10 environmental successes achieved by Canada’s oil and gas industry

Worker on a wildlife crossing at MEG Energy's Christina Lake oil sands project. Wildlife crossings are strategically placed approximately every 400 metres over above-ground pipelines at the project. Photo courtesy MEG Energy

Canada’s oil and gas industry is achieving success on its path to continuously reduce environmental impacts, and its innovations are being used to inform better practices around the world. This reality belies the characterizations of opponents that the sector is a laggard in environmental protection and performance.

Here are 10 examples of ongoing environmental success in Canadian oil and gas.

10. Planting millions of trees

Major oil sands producers planted more than 25 million trees between 2009 and 2018 to help reclaim areas of boreal forest impacted by development, according to BMO Capital Markets.

This includes five million trees planted as part of the Faster Forests program, a voluntary joint initiative by producers through Canada’s Oil Sands Innovation Alliance (COSIA). The approach, developed with regulators and researchers, takes lessons from how a forest re-generates after a wildfire. It is now used across in situ oil sands projects and as a best practice for land use in Alberta.

9. Providing a clearer picture of global methane emissions

This fall, Montreal-based GHGSat launched a free online high-resolution map showing concentrations of methane emissions around the globe. The map, which is updated on a weekly basis, uses data collected from GHGSat satellites, aircraft sensors and proprietary analytics.

GHGSat identified a massive methane leak at the Korpezhe oil and gas field in Western Turkmenistan in 2019, and the smallest methane emission ever detected by a satellite, a controlled release in Alberta in October 2020.

The company says it is making data openly available to support industry and governments to reduce emissions.

GHGSat launched its first orbital methane-scoping probe in 2016, thanks to a collaboration with COSIA and Suncor Energy.

8. Spending billions on environmental protection and R&D

Canada’s oil and gas sector spends more on environmental protection than any other Canadian industry, according to CEC research. From 2006 to 2016 (the most recent year with data available), the oil and gas sector spent $24.5 billion on environmental protection, or more than four times the next highest spender, electric power generation at $5.6 billion.

Environmental protection spending includes everything from reclamation and decommissioning of abandoned and orphan wells to the installation of pollution prevention processes and technologies, environmental audits, and wildlife protection.

Meanwhile, Canada’s largest oil sands producers consistently spend more per barrel on research and development than global oil majors, according to BMO Capital Markets. Major oil sands operators have collectively invested more than $1 billion per year on R&D since 2012, including a record $1.2 billion in 2018.

BMO says that “this mounting R&D investment may just be starting to bear fruit [with] companies just at the cusp of demonstrating the full impact of innovation on environmental performance.”

7. Reclaiming inactive oil and gas wells faster

A collaborative initiative is underway between the Alberta Energy Regulator (AER) and industry that is designed to eventually “flatten and reverse the trend” of liabilities associated with inactive oil and gas wells.

A voluntary program called area-based closure (ABC) has been described as “a regulatory paradigm shift” in Alberta. Basically, instead of focusing spending on keeping inactive wells safely suspended, the program enables oil and gas producers to re-direct that investment to abandonment and reclamation – in essence, working faster to remove wells permanently as a liability.

The AER says that during the first full year of the program in 2019, 56 companies participated, with 44 committing to an inactive liability reduction target. There were 136 confirmed projects, and approximately $244 million committed to closure work by companies working towards a target.

6. Acting to reduce methane emissions

Efforts in Canada to decrease methane emissions from oil and gas have been recognized to result in a smaller footprint compared to other jurisdictions.

The construction permit for a US$310-million LNG project that is currently under construction in Tacoma, Washington includes the requirement that it source natural gas from British Columbia or Alberta in order to reduce greenhouse gas emissions.

A life-cycle analysis of the project conducted in 2018 – including “upstream” GHG emissions from natural gas production – found Canada to have emissions from natural gas that are five times or more lower than in the United States.

The Puget Sound Clean Air Authority pointed to regulatory requirements in Canada provincially and federally that are intended to reduce methane emissions, such as rules that require companies to control methane leaks from production equipment.

Alberta and British Columbia have set targets to reduce methane emissions from oil and gas by 45 per cent by 2025 compared to 2014 levels, while the Government of Canada’s target is to reduce emissions by 40 to 45 per cent by 2025 compared to 2012 levels.

5. Leading the world on reducing flaring

Canada’s oil and gas industry is among the best in the world when it comes to reducing air emissions from flaring, according to CEC research.

Analysis shows that Canada currently ranks 22nd out of the world’s top 30 countries for flaring, despite being the fourth-largest oil and gas producer. Canada also showed the second-largest decrease in flaring over the five years between 2014 and 2018 – a 38 per cent decrease.

Flaring in the oil and gas industry is subject to strict environmental regulations in Canada, including Alberta’s Directive 60, which was introduced in 1996 and reduced flaring in the province by 70 per cent by 2006.

4. Guiding global CCS projects

In addition to reaching major project milestones in 2020, there is more evidence that Canada’s expertise in carbon capture and storage (CCS) and carbon capture, utilization and storage (CCUS) is being used to inform development of this important emissions-reduction technology around the world.

In June, Shell announced that the Quest CCS project at its refinery near Edmonton is exceeding storage targets at a lower cost than expected. The company said that in less than five years of operation, Quest has captured and stored more than five million tonnes of CO2, or the annual emissions from about 1.25 million cars.

Also in June, the world’s newest CCUS project and largest CO2 pipeline, the Alberta Carbon Trunk Line, came online. ACTL is a CCUS project because it uses the captured CO2 for enhanced oil recovery, adding a saleable product to CCS alone.

The Global CCS Institute reports that, including the new ACTL project, carbon capture facilities in Canada now have capacity of approximately 3.5 million tonnes of CO2 equivalent per year. That’s the equivalent of capturing the emissions of about 750,000 passenger vehicles annually.

That figure does not include all of the CO2 that is stored at the Weyburn CCUS project in Saskatchewan, which has sequestered more than 34 million tonnes of CO2 equivalent since 2000 while enhancing oil recovery.

Canada was an early adopted of CCS/CCUS, and its experience is being recognized by global players. In May 2020, Shell and partners Total and Equinor announced they would proceed with the Northern Lights CCS project on the Norwegian Continental Shelf, which will have initial capacity to store up to 1.5 million tonnes of CO2 per year.

“Northern Lights has incorporated lessons from Quest, which has been sharing knowledge and lessons learned over the last five years to encourage more widespread implementation of CCS,” Shell said in a statement.

3. Reducing water use

Canada’s oil sands producers are well on their way to meeting targets to reduce fresh water use. The members of COSIA – which represent about 90 per cent of oil sands production – have set a target to reduce fresh water-use intensity for drilled oil sands projects by 50 per cent compared to 2012 by 2022. As of 2019, the companies achieved a 44 per cent reduction, down to 0.2 barrels of fresh water per barrel of oil produced.

Meanwhile, for mining projects COSIA has set a target of reducing water use intensity from the Athabasca River by 30 per cent by 2022. As of 2019, companies achieved a reduction of 22 per cent on the way to reaching this target, down to 1.7 barrels of Athabasca River water per barrel of oil.

2. Managing oil sands tailings

Oil sands producers have made major strides dealing with tailings in recent years, including Canadian Natural Resources reducing its new project tailings by half and Suncor reducing its total operated tailings footprint altogether.

According to the AER, between 2015 and 2019 Suncor reduced the fluid tailings inventory at its Base Mine by almost 17 per cent, from 316 million cubic metres to 263 million cubic metres.

Meanwhile, Canadian Natural Resources “has proven its ability to reduce fluid tailings by approximately 50 per cent in its latest expansion at Horizon, along with approximately 14 per cent decrease in GHG emissions,” according to BMO Capital Markets.

Overall, the total volume of oil sands mining tailings since 2015 has been lower than expectations despite growing oil production, according to AER data.

As of 2019, producers had regulatory approval to have 1.4 billion cubic metres of tailings inventory, but actually had approximately 1.27 billion cubic metres of tailings inventory, or about 10 per cent less than expected.

1. Reducing GHG emissions intensity

Oil sands producers have been decreasing emissions intensity per barrel for over a decade and the trend continues, according to analysis by IHS Markit. This includes a bigger than expected decrease of 10 per cent for oil sands mining projects between 2017 to 2018.

IHS Markit reports that since 2009, the weighted average emissions intensity of oil sands projects has fallen by 20 per cent, from 88 kilograms of carbon dioxide equivalent per barrel (kgCO2e/bbl) to 70 kgCO2e/bbl.

This assessment is supported by Environment and Climate Change Canada, which in its 2020 National Inventory Report says that oil sands emissions intensity has declined steadily from 97 kgCO2e/bbl in 2005 to 78 kgCO2e/bbl in 2018.

According to BMO Capital Markets, several oil sands projects already have below-average carbon footprints in North America.

COSIA says that efforts are continuing to reduce GHG intensity further, “paving the way for bold climate commitments, including net zero and near net zero goals as announced by some of our members.”

Read this at www.canadianenergycentre.ca