In Situ Report Card - Pembina Institute

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DrillingDEEPERTHE IN SITU OIL SANDS REPORT CARDJEREMY MOORHOUSE MARC HUOT SIMON DYERMarch 2010OilSANDSFeverS E R I E S

Drilling DeeperThe In Situ Oil SandsReport CardJeremy MoorhouseMarc HuotSimon DyerMarch 2010

The In Situ Oil Sands Report CardAbout the Pembina InstituteThe Pembina InstituteBox 7558Drayton Valley, Alberta, T7A 1S7Phone: 780-542-6272E-mail: info@pembina.orgThe Pembina Institute is a nationalnon-profit think tank that advancessustainable energy solutions throughresearch, education, consulting andadvocacy. It promotes environmental,social and economic sustainability inthe public interest by developingpractical solutions for communities,individuals, governments and businesses.The Pembina Institute provides policyresearch leadership and education onclimate change, energy issues, greeneconomics, energy efficiency andconservation, renewable energy, andenvironmental governance. For moreinformation about the PembinaInstitute, visit www.pembina.org orcontact info @ pembina.org.AcknowledgementsThe Pembina Institute thanks theWilliam and Flora Hewlett Foundationfor its support of this work. ThePembina Institute would also like toacknowledge the support of Cenovus,Shell and Husky for participating in thisprocess. Each of these companiesiiDRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARDgraciously reviewed and commentedon the data the Pembina Institutehad collected for this analysis. Theircomments and insights improvedthe quality of this report and thePembina Institute’s understandingof in situ operations.The Pembina Institute

The In Situ Oil Sands Report CardAbout the AuthorsJeremy MoorhouseTechnical AnalystJeremy is a Technical Analyst with thePembina Institute’s CorporateConsulting team. He provides technicalanalysis for life cycle value assessmentsfor decision-making.Jeremy’s other projectsinclude conductingresearch into practicesand strategies forsustainability andevaluating theperformance of currentand proposed oil sandsprojects. Assessing andevaluating emergingtechnologies is also akey focus of Jeremy’swork. His technical backgroundincludes experimental miningequipment design and production, aswell as experimental data analysis. Hehas experience and knowledge in energysystems, water management and solidwaste management. Jeremy holds abachelor’s degree in mechanicalengineering from McGill University.Simon DyerOil Sands Program DirectorSimon Dyer is a registered professionalbiologist and has worked on land useissues in western Canada since 1999.Simon represented the PembinaInstitute on the Sustainable EcosystemsWorking Group of the CumulativeEnvironmental ManagementAssociation (CEMA). Simon holds aMaster of Science in environmentalbiology and ecology from the UniversityThe Pembina Instituteof Alberta, and aMaster of Arts innatural sciencesfrom CambridgeUniversity. Simon isthe co-author ofDeath by aThousand Cuts:Impacts ofIn Situ Oil SandsDevelopment onAlberta’s BorealForest and HasteMakes Waste: The Need for a New OilSands Tenure Regime.Marc HuotPolicy AnalystMarc Huot is a Policy Analyst with thePembina Institute’s Oil Sands Program.Marc is involved with researching andreviewing environmental impactsassociated withoil sandsdevelopment.His technicalbackgroundincludesknowledge ofrenewableenergy, life cycleassessmentmethodologyand energysystems. Marc holds a Bachelor ofScience and a Master of Science inmechanical engineering from theUniversity of Alberta.DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARDiii

The In Situ Oil Sands Report CardDrilling Deeper: The In Situ Oil Sands Report CardMarch 2010Editor: Roland LinesLayout: J&W Communications IncCover Photo:Courtesy of Husky EnergyCover Photo / Inset:David Dodge, The Pembina Institute 2010 The Pembina InstituteivThe Pembina InstituteBox 7558Drayton Valley, AlbertaT7A 1S7 CanadaPhone: 780-542-6272E-mail: info @ pembina.orgAdditional copies of this publicationmay be downloaded from our website,www.oilsandswatch.org.DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARDThe Pembina Institute

The In Situ Oil Sands Report CardTable of ContentsExecutive Summary . ixIntroduction . 1Project Scope . 3Data Collection . 4Performance Criteria . 4Cogeneration . 14Scoring . 15Limitations . 16About In Situ Production . 17Alberta’s Oil Sands . 17In Situ Production Technologies . 17Mining . 19SURVEY RESULTS . 20General Environmental Management . 211. Continuous Improvement . 222. Third-Party Validation . 233. Public Data Reporting . 244. Regulatory Compliance . 26Land . 295. Footprint . 306. Conservation Offsets . 327. Caribou Habitat . 348. Conservation Planning . 359. Biodiversity Monitoring . 37Air Emissions . 3910. Nitrogen Oxides Emissions . 4011. Sulphur Dioxide Emissions . 4212. Reduction Targets . 44The Pembina InstituteDRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARDv

The In Situ Oil Sands Report Card T A B L EOF CONTENTSWater .4513. Total Water Consumption . 4614. Freshwater Consumption . 4815. Liquid Waste . 5016. Reduction Targets . 52Climate Change . 5317. GHG Emissions . 5418. Reduction Targets . 56Conclusions . 57Recommendations . 61Government . 61Industry . 63Summary of Conclusions and Recommendations . 66Appendix: Project Summaries . 69Canadian Natural Primrose/Wolf Lake . 70Cenovus Christina Lake . 71 Cenovus Foster Creek . 72Husky Tucker . 73Imperial Oil Cold Lake . 74JACOS Hangingstone . 75Shell Peace River . 76Suncor Firebag . 77Suncor MacKay River . 78Endnotes . 79viDRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARDThe Pembina Institute

The In Situ Oil Sands Report Card T A B L EOF CONTENTSList of FiguresFigure 1: In situ oil sands development has the potential to occur over a region 30times larger than the mineable oil sands area north of Fort McMurray . 1Figure 2: Map of in situ oil sands projects included in this report . 5Figure 3: Industrial development within caribou ranges is largely responsible for thedecline of woodland caribou herds in Alberta . 7Figure 4: Growing acidifying emissions from oil sands development may pose arisk to northern lakes . 10Figure 5: Water treatment facilities at Husky Tucker . 11Figure 6: Simplified life cycle activities included or excluded in this analysis . 13Figure 7: Cogeneration allocation methodology . 15Figure 8: Actual and forecast bitumen production volumes from in situ and miningsources in Alberta . 17Figure 9: In situ oil sands production by technology type, including water injection,cyclic steam stimulation, steam assisted gravity drainage and experimentaltechnologies . 18Figure 10: SAGD wellpads at Suncor Firebag . 18Figure 11: Cyclic steam stimulation . 19Figure 12: Steam assisted gravity drainage . 19Figure 13: Seismic lines cross-cut the boreal forest near Fort McMurray . 20Figure 14: Project land use intensity based on footprint area and bitumen productionvolumes over the total project lifetime . 30Figure 15: Conservation offsets can compensate for the residual, unavoidable harmto biodiversity caused by development projects . 32Figure 16: The cumulative impacts of in situ oil sands projects need to be includedin land use planning . 35Figure 17: NOx emissions per barrel of bitumen produced . 40Figure 18: SO2 emissions per barrel of bitumen produced . 42Figure 19: Total water consumption per barrel of bitumen produced . 46Figure 20: Freshwater consumption per barrel of bitumen produced . 48Figure 21: Liquid waste production per barrel of bitumen produced . 50Figure 22: Greenhouse gas emissions per barrel of bitumen produced . 54The Pembina InstituteDRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARDvii

The In Situ Oil Sands Report Card T A B L EOF CONTENTSList of TablesTable 1: List of projects included in the assessment . 3Table 2: Summary of general environmental management scores per project . 21Table 3: Summary of compliance records by in situ operator for 2007 . 27Table 4: Summary of land scores per project . 29Table 5: Summary of air emission scores per project . 39Table 6: Summary of water scores per project . 45Table 7: Summary of climate change scores per project . 53Table 8: Summary of project scores . 57Table 9: Best practice in situ development checklist . 65Table 10: Summary of Canadian Natural Primrose/Wolf Lake’s 2007environmental performance . 70Table 11: Summary of Cenovus Christina Lake’s 2007 environmental performance 71Table 12 Summary of Cenovus Foster Creek’s 2007 environmental performance . 72Table 13: Summary of Husky Tucker’s 2007 environmental performance . 73Table 14: Summary of Imperial Oil Cold Lake’s 2007 environmental performance 74Table 15: Summary of JACOS Hangingstone’s 2007 environmental performance . 75Table 16: Summary of Shell Peace River’s 2007 environmental performance . 76Table 17: Summary of Suncor Firebag’s 2007 environmental performance . 77Table 18: Summary of Suncor MacKay River’s 2007 environmental performance . 78viiiDRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARDThe Pembina Institute

The In Situ Oil Sands Report CardExecutive Summary Forest fragmentation is one of the environmental impacts of in situ oil sands development.PHOTO: DAVID DODGE, THE PEMBINA INSTITUTEDevelopment of deep oil sandsdeposits using in situ (in place)extraction techniques is growingrapidly in Alberta, Canada. There islimited information and discussionabout the environmental impacts andperformance of in situ oil sandsdevelopment. This report represents thefirst attempt to compare the environmental performance of in situ oil sandsoperations that were in operation in2007 (the most recent period for whichdata was publicly available). The oilThe Pembina Institutesands companies were asked to respondto questions in five categories: generalenvironmental management, land, airemissions, water and climate change.The average score for in situ operationsin the survey was 44%. Suncor Firebagreceived the highest overall score of60%, followed closely by CenovusFoster Creek (57%), Imperial Oil ColdLake (55%) and Suncor MacKay River(53%). Canadian Natural Primrose /Wolf Lake received the lowest overallscore (25%).DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARDix

The In Situ Oil Sands Report Card E X E C U T I V ESUMMARYGeneralEnvironmentalManagement(out of 3)Land(out of 5)AirEmissions(out of 3)Water(out of 4)ClimateChange(out of 2)OverallScore1.531.753160%Cenovus Foster Creek22.7522157%Imperial Oil Cold Lake2.52*1.252.50.555%Suncor MacKay ell Peace River(demonstration)33*00038%Cenovus Christina Lake(pilot)221.500.7537%Husky Tucker (start-up)2301035%JACOS Hangingstone(demonstration)0.52*0.520.534%Canadian NaturalPrimrose/Wolf Lake1.510.751025%ProjectSuncor FirebagAVERAGE Summary of project scores (*Imperial Oil Cold Lake, Shell Peace River and JACOS Hangingstonewere scored out of four for land indicators because they were not scored on land use intensity.)Key Findings1. CLEAR ROOM FOR IMPROVEMENTThe majority of in situ operators laggedin the following areas: Few projects have established absolutereduction targets for air emissions,water use and GHG emissions thatgo beyond government requirements. Few projects have invested inbiodiversity offsets to compensate forthe impacts associated with in situdevelopment. Only three companies currentlysupport regional biodiversitymonitoring.x Only two companies have thirdparty accredited environmentalmanagement systems for theirprojects.2. POOR DISCLOSURE OF ENVIRONMENTALPERFORMANCE DATAThe quality and quantity of projectspecific environmental data makescomparing in situ projects a timeconsuming enterprise. There is limitedpublicly available and accessibleenvironmental impact data to informdiscussion of in situ environmentalperformance.DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARDThe Pembina Institute

The In Situ Oil Sands Report Card E X E C U T I V E3. IN SITU AND MINING PROJECTSBOTH HAVE SIGNIFICANTENVIRONMENTAL IMPACTSWhile the analysis shows that oil sandsmining is more intensive on a per barrelbasis in some environmental impactcategories, such as land use, nitrogenoxide emissions and water intensity, atypical in situ project has more intensivegreenhouse gas and sulphur dioxideemissions than mining. In addition, ourland intensity assessment did notincorporate the impacts of fragmentation and upstream natural gas production associated with in situ operations.14. BEST PRACTICES ARE NOTWIDELY ADOPTEDThe average project score of 44% clearlydemonstrates the need for improvement.A fictional project designed from thebest elements of each oil sands projectcould achieve a score of 85% in thisassessment. In other words, in situoperators could achieve a score of 85%in this assessment by incorporatingcurrent industry best practices. A 100%score is also achievable by combiningcurrent in situ industry best practiceswith two best practices from otherindustries: setting public environmentaltargets to reduce absolute water use, airemissions and greenhouse gas emissions;and establishing biodiversity offsets.5. CUMULATIVE IMPACTS AREGENERALLY NOT CONSIDEREDThis assessment considers the impactsand performance of in situ oil sandsprojects at the project level. Given theoverall pace and scale of oil sandsdevelopment – in both in situ andmining operations – there is aninadequate level of environmentalmanagement to ensure that theThe Pembina InstituteSUMMARYregional environment is protected fromcumulative impacts.Recommendationsfor GovernmentGovernment and industry both haveclear roles in improving environmentalperformance in the oil sands. One ofthe main barriers to adopting leadingenvironmental practices is a lack ofincentive. Oil sands companies thatadopt leading practices receive very littlereward for their environmental initiatives, while laggard companies receivevery little punishment. Government canhelp improve environmentalperformance in the oil sands by creatinga competitive environment that rewardsenvironmental stewardship andinnovation while penalizing laggardcompanies.1. Mandate environmental stewardshipWeak government requirements forenvironmental performance appear tobe responsible for the inconsistentapplication of best practices across theindustry. To correct this situation,government should do the following: Encourage companies to establishpublic reduction targets by providingsome benefit to companies that settargets and punishing laggardcompanies that do not demonstratecontinuous environmentalimprovement. Mandate compensatory offsets tomitigate the terrestrial impacts of insitu oil sands development, anddevelop conservation offset policiesas recommended by the proposedwetland policy for Alberta2 andResponsible Actions: A Plan forAlberta’s Oil Sands.3DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARDxi

The In Situ Oil Sands Report Card E X E C U T I V E Integrate mandatory financial supportfor the Alberta BiodiversityMonitoring Institute into existingand future approvals. Mandate third-party accreditation ofenvironmental management systemsfor in situ projects.2. Make oil sands environmentalperformance data morecomparable and accessibleProject-specific and cumulative oil sandsin situ environmental performance dataneeds to be available in an accessibleand comparable format.3. Limit in situ environmental impactsIn situ operations have significantcumulative and long-term impacts andshould be submitted to rigorousenvironmental impact assessments,monitoring and regulation.4. Create a regulatory systemthat rewards innovation1. Demonstrate leadership Establish project-specific absolutereduction targets for water use, airemissions and greenhouse gasemissions that go beyond governmentrequirements. Invest in biodiversity offsetscommensurate with the terrestrialimpact of the in situ project. Financially support the AlbertaBiodiversity Monitoring Institute andintegrate its results into managementplanning. Implement a third-party accreditedenvironmental management systemfor the in situ project.2. Provide accessible public dataProject-specific environmental datashould be disclosed publicly in a formatthat is comparable across the in situindustry.3. Focus on the issuesIn situ operators have very littleincentive to improve their environmental performance. Government mustconsider how harness the innovativecapacity of the oil sands industry toaddress environmental issues.In situ developments have significantenvironmental impacts and there issignificant room for improvement acrossthe industry. Seriously engage stakeholders and publicly discuss solutions tothese issues.5. Halt new approvals untilenvironmental managementsystems are complete4. Incorporate best practicesand lead improvementsComplete a regional managementsystem to protect the ecological integrityof Alberta’s ecosystems from the cumulative impacts of oil sands developmentbefore approving new projects.Recommendations for IndustryGovernment action must be supportedand matched by the oil sands industry.xiiSUMMARYDRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARDAdopt current best practices andcontinuously improve once bestpractices have been adopted.5. Acknowledge cumulative impactsof in situ developmentTake a leadership role in support ofestablishing regional environmentalthresholds and of completing landuse planning.The Pembina Institute

The In Situ Oil Sands Report CardIntroductionPeople in Canada, in NorthAmerica and around the worldare searching for sustainableenergy supplies for their growing energydemands. Sources of sustainable energywould allow people to meet their needstoday without sacrificing the long-termneeds of future generations. Morespecifically, a sustainable energy sourceprovides the environmental services(clean water, air and land), socialservices (health, equal opportunity andrights) and economic services (wealth,profit and tax revenue) to satisfy ourneeds today without preventing futuregenerations from receiving theenvironmental, social and economicservices they need.The oil sands are among the mostcontroversial energy sources in Canada.The Pembina Institute’s perspective isthat in order to support a transition to asustainable energy future, anydevelopment of the oil sands must occurin a responsible manner that addressesthe need to make global reductions ingreenhouse gas (GHG) pollution andprotects regional ecosystems.As a way of gauging the sustainability ofmining-based oil sands operations andhighlighting best practices, in 2008 thePembina Institute and World WildlifeFund Canada published a report thatcompared the environmentalperformance of 10 existing andproposed oil sands mines. That report, Figure 1: In situ oil sands development has the potential to occur over a region 30 times largerthan the mineable oil sands area north of Fort McMurray.PHOTO: DAVID DODGE, THE PEMBINA INSTITUTEThe Pembina InstituteDRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARD1

The In Situ Oil Sands Report Card I N T R O D U C T I O NUnder-Mining the Environment: The OilSands Report Card,4 found that givenexisting practices and availabletechnologies, even the top performerhad significant room for improvement.The aim of this report is to conduct asimilar analysis for in situ oil sandsdevelopment. It provides quantitativeinformation on the currentenvironmental performance of in situ oilsands projects and attempts to definewhat responsible in situ oil sandsdevelopment means at the individualproject level. In doing so, it will clearlydemonstrate which companies areleading and why, and offer suggestionson how poorly performing companiescan improve their environmentalperformance. As with the 2008assessment, it is the first of its kind.The importance of objectively assessingthe relative environmental performanceof in situ operations is three-fold.1. Although mining is currently thedominant form of oil sandsproduction on a volume basis, and isprojected to stay dominant until2030, the majority of oil sandsdeposits are only accessible throughin situ technologies. Understandingthe differences in environmentalperformance between operations canhelp regulators and companies designprojects with less impact on theenvironment than current ones.2. The individual impacts of each in situoperation contribute to cumulativeenvironmental impacts, which canlead to significant regionalenvironmental impacts. In the 2006report Death by a Thousand Cuts:2The Impacts of In Situ Oil SandsDevelopment on Alberta’s BorealForest,5 the Pembina Institute andthe Canadian Parks and WildernessSociety concluded that in situ oilsands development itself is anintensive and long-lived form ofunconventional energy developmentthat has significant environmentalimpacts. This new report, DrillingDeeper: The In Situ Oil Sands ReportCard, offers greater context for thatfinding. By presenting theenvironmental impacts of in situproduction on a project-specific basis,it can serve as a resource forregulators, companies andstakeholders to more clearly assess,limit or decrease cumulative impacts.3. Proponents of in situ oil sandsdevelopment increasingly assert thatin situ production has considerablylower environmental impacts thanmine-based production. To date, noone has undertaken a definitivecomparison of the two modes ofproduction on an intensity basis (orsome other relative indicator), whichmakes it difficult for stakeholders toadequately evaluate this claim. Thisreport compares in situ productionwith mining production wherepossible to objectively highlight therelative benefits and drawbacks ofeach bitumen production method. Italso provides a clearinghouse of insitu data for such a comparison wherenone previously existed, and cantherefore aid a future, more robustcomparison of oil sands miningversus in situ development.DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARDThe Pembina Institute

The In Situ Oil Sands Report Card I N T R O D U C T I O NProject ScopeThis report ranks thermal in situprojects that were in operation for allof 2007, including both commercialand pilot projects. The PembinaInstitute chose to include only theseprojects for a number of factors. Firstly,during the time of the assessment only2007 data was publicly available foractive in situ projects. The PembinaInstitute requested more recent datafrom each of the companies includingin this survey, but only three respondedwith data. Instead of providingperformance data for different years,only 2007 data were used to provide aconsistent comparison. Where possible,we have noted if a project’senvironmental performance hasimproved since 2007. Secondly, basedon our experience with Under-Miningthe Environment, it is more complex tocompare active projects with plannedprojects. Finally, the nine projectsincluded in the assessment representthe full range of commercial in situtechnologies and producing regions. Table 1: List of projects included in the assessmentLead Company2007 AverageTechnologyProduction (bbl/day)Project Name2007 StatusCanadian Natural(Canadian NaturalResources Limited)Primrose/Wolf LakeCommercial61,050CSSCenovus (CenovusEnergy Incorporated) 6Christina LakeFoster Creek5,29549,258SAGDSAGDHusky (Husky Start-up1,672SAGDImperial Oil(Imperial Oil Limited)Cold LakeCommercial153,459CSSJACOS (Japan CanadaOil Sands yal Dutch Shell PLC)Peace RiverDemonstration9,560mix oftechniques 7FirebagCommercial36,893SAGDMacKay RiverCommercial21,248SAGDSuncor (Suncor EnergyIncorporated)The Pembina InstituteDRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARD3

The In Situ Oil

The Pembina Institute DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARD iii The In Situ Oil Sands Report Card Jeremy Moorhouse Technical Analyst Jeremy is a Technical Analyst with the Pembina Institute’s Corporate Consulting team. He provides technical analysis for life cycle value ass

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