oil or with the left, maybe from Ontario or California, or at least in that climate change crowd.

00:07:35:15 - 00:07:44:18

Chris Popoff

So our word selections are very revealing as well as important. So, yeah, what would you like to to get.

00:07:44:18 - 00:08:12:11

Chris Keefer

Into to talk about today? Dr. Kieffer Yeah, I mean, I guess we've been so sort of hyper focused on so some nuclear esoterica, which I think is important. But, you know, a lot of this listenership doesn't necessarily go down quite that deep in the rabbit hole and are more broadly curious about energy, about, you know, where we're heading, about, you know, this fundamental tension between, let's say, environmentalists and eco modernists, this question of limits.

00:08:12:13 - 00:08:47:02

Chris Keefer

It's not a sexy place to sort of be in the middle. We were just talking about sort of the battle of ideas. And the polls tend to be a really comfortable place for a lot of people to be these days. Social media, no doubt has a has a role in that. It's hard to find nuance and synthesis. But yeah, wrestling with that idea of limits with, you know, this holy trinity of fossil fuels, I think with liquid hydrocarbons really being at the center in terms of, you know, the hardest thing for us to replace and really the lifeblood of our modern economy, that greases our transportation networks for goods, and also people that I think

00:08:47:02 - 00:09:09:19

Chris Keefer

emerges, you know, within neoclassical economics. We're told, you know, supply is just a function of demand. If the demand is there, then either we're going to find more supply or we're going to innovate and find substitutes. The liquid hydrocarbons seem to be a very tough nut to crack there. And I think certainly in terms of our conventional oil and gas, we have, you know, peaked in terms of that.

00:09:09:19 - 00:09:43:22

Chris Keefer

But we continue producing more oil than ever and record production out of the states. I think there is news about a month or two ago on that front, but we're having to dip into more unconventional oil things with lower energy return and energy invested. And I think that creates some anxiety, which I think has some merits. And so, you know, the big story, I think, of the early 2000s or as the British call them, the noughties was noughties was, I think one of the major stories anyway, was was the oil sands, was this unconventional oil coming on line.

00:09:43:22 - 00:10:10:18

Chris Keefer

So I'm really wanting to understand it, understand its properties, some of the challenges of of of accessing it and some of its environmental issues. But I think more fundamentally, just what it means in terms of our energy future and, you know, the prospects for for limits on oil. And I think that's probably a long and meandering enough introduction and pseudo question for you to take a couple of leaping off points.

00:10:10:18 - 00:10:11:18

Chris Keefer

So dive on it.

00:10:11:18 - 00:10:59:03

Chris Popoff

Chris Sure, sure. Yeah. The the heights of our transcendence are limited only by the the depth of our inclusion. I've heard other smarter people say and that that's true. We need to put in the work to have everybody's opinions heard and, and contribute. But we do need to reject the things that no longer work. Unconventional oil is one of these labels, again that I think it's time for usefulness has run out insofar that it's no longer unconventional oil it's it's kind of the standard when you look at when Alberta hit the point of producing more from bitumen than conventional oil reserves.

00:10:59:03 - 00:11:29:09

Chris Popoff

It was back in 2001, I believe you're right, the noughties and it's been 20 plus years since then. I think we're just under 4 million barrels a day total production in the province. Most of that gets exported to U.S. refineries. We consume a little bit internally ourselves and mostly goes towards refining into a diesel product through through a big scheme.

00:11:29:09 - 00:11:56:00

Chris Popoff

So the the genesis of the phrase unconventional resource really is just referring to the the way that we access it in, in the industry, typically what conventional reservoirs look like and how we poke holes in them were with just standard vertical wellbore is very simple, a big hole on the surface. And the deeper you got, the skinnier the hole became.

00:11:56:04 - 00:12:18:19

Chris Popoff

And that's just just the nature of that. And you you could get out the resource that way. You could complete the well just by running a little string of what's called a perforation device is down in there and you hang it and you set the charge and fires all these little bullets or charges more or less at once.

00:12:18:19 - 00:12:52:18

Chris Popoff

And it would open up the steel casing, allowing the fluid to flow in. And that was all that was required to get that resource back up to surface. There would be natural pressure drive. You're at a significant depth. It's quite warm down there. The hydrocarbons had a long time to sit in the geology and bake and mature. Ah, Berman talks about that in terms of a thermal maturity of a reservoir and really what's happening down hole in those conditions is what humans have figured out how to replicate in a refining situation.

00:12:52:22 - 00:13:23:22

Chris Popoff

On surface, really just sort of accelerating some of those processes in real time, making it more useful for us to to discern the different molecules and and put them towards different applications. And oil is one of those miracle molecules where it it contains many, many things. So that that idea of of manufactured barrel doom bird talks about the shifting definition of oil is true.

00:13:24:00 - 00:13:54:00

Chris Popoff

Berman is also correct about that concept that this is not a new thing. It's been happening for well over 20 years, if not longer. There's everything from very heavy ends where it's nasty. It's got heavy metals, lots of sulfur, not a lot of heat content. These things might end up getting used as water sealant on ships or roofs or roads, cheap roads all the way up to the lightest ends, which are the gaseous gaseous forms.

00:13:54:00 - 00:14:32:05

Chris Popoff

So natural gas, methane and everything in between. So oil really does span that entire definition. Oil and gas spans everything that's in there. And we utilize different components of that in different ways. So unconventional oil is really about not using vertical well bores and getting into drive mechanisms other than natural pressure drive in the reservoir. So oil sands is one flavor of an unconventional resource.

00:14:32:07 - 00:15:01:08

Chris Popoff

The type gas shales are also considered an unconventional resource. It's unconventional gas. But again, when you look at total production in it, conventional areas that really got their name is oil producing areas like Texas or Alberta. If you look at their conventional production rates versus unconventional production rates, the unconventional sources are outstripping the conventional by a huge margin.

00:15:01:08 - 00:15:31:03

Chris Popoff

So it's the new normal. Unconventional is a word that probably needs to go away, quite frankly, because it is the conventional that is how we access all of our new resource and future resource that we know about. And then, you know, converting a resource into a barrel, that's that's where the phrase reserve comes in. So a reserve is just something that's economically and technically feasible to recover.

00:15:31:05 - 00:16:06:21

Chris Popoff

So that's another gray area. And you're right, as prices increase, lots of people like to say the the solution to shortages is shortages because it drives price high. I mean, that's true to a point, but there are many real instances in the world where that that high price isn't enough to organize the political will, the technical skill, the physical goods and construction skills required to actually extract that stuff.

00:16:06:21 - 00:16:30:15

Chris Popoff

So there is still a lot of stranded things that may be economically feasible but are politically unfeasible. And that's the reality we're in globally right now. So you'll have proponents like Bloomberg who honestly it's it's quite nice to have people like that with such deep faith for folks in our industry. It's nice to have that kind of belief there in the crowds.

00:16:30:15 - 00:16:51:05

Chris Popoff

It's like your dad and mom cheering for you while you're playing hockey or something when you're a little kid. But it's also a tremendous amount of pressure because we see the realities of this. I mean, possibly we can get after this stuff only if someone is willing to pay for it on the other end. And there's sort of faith in the industry as well that that is true.

00:16:51:05 - 00:17:26:05

Chris Popoff

We'll continue producing because someone's going to buy it. But one day that might not be true. And that's just the economic balance. When you look at the energetic balance of getting after those things, refining them, manipulating them into these Franken molecules or Franken barrels and getting them to market in a in a useful form is a major challenge in the petrochemical industry, whether it's being consumed for transportation, fuel heating, fuel feedstock for plastics or fertilizers or other building materials, pharmaceuticals, what have you.

00:17:26:07 - 00:17:52:17

Chris Popoff

We suffer that same challenge. We need to get a form of this energy or chemical that is useful by the consumer at the time and place. They need it at a price they're able to pay. The the electricity grid also has that challenge. It's a time space issue of a kilowatt hour produced by a nuclear power plant is reliable, it's timely, it's predictable.

00:17:52:19 - 00:18:23:00

Chris Popoff

That's in kilowatt hour, produced by renewable sources, less predictable and reliable. And often it shows up when it's not being asked for. And that's how it ends up being curtailed or just thrown away. Dumped in oil and gas. We have similar analogies. We'll flare or vent or turn it into a product that can be stored for later the same way a kilowatt hour might be packed into a battery and hopefully used later.

00:18:23:02 - 00:19:06:02

Chris Popoff

So we there's a lot of things that we share in in terms of delivering a petrochemical product or a thermal heating fuel, transportation, fuel and a useful kilowatt hour. We're producing the ability to do work. And yeah, so that that phrasing, that conventional and conventional is no longer helpful. I believe it's we have what we have what we have left is harder to get at the energy content and the quality of it is reducing overall, and it takes more energy for us to deliver it to that consumer in the form factor and time and place that they can actually utilize it.

00:19:06:04 - 00:19:08:14

Chris Popoff

And that's the big challenge.

00:19:08:16 - 00:19:30:08

Chris Keefer

And I guess I can see the value of still using conventional versus unconventional purely from the perspective that we do seem to be peaking or have peaked in terms of our conventional production. And now, as you're saying, we're moving into novel ways of extracting it, not just a straight pipe down into a formation and a resource under pressure, etc..

00:19:30:10 - 00:19:50:19

Chris Keefer

Let's zoom out for a second. We did cover a little bit of Alberta geology in the past, and maybe we can be both a little more nonspecific, but also, you know, tying in to the oil sands. But just in terms of a brief history lesson, how oil gets made, you know, with fracking, you know, you hear that we're accessing the source rock.

00:19:50:19 - 00:20:10:19

Chris Keefer

Once that's drained, there's there's nothing else left. But tell us a little bit. Give us a quick geology lesson and know that's not an easy thing. And this is a big question, a bit about how oil basically is produced, you know, where it's produced, how it moves, you know, where it ends up becoming economically accessible. And then maybe we'll do a separate question about Alberta specific stuff.

00:20:10:20 - 00:20:15:13

Chris Keefer

I know there's a couple of different ways in which unconventional oil is mixed into the geology.

00:20:15:15 - 00:20:46:20

Chris Popoff

Yes. Yeah, definitely. Basically, the everything goes back to coming coming out of the the energetic reaction of of our stars quite, quite honestly. And on the history of our planet, we're fortunate to have many years of biological activity and we have many periods where there's been vast, vast forests and reefs where where there's a lot of biological activity occurring in in oceans.

00:20:46:22 - 00:21:18:16

Chris Popoff

And it's just that huge amount of biomass that will accumulate and then be covered somehow by a geologic process, whether that's a volcanic eruption, major asteroids strike huge shifts in in tectonic activities and as forests and reef structures and everything of that nature die off and then get buried, they also will be preserved. And that process over many millions of years repeats.

00:21:18:22 - 00:22:04:01

Chris Popoff

So you have layer after layer after layer of deposition occurring and it's really interesting to go and see some of these processes live and in action today. So a good analogy that will often go and observe it in geologic field studies would be modern river deltas. So where you have massive amounts of silt being deposited at the at the mouth of the Mississippi River, for example, is burying a tremendous amount of biological life and in swampy bogs along the the mouth and bodies of river, you have all these fluvial environments, all that complex twisting you see is water is flowing.

00:22:04:01 - 00:22:39:03

Chris Popoff

It's it's capturing a mix of these sands and silty clays and biologic material that ends up getting buried. And many millions of years later, that's the the geologic formation that will either capture or allow the formation of hydrocarbon, the conversion of the biomass into a hydrocarbon format. And if it is well contained, it will stay there. If it is not well contained, it will migrate into other rock formations and continue to find its way up to surface until it is trapped or it isn't.

00:22:39:05 - 00:23:05:17

Chris Popoff

So in Alberta, we have a kind of a cool situation going on with our geology. We've kind of covered how we had the good fortune of having a massive amounts of reef structures formed when we were an ancient ocean, tropical ocean, and we've had a lot of forests and things like that in later periods that we see in the layers.

00:23:05:19 - 00:23:30:12

Chris Popoff

So the layers get deposited flat. But when the mountains rock mounds were formed, it got kind of tilted on a horizon. So that helps the lighter stuff float up to the surface. And it helped the hydrocarbon as it matured, flow through the rocks and find the little reservoir traps. And the best reservoir rocks hold a lot of oil and gas and water and and keep it there until we we can find it.

00:23:30:14 - 00:23:54:13

Chris Popoff

So oil sands is a mix of things that made it all the way to the surface and also got trapped along the way. The stuff that's on the surface is the real nasty Mordor economy type imagery. You see. That's the open pit mining because it is so close to surface, it's literally on the surface or just less than 50 meters below surface.

00:23:54:15 - 00:24:29:09

Chris Popoff

That is economic to take big open pit mining activities, literally rip the sand out of the ground, throw it into a tank of warm, frothy water and have the oil come off of the sand, separating the oil in the sand, taking the oil that skimmer bill, into a processing facility where where it can be separated and sold the stuff that's a little deeper, that's too deep to mine, either practically or economically remains in what we call the the in-situ and category sag.

00:24:29:09 - 00:24:57:20

Chris Popoff

DX So steam assisted gravity drainage is one of the in-situ recovery methods that we use. That's that's typically what people talk about when they talk about oil sands. Now, in reality, SAG and mining are about equal in terms of what they contribute to Alberta's production. But we in the industry believe that there will no longer be new mines built, even though there may be reserves and resource that is mineable.

00:24:57:22 - 00:25:23:12

Chris Popoff

We just don't think the economics will work, that the political will will be there to allow for it to happen. So there's a big focus on getting after the in situ formations. What's unconventional about getting after these resources is we can't use vertical wells to to produce it. We'll use vertical wells to find it and to characterize the reservoir and make our plans.

00:25:23:14 - 00:25:44:06

Chris Popoff

But what we have to do is drill sideways, essentially. And when it's very close to surface, that becomes quite difficult. And not only do we have to drill sideways, but we have to drill these wells in pairs. So they'll track one another as they go deeper. And they essentially have to remain laying one on top of each other.

00:25:44:06 - 00:26:11:15

Chris Popoff

If you look sort of into the page as they're coming at you, the the steam that gets generated on surface and this is the the lion's share of the energy consumption is related to extracting oil sands, is generating the steam required to mobilize the oil and give it a drive mechanism that gets injected in the top well. And as the steam enters the formation, it will tend to rise.

00:26:11:17 - 00:26:53:14

Chris Popoff

And then as it rises, it cools and then comes back down towards the bottom. Well, which is the producer. And that whole balloon shaped sort of steam activity is called the steam chamber. We can only do this in formations that have competent capped rock on top of it. So thick layers of clay. The really challenging part in Alberta and the fun part of our geology is that we also have a ton of glacial activity recently where just huge amounts of of the overburden were stripped away or washed away by glaciers receding and moving, and then the resulting rivers that form.

00:26:53:16 - 00:27:14:05

Chris Popoff

So there are huge channels that are cut into these cap rocks where if a steam chamber were to be placed there, it would not be contained. It would find its way all the way up to surface. So we we have to do a lot of work to avoid those situations. We obviously do not want to cause a bunch of bitumen bubbling up to the surface.

00:27:14:05 - 00:27:38:18

Chris Popoff

It has happened so we have to be quite cautious with that. And you know, that's that's the nature of the oil sands today and that's the the resource that's deposited in that loose sandy sort of formation. There's also a ton of bitumen deposited in our our chalk like formations, which we cannot use steam assisted gravity drainage to get out.

00:27:38:20 - 00:28:04:05

Chris Popoff

We're still working on that. There's a lot of schemes that contemplate drilling these horizontal, long, horizontal wells and just using electric heating or microwaves to stimulate the water that's native in the in the reservoir as well to allow its viscosity to increase to the point where it will flow and then we can have a hope of getting after it.

00:28:04:06 - 00:28:43:23

Chris Popoff

So the the challenge is once that primary recovery method of of steaming is done, you know, some of the earliest seg de projects are getting to the point where they've recovered 70% or up to 90% in in very localized regions of their formation of what they think they can ultimately get. Meaning it's nearing the end of its useful economic life and there is an economic cut off at some point where it's no longer sensible from an economic standpoint to continue making the steam to get that barrel of oil up.

00:28:44:00 - 00:29:05:05

Chris Popoff

The value of that barrel of oil is not enough to pay for the steam that it costs to get it. So that's that's kind of where a cut cutoff point is right now. If we wanted to extend the life of these reservoirs, we'd need to figure out novel ways to generate steam less expensively or to find ways to support that activity.

00:29:05:07 - 00:29:31:20

Chris Popoff

Maybe injecting solvents like propane or other things that help sweep more oil with the same activity. Unconventional gas has has a similar challenge once its primary recovery is done, meaning that that initial pressure that is there has been depleted, there may be more molecules left in the in the formation, but it essentially locks itself up. It will not flow.

00:29:32:00 - 00:30:11:17

Chris Popoff

So you need to come up with novel, secondary or tertiary recovery methods, flooding activities where you're artificially creating pressure drives that that allow you to recover more and more of those molecules. Shale gas is in a situation and hopefully you'll be able to cover this with Berman in in future episode when you interview why that's such a challenge but industry hasn't unlocked that yet and that that's why we're we're concerned that are we at the edge of seeing what these vast, vast resource plays can contribute to the overall energy mix?

00:30:11:18 - 00:30:22:06

Chris Popoff

We're running into these technical limits of being able to actually physically get these things up to surface, whether it's economic or not. And it's a major, major concern.

00:30:22:06 - 00:30:40:05

Chris Keefer

So I do want to get into some more sort of descriptions, and I have questions about the sort of stationary power generation to make the steam. And, you know, this probably like spider, like radiation of of steam pipes, you know, and how far you can carry that steam. I'm super curious. I love getting vivid descriptions of massive bits of infrastructure.

00:30:40:05 - 00:31:06:00

Chris Keefer

But before we go, there, you know, a big consideration seems to be, you know, this idea not just of peak oil, but peak cheap oil, is that you have decreasing energy return and energy invested. So I'm curious how well this has been studied, how much energy has to go in, perhaps in sort of barrel of oil or barrel of oil equivalent to get a barrel out and how that's reflected in cost, because the fracking revolution really seems to have killed the oil sands.

00:31:06:00 - 00:31:20:06

Chris Keefer

Price of oil went quite low. There seems to be an economic threshold at which oil sands recovery is viable. But I'm curious because, you know, those prices are moving around and I think it's about $80. Maybe I'm in the bureau, correct me on that. We're as well.

00:31:20:06 - 00:31:53:08

Chris Popoff

But I think about this subject a lot and the relationship between the economics of that, the money games that we can play with these resources versus the the physics sort of based energetics. And it's amazing what we can continue to do that isn't, you know, sensible on an energetics basis. We can we can kind of fool ourselves into thinking this is good, but it is relative exercise and is it worth it to do these things?

00:31:53:08 - 00:32:24:18

Chris Popoff

Is is kind of the question rather is it economic? So with oil sands in particular, the studies show roughly the amount of energy that goes into to recovering this, you know, 3 to 4 million barrels a day of of bitumen production is about, you know, anywhere from 3 to 5 as a return. So the energy that we get into our product and exported is 3 to 5 times what we put into it.

00:32:24:20 - 00:33:01:19

Chris Popoff

And that's, by most accounts, objective of a low energy return. It's positive. It pays for itself economically and physically, but is it contributing meaningfully to a society that's growing? And when I say growing, not just producing more GDP or increasing population, but expanding the access to technological benefits or other sort of human rights within the society, whether the population is growing or not, that is that's the biggest question in my mind.

00:33:01:19 - 00:33:31:03

Chris Popoff

What is that threshold that our civilization requires to to just maintain the standard of living we have, let alone expand that standard of living when we have a significant amount of input coming into our society level system at such a low return ratchet, you know, 3 to 5 times, that's helping us survive, but it's not helping us expand or grow.

00:33:31:05 - 00:34:01:10

Chris Popoff

And what we're really doing in Alberta is just maximizing the the monetization of of the resource that we do have. And we're we're substituting the the energy that's available in the in the gas gas liquids that we're physically plugging into those bitumen barrels through refining processes in a way that makes the the energy content palatable by the consumer.

00:34:01:12 - 00:34:30:05

Chris Popoff

But it's unless you're looking at it from a whole holistic perspective and counting the contribution of all the sources to the energy contribution of just the bitumen barrel itself is not very substantial. So in a sense it's becoming a battery of sorts, a chemical battery or a carrier of of energy more than a source. So very, very similar to to a battery in that sense.

00:34:30:05 - 00:35:00:01

Chris Popoff

So it's useful, it's consumable, people can afford to pay for it. And in many markets, but not all markets. And and so that's the balance. So that's my take on the the energetics of it and how we can sustain that is only through the substitution factor. And right now the substitution bill is being paid by our abundant natural gas resource that we also are fortunate to have.

00:35:00:03 - 00:35:28:16

Chris Popoff

If we did not have that at our fingertips, this would not work the same way. And my argument with what I'm up to in the nuclear space is, well, why not do that with fissile and fertile fuels? It works with natural gas. That's a finite resource as well. For talent is also finite, but the lifespan of potential of those fuels is much greater than than what we have available for natural gas.

00:35:28:19 - 00:35:57:16

Chris Popoff

So, I mean, that's that's kind of my core argument there. And insofar as we can continue performing those substitution activities, these will remain a viable product to to the global energy consumers around the world. That that's kind of fundamentally it in terms of the economics and the economic cut off price, there's some interesting things that happen so that that WTI price barrel is the one that often gets talked about.

00:35:57:16 - 00:36:28:19

Chris Popoff

That's a benchmark price at West Texas, where West Texas and it describes a certain grade of oil. So WTI means West Texas Intermediate, and it's representative of what most people would think about what a barrel of oil is like, what the nature of it is, the mix, the energy content of that barrel is the de facto standard. And if what you produce is of greater quality, you will actually pay be paid a little bit more.

00:36:28:21 - 00:36:55:16

Chris Popoff

If the quality of what you produce is less, you get paid less. So in Alberta, we suffer that effect and we sell our bitumen at a at a benchmark called Western Canadian. Oops, sorry knocked over my like we we get paid at a benchmark called WCS Western Canadian select and there's a huge difference. We get hit with a discount and we call that the differential.

00:36:55:18 - 00:37:21:13

Chris Popoff

So not only is it important to look at the WTI price, which is nice at $80, it will pay for a lot of activities around the world, including in Alberta. But you also you have to take into account that quality discount and that fluctuates anywhere from $5 to $25 a barrel. And then there's the the exchange effect between Canadian and U.S. dollars as well.

00:37:21:15 - 00:37:59:19

Chris Popoff

So all of these prices at WTI are in U.S. dollars, W X is in Canadian. And so you have all of these conversions and discounts being applied to to our business. But typically that differential has kept itself in check as U.S. refinery refining sorry, refining activities have invested in the equipment required to take a heavier barrel. And that's that's been interesting because we've been a captive supplier to U.S. refining interests since day one.

00:37:59:21 - 00:38:31:13

Chris Popoff

Venezuela is another analogy. They're they're very much of a victim of their own sort of domestic policy. Albertan energy companies were willing to participate without taking too much for themselves compared to a nationalized Venezuela policy where, you know, it wasn't a given that Alberta would be the de facto supplier to refining U.S. refining interests as they have been over the last few decades.

00:38:31:13 - 00:39:00:10

Chris Popoff

That very easily could have been Venezuela. It still very well could be Venezuela if they they played ball the way they need to. It's quite interesting to see how these things play out. So the economics are a different game than the energetics. We're fortunate in Alberta that we figured out ways to continue winning enough in both realms that we're still at the table.

00:39:00:12 - 00:39:18:08

Chris Keefer

There is. There's so much to unpack. There are so many threads I want to pull on, and I'm going to try not to pull in too many all at once. But the geopolitics side, fascinating. And just thinking about what was happening in Venezuela as the oil sands were really taking off. I mean, part of that was obviously driven by the price of oil.

00:39:18:08 - 00:39:39:06

Chris Keefer

The price of oil was partially going up for reasons about, you know, declining conventional, I guess, but also some of the strong arming of OPEC. And I think Venezuela had something to do with that. But yeah, being sort of competitors in terms of inputs to the US, this brings me to, I guess, the question about sort of light and heavy oils.

00:39:39:07 - 00:40:17:19

Chris Keefer

I think I've got a very simplistic and perhaps incorrect sense of that. But in terms of the US being oil independence, that is not actually the case in terms of it's not producing all of the oil it needs with refinery capacity, it has to not need to import anything. In fact, it needs to, from what I understand, import a lot of heavier oils to produce, I guess, the spread that's required and some of the heavy distillates which are so fundamental to what what to God be if Randall talks to us sort of the beating heart of civilization and the blood of civilization, the diesel engine and diesel fuel.

00:40:17:21 - 00:40:50:17

Chris Keefer

So it is as Alberta's in oil sands oil, heavier. Does it work well with U.S. refineries in terms of, I guess, you know, upgrading their lighter oils to to get those heavier distillates? And and again, just to clarify, light versus heavy, like you hear about certain unconventional oils being less having less energy being less energy dense. Is it as simple as saying heavier oils have you know, they're more energy dense?

00:40:50:18 - 00:41:03:13

Chris Keefer

Is it just that they have more sulfur like help help me understand light and heavy? And then that dynamic with U.S. refineries and the role for for Alberta oil in terms of, you know, optimizing those refinery facilities as they have been set up?

00:41:03:14 - 00:41:43:07

Chris Popoff

Yeah, Yeah, absolutely. It is kind of complex in in some regards and counterintuitive in some regards as well. It's important, I think, to understand the difference between gravimetric and volumetric density. So gravimetric energy density is on a mass basis. How much energy does a does a substance contain? Volumetric is literally just in how much space can that energy be contained And I find it's more useful to think about energy density on a volumetric basis because that's how we tend to handle it.

00:41:43:09 - 00:42:13:11

Chris Popoff

Batteries versus a tank of gasoline versus a propane tank is a sort of a good example where gravimetric lih gas and oil is similar in terms of its energy content, but volume, metrically of gasoline, a tank of gasoline, that same volume of of methane or propane does not contain as much energy in the same.

00:42:13:13 - 00:42:17:14

Chris Keefer

Does not take into account compression. Does that take into account compression or.

00:42:17:16 - 00:42:51:21

Chris Popoff

Right if so, like a like a liquefied natural gas is being compressed and cooled to a great degree. See, that's exactly it. You're packing more of the molecules in the same space. That's what essentially you're doing with liquefied natural gas. So you're you're taking a fuel that has a high gravimetric content and increasing its volumetric energy density. So it takes a tremendous amount of of energy to compress all of that gaseous molecule into a liquid state.

00:42:51:21 - 00:43:29:09

Chris Popoff

And now it's comparable to other naturally existing gas liquids or hydrocarbon liquids at standard condition, meaning room temperature and atmospheric pressure. Batteries are sort of a crappy mix of both, like they're heavy and they take up a ton of volume so they don't contain that much energy on either metric. So they're they're sort of a a less useful tool for us for moving and accessing energy around.

00:43:29:09 - 00:43:54:08

Chris Popoff

So in that sense, when you think about it in in situ, so while something is information, if it's a lighter oil, it tends to flow with less resistance. It wants to be on top of the column. As you're drilling through it, it will it will naturally settle out. That way. The heavy stuff falls off the bottom, the light stuff comes to the top, and then the gas cap is at the very top.

00:43:54:10 - 00:44:30:20

Chris Popoff

And the lighter something is, the easier it flows, easier it is to get at the energy content of these different hydrocarbons. Is gravimetric really similar? But volumetric re quite different and heavy heavy oils do have less energy content than the lighter. And like the gasoline's and natural gas liquids, the gas condensates which are highly volatile, tons of energy on a mass basis, but they're very diffuse so they want to escape.

00:44:30:22 - 00:45:11:13

Chris Popoff

And heavy oils also contain lots of nasties like heavy metals. Sulfur. Is that the lighter sweeter crudes do not and the the U.S. refining complex has shifted over time to accept heavier and heavier. And so we're we're a wonderful partner for U.S. refining interests and indeed many, many refined refining interests globally take on heavy ends because they they can make great diesel fractions out of those things quite easily by inserting hydrogen into the mix.

00:45:11:13 - 00:45:41:15

Chris Popoff

So breaking up the long chain hydrocarbon molecules in those heavy ends, that's typically all that. The difference is, is the molecules that make up those fractions are longer and more complex. They're carrying more to when you're applying energy in a refining situation, what we're doing is just breaking some of those bonds up and then substituting a hydrogen on either end instead of the two carbons holding hands or you say carbons break it up, be friends with the hydrogen instead.

00:45:41:17 - 00:46:13:21

Chris Popoff

Now you're left with a smaller chain. Total mass is similar. Just a little bit of hydrogen gets added, but we're moving it up the the fraction the column. So a lighter ends and just being able to do different things with it. So that's primarily the difference between heavy and light. When we talk about the U.S. being a net producer, that's just looking at all contributions overall, they're they're making more than they can consume.

00:46:14:01 - 00:46:46:12

Chris Popoff

That does not mean they're not importing. They import a tremendous amount of of hydrocarbons as as does Canada, even though we're net exporters. So there's a little bit of a a shell game going on and a lack of nuance when someone just says, we're energy independent. Not so, not, not quite like that. There's still a lot of trading horses that goes on and partnerships that are required and relationships that need to be maintained.

00:46:46:14 - 00:47:03:07

Chris Keefer

So just a very rare, very quick question. Is Alberta oil privileged from a price perspective for having that value in terms of being able to be down blended to create your heavier distillates in your diesel fraction or it doesn't get any sort of bonus points for that?

00:47:03:09 - 00:47:37:09

Chris Popoff

No, we we we pay a penalty in fact around around the quality it's it is a trade off and again that's that's based on the embedded interest and what the refined refining interests are asking for when we get the discount applied to our production. That's essentially the refiners saying, well, this is less useful to me. I have to pay more to to effectively convert this into a product that they're not that I need to sell.

00:47:37:09 - 00:47:55:05

Chris Popoff

I need to pay for all that equipment and extra activity, plus my profits, plus my cost of capital. And there's that Oregon that we make the trade off to, to just have that barrel continue to to trade to those interests.

00:47:55:06 - 00:48:21:00

Chris Keefer

The is that because diesel and heavy distillates are not not rewarded enough are not valued highly enough. If I'm understanding correctly, Alberta heavier crudes are useful to create more heavy distillates because the US tends to have a lighter oil that's that's less compatible. That is it. Just because we don't appreciate our asphalt center, our diesel and our kerosene and we privilege our gasoline or I was comparison y yeah.

00:48:21:02 - 00:48:47:16

Chris Popoff

If you think about it in terms of the demand on the other side, that the total market for those products is different. So people are willing to pay different prices for, for those products. Gasoline's and diesels on an energy basis have a value to them. That's 3 to 10 times greater than a similar amount of energy from natural gas.

00:48:47:18 - 00:49:27:13

Chris Popoff

Even though you're buying the same heat work, potential people value the product differently and the fact that you have to pay for sulfur ization, you have to pay to synthesize hydrogen to insert into those of long chain molecules to to make a useful product. That's that's really the discount we're paying. The the interesting thing that's happened in Alberta recently around Northwest refinery re another sort of government sponsored initiative to build additional refining capacity here.

00:49:27:13 - 00:49:57:00

Chris Popoff

That's what we take about half a million barrels a for and make gasoline or diesel out of it and look to sell that it can only go so far. So if we're not consuming that diesel regionally, its price will be suppressed because we're oversupplied. Alberta really suffers from a lack of export capacity period for many of its products, and that will limit us ultimately.

00:49:57:00 - 00:50:28:15

Chris Popoff

So there's there's a little bit of that as well going on. We have no better options to sell to. If we had more customers asking for this heavy oil, maybe we'd pay less of a differential and our our local benchmark price would be closer to the global harmonized standard price. So there's a lot of really regional ised, interesting games that go on with energy trade that that are very tied to local supply and demand dynamics that are decoupled from the energy and.

00:50:28:15 - 00:50:49:05

Chris Keefer

More brief question. One more brief question and then I want to use their last 15 minutes or so to talk a little bit about alternative sources of steam and also just what this octopus cogen plant looks like, how long the tentacles are that that distribute the steam for the SAG process, etc.. But just again, society quick sort of hopefully.

00:50:49:05 - 00:51:13:12

Chris Keefer

Yes, no kind of question. Is it easier to say fission these longer, heavier chain hydrocarbons to make sort of mid-level distillates like diesel than to fuze, you know, natural gas liquids and lighter fractions together? Let's say our goal we have a diesel shortage. Our goal is to make diesel easier to fission or fusion in terms of our own reactions.

00:51:13:14 - 00:51:14:09

Chris Keefer

Yeah.

00:51:14:11 - 00:51:16:10

Chris Popoff

Vision by a mile. Yeah.

00:51:16:10 - 00:51:17:20

Chris Keefer

Okay.

00:51:17:22 - 00:51:47:17

Chris Popoff

You're you're right. Actually that's a great analogy. And the the whole gas liquids or methanol to gasoline type activity is more of the fusion type thing. Whereas what we're taking now and we're just essentially boiling or adding hydrogen to the long chain stuff and visioning it is is a lot easier, a lot less energy goes into that and it's a lot more economically viable.

00:51:47:18 - 00:51:57:01

Chris Popoff

It's also a reason why you see more of those types of refineries than you do gas liquids plants or methanol to gasoline plants.

00:51:57:03 - 00:52:13:15

Chris Keefer

And we're going to cover some of that, I think, with art later on. So in the time we have left again, I alluded to this a number of times. I want to I want to get a good verbal description of this. You know what what provides the steam to this idea and what that looks like. How far can you run the steam?

00:52:13:20 - 00:52:35:08

Chris Keefer

Like I mentioned, making a major capital investment in a stationary power source to make steam allows you to access a certain sort of what we're trying to say here, a certain area, right? Yeah. So, so just describe that to me and, and, and I guess like I'm trying to think of the timelines of production to justify a big capital investment in the stationary steam generation.

00:52:35:08 - 00:52:36:09

Chris Keefer

Source.

00:52:36:11 - 00:53:16:18

Chris Popoff

Yeah, you're right. And you don't want to build you want to build that central plant once or as few repetitive builds phases possible. So it's a bit of a balance between what's available in the market with equipment that you can select from boilermakers and turbine makers, pipeline makers, everything like that, balancing standard sizing skills with how much resource you have underneath you and how many of these centralized plants are you planning on building because that's the bulk of your your investment is is the central plants.

00:53:16:18 - 00:53:47:09

Chris Popoff

And as you go further, you add costs every kilometer you build on your your steam lines and emulsion lines and utility lines and so on and so forth. But the rule of thumb that industry's sort of settled on is that 35 to 50000 barrels a day face size and the amount of resource you have underneath you will determine the number of phases you'll need to build over the life span to get at that.

00:53:47:11 - 00:54:19:00

Chris Popoff

And we'll typically run the economics to to about a 40 to 50 year sort of end ultimate recovery for for that project. So there's is more or less a commitment saying this plant will probably take 50 years to recover all of the resource that's underneath us economically and the the physical extent that we've been able to push steam distribution distances is, you know, anywhere from 10 to 12 and a half.

00:54:19:00 - 00:54:48:03

Chris Popoff

Some operators are pushing it to 215 kilometers at the very, very outset. And that's because they're getting skilled with how the they utilize their steam and and being sensitive to the realities of their particular reservoir and how they how that reservoir reacts to the steam. But ten kilometers is a good rule of thumb to to talk about how far you can reach from one plant.

00:54:48:05 - 00:55:05:11

Chris Keefer

That's I mean it's both foreign and not far. It's just the biggest depends how you look at it. Yeah, I guess I guess if it's matching a kind 50 year production profile, then that's the life of the the steam generating asset. I think if I'm not going well beyond my expertise here now that's.

00:55:05:16 - 00:55:06:20

Chris Popoff

You've got it.

00:55:06:22 - 00:55:31:08

Chris Keefer

Yeah. All right. This doctor has been learning a lot. Okay. So again, we have we have about five or 6 minutes left. Got to get off to a shift. Speaking of doctrine, so you've been involved with your nuclear startup and I think inspired to to pursue that as you were kind of alluding to towards a before as alternative ways to to make steam.

00:55:31:08 - 00:55:53:04

Chris Keefer

You mentioned that right now there's there's lots of gas and you can run a overall energetically unfavorable process kind of I guess storing the gas in the extracted oil energy is the kind of battery I thought that was a really good way to look at it. But yeah, let's talk a little bit about nuclear produced steam to mobilize that bitumen, What that looks like taken away.

00:55:53:06 - 00:56:28:09

Chris Popoff

Yeah, absolutely. So the it's sort of key insight or proposition that I make when when I'm proposing that we use fusion plants to generate our steam is is again that substitution factor we're looking at either a choice between combusting a methane molecule to generate the steam at the right temperatures or in some of the mining activities, they'll actually burn the very bottom ends of their production and use petcoke and and just the drag.

00:56:28:09 - 00:56:45:05

Chris Popoff

So essentially to to generate steam petroleum and coke. So it's it's just really chunky, gritty, nasty comes from coal or bitumen processing it's the it's after you stripped out all the nice light stuff it's what remains.

00:56:45:07 - 00:56:46:11

Chris Keefer

The bunker but you can see.

00:56:46:11 - 00:57:31:07

Chris Popoff

Combusted but it's yes like a solid it's really kind of grotty stuff, but it has energy content and it has a lot of emissions when you when you combust it. So even even one of the major mine mining projects in Alberta is converting their their coking boilers over to a gas fired co-generation plant and they're they'll be supplying their steam needs and putting another 7 to 800 megawatts of electricity back to the grid which is something that, you know, they're they're looking at everybody else around them and realizing how much they're making off of electricity production and through sort of getting into that game.

00:57:31:09 - 00:58:07:01

Chris Popoff

And, you know, that's all well and good. But a fusion reaction has energy potential. That's, you know, millions of times greater and what a combustion reaction offers. So the the amount of fissile, fertile fuels that we have available to us in combination with that reality of just how energetic those reactions are, gives you a really long tail to work with in terms of playing the substitution game where you can have extremely crappy air or why activities like like gas to liquids or methane to gasoline plants.

00:58:07:01 - 00:58:32:21

Chris Popoff

You might have sub one your allies like, wow you know it it's it's really not energetically amazing but when you have very little options available to you and you have an abundance of fuel source that it takes to drive these things, you might consider doing it. So this is this is why the technology was born to begin with.

00:58:32:21 - 00:59:00:08

Chris Popoff

It was invented essentially in German chemical labs during a war time when they were physically restricted from having access to any of the liquid fuels. But they had a ton of coal and a lot of an ingenuity and they figured out how to do it. South Africa in is in a situation that's similar. They don't have the war constraints, but they have a lot of other physical constraints and lots of coal.

00:59:00:10 - 00:59:46:00

Chris Popoff

And that's how Sasol has been able to justify their investment in in some of these gas to liquid plants. Same thing with what we see in the Middle East with pearl tons of abundant gas and an ability to to recover those investments by selling the higher valued liquids. Alberta is kind of in a similar game. So if we like playing these games and people want to keep buying them, we can continue playing the game almost indefinitely by tapping into this extremely abundant energy supply That's many, many times more energetically excess of the euro I of of fusion reactions.

00:59:46:00 - 01:00:18:15

Chris Popoff

Even in conventional reactors, is anywhere from 25 to 75, so well above what's required to put to pay the substitution bill and contribute that into the the society level system at a at a level that's above that minimum threshold of maintenance, it will actually encourage and expand growth. When when I look at the Moonsault reactor type variant, the the energy return on invested is anywhere from 100 to 1000 times.

01:00:18:15 - 01:00:53:06

Chris Popoff

So that's really good. That's that's really attractive to me and why it works really well for this type of activities because it's primary output is is heat and these processes are heat hungry. They're they're really big energy pigs, but they eat their energy in terms of temperature, not electricity per se. And the temperature range is relevant, too. So a lot of these processes run in around 350 C and that's that's just a sweet spot for this type of machine.

01:00:53:11 - 01:01:19:23

Chris Popoff

And not only can it supply the the content, but it can supply the quality of the energy and steam required to continue these activities as is and that's really important, being able to dovetail in with existing skill and infrastructure, I think just gives emerging technologies a higher chance of success overall regardless of what it is and including advanced reactors.

01:01:20:01 - 01:01:53:08

Chris Popoff

So when we're talking about nuclear, I'm definitely one of the of the above type guys to a point large reactors, we definitely need them. We need more of them. They need to continue being built and refurbished. ESA Mars, where they make sense, are in the markets that the large reactors don't fit and these massive thermal markets in remote locations are good examples of where existing gigawatt scale reactors just are a mismatch in terms of a market set.

01:01:53:10 - 01:01:55:14

Chris Popoff

And and is that that's what we have in our product.

01:01:55:14 - 01:02:20:16

Chris Keefer

And is that more of a sizing issue or like I've heard one of the criticisms of conventional nuclear is that the steam produced isn't super high temperature, therefore it's less efficient in terms of making electricity and obviously just combusting fossil fuels. You can get insanely high process heat and steam heats and, you know, I think that's the rationale for some of the high temperature gas reactors or molten salt or sodium reactors is is again, getting a higher temperature.

01:02:20:20 - 01:02:32:22

Chris Keefer

You need that higher temperature steam for sagged or or is that sort of 350 degrees centigrade heat from conventional steam from nuclear? Okay. I thought it had to be higher temperature.

01:02:33:00 - 01:03:24:17

Chris Popoff

Yeah. So the temperatures that our molten salt reactor will run at are at or higher than 350. They're closer to 600 C and that's sufficient to get the the steam in the conditions that are required to push it that distance that 10 to 12 kilometers. The the 350 degree threshold I was referring to is largely around what's required to run a gas to liquid pipes process from a meeting to a gasoline type process, which is important because our our temperature at 600, if it's sited in in a plant that needs high pressure steam to run, say, D, but it's also trying to feed a co-located or closely located plant that is upgrading the bitumen to

01:03:24:17 - 01:04:02:09

Chris Popoff

a higher quality product. It can it can be sufficient to supply both and having these complexes develop. I think of them as sort of like lily pads. They'll be able to have these sort of bloom points where they, they build out thermal and electric grids that supply just the, the content and quality of the energy required by those activities and not necessarily have to be tied into greater expensive energy infrastructure that's closer to major population centers, which is another important thing.

01:04:02:15 - 01:04:12:22

Chris Popoff

People don't love living next to the petrochemical plants or nuclear plants, believe it or not, until they do and they realize it's maybe not that bad.

01:04:13:00 - 01:04:41:00

Chris Keefer

The nuclear ones. Yeah. Okay. So damn these these hard stops, but just really. So as a result, really briefly, because there was a plan to deploy nuclear in Alberta and probably enough it was very large nuclear. It was the advanced candu reactors around 1100 megawatts. And we had a interesting conversation before. But that was because, as you mentioned, these carbonates, oil deposits in the north, I believe steam doesn't work well for them.

01:04:41:00 - 01:05:02:08

Chris Keefer

And so they were going to run literally like resistance coils like what you have on a conventional stovetop through these formations that that's very inefficient in terms of heat loss and energy use. So I guess that justifies these super large units that didn't take off. It's unfair to ask you to answer that briefly, but try and be as brief as a chance.

01:05:02:08 - 01:05:04:13

Chris Keefer

I won't be late for work.

01:05:04:15 - 01:05:08:17

Chris Popoff

Yeah, you know why? Why didn't take off? Is that the question?

01:05:08:19 - 01:05:30:06

Chris Keefer

Yeah. And just. I mean, the I maybe I've kind of summarized it sufficiently, but that that previous plan in Alberta to deploy nuclear but fair distance in terms of some of the socialized this work and site investigation. yeah and Bruce Power actually buying a company I think energy Alberta so so there was serious consideration.

01:05:30:07 - 01:05:58:23

Chris Popoff

Yeah and I think also at the time the just the background was different as well. So if you know there's there's these ifs and scenarios and yeah it was it was definitely something that industry was charging ahead on at that time was getting after the the carbonate based bitumen. But there was also a recognition that the the electric demand on the system may also grow.

01:05:58:23 - 01:06:24:22

Chris Popoff

So even if that never came to be the carbonate development never came to be, it was possible that the electricity could be sold to the grid. There were still hurdles to that because the north and south were not as connected as they are today. There was not the excessive co-generation supply being put to the grid by the classic segue de sort of expansion.

01:06:25:00 - 01:06:57:11

Chris Popoff

Coal interests were still being permitted to operate and there is somewhat of a protectionist tradition in in our province that, you know, embedded interests should be allowed to continue to trade in the activities, you know, just being grandfathered in and being permitted to have the full extent of of the deal that was made with them when they initiated their action, they made their investments that they don't want to be cut off early.

01:06:57:11 - 01:07:29:18

Chris Popoff

Essentially. So there were those factors. And then just the physical factor of, well, we have this grid that's only about I think it was about six or eight gigawatts total. And when you're planning to put 4.4 new gigawatts onto that and any one plant tripping for any reason, good or bad or normal, that's a huge amount of the grid that would need to be backed up and spooled up immediately or else triple blackout.

01:07:29:18 - 01:07:55:12

Chris Popoff

So having having a really big grid or something with you know, a lot of embedded storage like with hydro or tons of, you know, ready peaking gas available might have made something like that a little more palatable for the grid operator to swallow. But they just couldn't. So they they wanted to essentially ask, well, can you break that into smaller chunks?

01:07:55:12 - 01:08:28:02

Chris Popoff

We're okay with the total amount, but we just want to protect ourselves from this kind of emergency condition. And they only had the one option to sell electricity. So if if their output could have been diverted to other activities or otherwise curtailed, then that's that's one thing when you're selling into a project or a thermal grid of of other petrochemical processes, you know, we'll back that up probably with conventional gas combustion.

01:08:28:04 - 01:08:54:04

Chris Popoff

If, if the heat from the fusion processes is is upset, there are buffers that you can build in either with backup combustion or you have a thermal storage of some other sort that creates a bit of a buffer or you just ramp down your production activities, You cut yourself out like a blackout in that sense is economically harmful, but it's not catastrophic to the well-being of the entire society.

01:08:54:06 - 01:09:05:12

Chris Popoff

Not being able to have a warm home in a -40 situation, it's not going to kill people. So it's a totally different proposition.

01:09:05:13 - 01:09:29:11

Chris Keefer

Okay, Chris, kind of sorry for that last kind of curveball question. All I just had to add to satisfy my personal curiosity. Thank you again for coming back. Really a great, great mix of qualities that you bring to this conversation. I'm sure you'll be a recurring theme on On Decouples. So appreciate the time, my friend. And until until next time.