CALGARY -- A new technology that transforms heavy crude oil into pill-sized pellets could cure the oilsands industry's transportation headaches, according to University of Calgary professor Ian Gates.
The newly patented technique creates self-sealing balls of bitumen of various sizes that can then be moved in coal rail cars or transport trucks with less risk of environmentally harmful spills, thus reducing the need for new pipelines, he said.
The technology was discovered accidentally by Gates and research engineer Jackie Wang at the University of Calgary's Schulich School of Engineering.
"We were trying to upgrade and we learned how to degrade," said Gates on Wednesday.
"For these products, we've taken it to degrading the outer surface of pellets ... so we have an intact pellet that's kind of like a black Advil pill."
Gates said Tuesday a pilot project able to generate one barrel per day of the pellets will start up in November, to be followed by a scaled-up commercial demonstration project able to produce about 600 barrels per day.
He estimated it would cost about $1 million to build a machine that could deliver 100 barrels per day of pellets but added the cost per barrel will fall dramatically with larger scale projects.
Canadian National Railway (CNR.TO) unveiled a similar-sounding technology earlier this year, announcing it had filed a patent application for CanaPux, a process that turns bitumen into a semi-solid for transportation by mixing and coating it with polymer.
But Gates says his system is better because it doesn't require chemical additives or complex equipment -- it uses heat to remove some of the lighter petrochemical molecules from the bitumen and a roller system to make the pellets.
He said there's a potentially "massive" market for the pellets which can be used as is to make asphalt or can be converted back to bitumen by reinjecting the lighter oil.
Opponents of new oilsands pipelines such as the Trans Mountain expansion through B.C. have argued that bitumen will be hard to clean up if it leaks into water because it will sink.
Gates says it is possible to inject an air bubble into his pellets to make them float, allowing recovery with a fishing net.