LONDON, November 20, 2014 /PRNewswire/ --
Canada has pioneered oil sands development, but a new technology could open up oil sands processing in the United States, Bloomberg reports .
Toronto-based MCW Energy Group (MCWEF: OTCQB; TSV: MCW.V) will begin producing cleaner, cheaper oil from oil sands next year at a newly built processing plant in northeastern Utah - home to some 32 billion barrels of heavy crude, which represents more than half of America's known oil sands reserves.
MCW Energy cut the ribbon last month on a new oil sands extraction pilot plant near Vernal, Utah, home to the Asphalt Ridge deposit, which is alone thought to hold one billion barrels of oil.
For Utah, the prospects are boundless. A number of large players - including Houston-based Marathon Oil (NYSE:MRO), EP Energy Corporation (NSE:EPE) and Newfield Exploration Co. (NYSE:NFX)- have already been attracted to the state's Unita Basin, but the focus could now shift to oil sands.
MCW's technology could prove to be a much cleaner process than the oil sands in Canada. It does not use any water, and MCW says oil sands can be produced cleanly "without creating the toxic wastelands that have resulted from oil sands projects in Western Canada." It uses a proprietary technology that allows for the separation of oil from crushed rock and sand. Once separation is completed, the sand can be safely returned to its original site.
Even better, MCW says it can produce a barrel of oil at a cost of just $38, which is about half of the roughly $75 per barrel cost in Alberta.
MCW's new pilot plant can handle only around 250 barrels a day, but that is just the beginning. With the commercial viability of its proprietary extraction technology demonstrated, it hopes to expand its pilot facility and also build subsequent sites elsewhere.
MCW is the pioneer here, but others are catching on. Calgary-based US Oil Sands (USO:CN) is planning to open a similar plant in Utah next year to produce about 2,000 barrels per day.
With production costs coming in around $30 a barrel using this new technology, not even slumping oil prices can derail the Utah project, which has the ability to hit profits even if oil prices drop to $65 a barrel.
We could be looking at a parallel American oil boom here - once again spawned by fast-moving new technology.
By James Burgess of Oilprice.com
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SOURCE Oilprice.com
