Conventional fossil fuels are widely used, however there are growing concerns about the security of their supply, volatility in their prices and the environmental impacts of their extraction and use. The objective of this research is to investigate the potential for replacing conventional fuels in various applications, focusing on the Alberta oil sands industry. Such investigations require systems-level approaches able to handle multiple criteria, uncertainty, and the views of multiple stakeholders. To address this need, the following are developed: life cycle assessment (LCA) and life cycle costing models of polygeneration systems; a life cycle-based framework for multi-sectoral resource use decisions; and a method combining LCA and real options analyses to yield environmental and financial insights into projects. These tools are applied to options for utilizing oil sands outputs, both the petroleum resource (bitumen) and by-products of its processing (e.g., asphaltenes, coke), within the oil sands industry and across other sectors. For oil sands on-site use, multiple fuels are assessed for the polygeneration of electricity, steam and hydrogen, in terms of life cycle environmental and financial impacts; asphaltenes gasification with carbon capture and storage (CCS) is the most promising option, able to reduce greenhouse gas (GHG) emissions to 25% of those of current natural gas-based systems. Coke management options are assessed with the life cycle-based framework; the most promising options are identified as: Electricity generation in China through integrated gasification combined cycle; and, hydrogen production in Alberta, either for sale or use by the oil sands industry. Without CCS, these options have amortized project values ranging from $21 to $160/t coke. The application of the combined LCA and real options analyses method finds that uncertainty in natural gas and potential carbon prices over time significantly impacts decisions on coke management; the formulated decision tree identifies increases of 29% and 11% in the financial and GHG emissions performance, respectively, of the overall coke management project compared to pursuing the decision identified by the life cycle-based framework. While promising options for replacing conventional fossil fuels are identified through systems-level analyses, there are trade-offs to be made among the financial, risk and environmental criteria.

A computational fluid dynamics model has been developed to examine the separation of an oil film from a spherical oil-coated particle falling through quiescent water due to gravity. Using this model, the separation process was studied as a function of the viscosity ratio of oil to water, R, and the ratio of viscous forces to surface tension, represented by the Capillary number Ca. The governing equations of this flow-induced motion are derived in a non-inertial spherical coordinate system, and discretized using a finite volume approach. The Volume-of-Fluid method is used to capture the oil/water interface. The model predicts two mechanisms for oil separation: at R less than 1, the shear difference between the particle/oil interface and the oil/water interface is not significant and Ca determines whether separation occurs or not; at R larger than 1, the shear difference is considerable, and the Ca effect becomes less dominant.

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A computational fluid dynamics model has been developed to examine the separation of an oil film from a spherical oil-coated particle falling through quiescent water due to gravity. Using this model, the separation process was studied as a function of the viscosity ratio of oil to water, R, and the ratio of viscous forces to surface tension, represented by the Capillary number Ca. The governing equations of this flow-induced motion are derived in a non-inertial spherical coordinate system, and discretized using a finite volume approach. The Volume-of-Fluid method is used to capture the oil/water interface. The model predicts two mechanisms for oil separation: at R less than 1, the shear difference between the particle/oil interface and the oil/water interface is not significant and Ca determines whether separation occurs or not; at R larger than 1, the shear difference is considerable, and the Ca effect becomes less dominant.

No description available.

The inadvertent ingestion of contaminated soil is the dominant exposure route of non-volatile and semi-volatile contaminants such as polycyclic aromatic hydrocarbons (PAHs). Quantitative mass balance soil ingestion studies have been used to determine soil ingestion rates for use in human health risk assessments (HHRA) that can be used to predict the likelihood of adverse effects in individuals exposed to hazardous contaminants such as PAHs in contaminated soil. The Cold Lake region of Alberta is one of the three major oil sands regions of Alberta, and PAH concentrations in this oil sand region may be elevated in the atmosphere and the soil, resulting in increased exposures to PAHs. The area is home to Cold Lake First Nation who practice traditional activities and lifestyles that may put them in greater contact with soil than previous soil ingestion studies suggest. The primary objective of this research was to assess the soil ingestion rate in a group of First Nations subjects inhabiting the Cold lake region, and assess the carcinogenic risk posed by exposures to PAHs in air and soil. The study employed a quantitative mass balance tracer approach to estimate soil ingestion rates, and followed 9 subjects over a 13 day period. Soil and air samples were simultaneously collected to assess PAH contamination. The mean soil ingestion rate using Al and Si elemental tracers was 52 mg d-1, with a 90th percentile of 220 mg d-1, and a median soil ingestion rate of 37 mg d-1. These values are greater than the soil ingestion rates for HHRA recommended by Health Canada. The mean increase in excess lifetime cancer risk posed by inadvertent ingestion of soil to a First Nations’ individuals following traditional activities was 0.02 cases per 100,000 people with a 95% risk level of 0.067 cases per 100,000 people. Exposure to PAHs through inhalation posed a maximum lifetime cancer risk below 0.1 cases per 100,000, people. Thus, this study found no appreciable increase in excess lifetime associated with PAH exposure of First Nations’ people in the Cold Lake region.

This thesis consists of three essays on risk management in crude oil markets. In the first essay, the valuation of an oil sands project is studied using real options approach. Oil sands production consumes substantial amount of natural gas during extracting and upgrading. Natural gas prices are known to be stochastic and highly volatile which introduces a risk factor that needs to be taken into account. The essay studies the impact of this risk factor on the value of an oil sands project and its optimal operation. The essay takes into account the co-movement between crude oil and natural gas markets and, accordingly, proposes two models: one incorporates a long-run link between the two markets while the other has no such link. The valuation problem is solved using the Least Square Monte Carlo (LSMC) method proposed by Longsta ff and Schwartz (2001) for valuing American options. The valuation results show that incorporating a long-run relationship between the two markets is a very crucial decision in the value of the project and in its optimal operation. The essay shows that ignoring this long-run relationship makes the optimal policy sensitive to the dynamics of natural gas prices. On the other hand, incorporating this long-run relationship makes the dynamics of natural gas price process have a very low impact on valuation and the optimal operating policy. In the second essay, the relationship between the slope of the futures term structure, or the forward curve, and volatility in the crude oil market is investigated using a measure of the slope based on principal component analysis (PCA). The essay begins by reviewing the main theories of the relation between spot and futures prices and considering the implication of each theory on the relation between the slope of the forward curve and volatility. The diagonal VECH model of Bollerslev et al. (1988) was used to analyse the relationship between of the forward curve slope and the variances of the spot and futures prices and the covariance between them. The results show that there is a significant quadratic relationship and that exploiting this relation improves the hedging performance using futures contracts. The third essay attempts to model the spot price process of crude oil using the notion of convenience yield in a regime switching framework. Unlike the existing studies, which assume the convenience yield to have either a constant value or to have a stochastic behaviour with mean reversion to one equilibrium level, the model of this essay extends the Brennan and Schwartz (1985) model to allows for regime switching in the convenience yield along with the other parameters. In the essay, a closed form solution for the futures price is derived. The parameters are estimated using an extension to the Kalman filter proposed by Kim (1994). The regime switching one-factor model of this study does a reasonable job and the transitional probabilities play an important role in shaping the futures term structure implied by the model.