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Lincoln's Cleaver-Brooks Plant Making Boilers for Canada Oil Sands

February 11, 2012

Oil is a boom business in Fort McMurray, Alberta, where an abundance of jobs, its remote location and frigid temperatures -- Friday's overnight low was minus 18 -- put labor at a premium.

"It's a hostile environment," said Richard Kettler, a geochemist who teaches courses on energy issues at the University of Nebraska-Lincoln. "It gets cold. People really don't want to live there."

Those conditions, as well as the commitment to heavy crude oil, have led to a boon for boiler builders at Lincoln's Cleaver-Brooks plant.

For the past eight years, the plant has manufactured some three-dozen massive boilers used to generate huge quantities of steam used to remove heavy crude from Canada's Athabasca Oil Sands, the same oil TransCanada is shipping in Keystone pipeline, and wants to ship in the Keystone XL. 

Each boiler is the size of a small house and weigh about 200,000 pounds.

"They're huge pieces of equpment," said Jason Jacobi, an engineer and sales manager at Cleaver-Brooks in Lincoln.

The company lists major oil extractors such as Shell and Canadian Natural Resources Ltd. among its clients.

"No one else in the world really needs that much steam," Jacobi said. "We've made a focus, as a company, to address that market."

Projects with several boiler units can come with price tags as high as $50 million to $60 million, Jacobi said.

The boilers are used to generate steam, which is then pushed into the earth, often as part of a process called steam assisted gravity drainage, an alernative to open-pit mining that is less invasive to the landscape and can reach oil deposits deep below the surface. The steam from one well reduces  the viscosity of the oil, and a parallel well brings the thinned oil and the condensed steam water to the surface.

"Most of the oil ... from that area will be eventually recovered using a technique like this," Kettler said. "It's cleaner, cheaper, works a lot better for everybody."

Another extraction process that also uses steam is called cyclic steam stimulation, in which the same well is used to pump steam into a reservoir, then pull oil and water out.

Cleaver-Brooks' boilers -- which also are in South America, the southern United States and the Middle East -- can be used in both extraction methods.

Before about 10 years ago, most steam boilers were built on the oil fields where they were used. The company makes prepackaged and modular boilers, which are almost entirely assembled before leaving the plant.

Jacobi said Shell approached Cleaver-Brooks with the idea in 2004.

"Twenty years ago, if you had real heavy oil, you couldn't give it away," Kettler said. Now, "the price of oil is such that they can justify recovering that heavier oil."

And there's a similarly high demand for equipment used in heavy oil extraction, he said.

"These guys are gonna be in business for a while."

Reach Zach Pluhacek at 402-473-7234 or zpluhacek@journalstar.com.