Of course it’s no longer an emerging trend. The environmental impact of all businesses – from global giants to small local operations – is a crucial fact of contemporary life.
About a decade ago, it was no surprise that Alberta’s oilsands became the poster industry for ravaging the environment. It led to a prime opportunity for technology advancements and oil production sciences to mesh together and take on some legit and notorious oilsands issues.
After all, Canada generates about 1.8 per cent of global greenhouse gas emissions and the oilsands contribute about 9.3 per cent of that total. The Alberta government has set a hard cap of 100 million tonnes per year, which could limit growth in the oilsands unless GHG emissions can be reduced.
The year 2012 marked the perfect timing for Canada’s Oil Sands Innovation Alliance (COSIA) and the collaboration of industry giants Suncor, BP, Cenovus, Syncrude, Nexen, Teck, Imperial, Devon, ConocoPhillips and Canadian Natural to co-operate and share innovation expertise to do something for the primary oilsands focus on the key environmental issues of greenhouse gases, land, water and tailings.
Six years, and hundreds of million dollars later, it’s a good opportunity to question how it’s going and how much the oilsands is impacting the environment.
“There has been much progress on the oilsands use of water and greenhouse gas emissions,” says Dan Wicklum, former CFL football player and the tremendously knowledgeable and understandably biased COSIA chief executive. “An 18 per cent reduction in water-use intensity from the COSIA member companies engaged in mining operations and a 42 per cent reduction in fresh-water use at in-situ operations.
“Between 2012 and 2016, there has been an 11 per cent reduction in GHG emissions intensity at in-situ sites and a nine per cent reduction in emissions intensity at mining operations.”
He also cites other oilsands innovation, like finding new ways to reduce the need for steam, which causes almost 80 per cent of its greenhouse gas emissions.
Wicklum explains that generating steam to separate heavy sticky bitumen from the northern Alberta sands is responsible for about 56 million tonnes per year of the total 71 million tonnes of GHGs emitted from the oilsands.
He is blunt and admits that, although the innovations continue, the past few Alberta downturn years have not been easy for the oilsands and the COSIA partners. “It has been challenging, no doubt about it. Particularly with lower-for-longer commodity prices and all the consequences that has for corporate balance sheets. But through it all, the commitment of COSIA members has not waned.
“If anything, it has strengthened,” he says with enthusiasm. “The project count has gone up year over year, and by the end of 2017, COSIA companies had shared 981 distinct technologies and innovations that cost over $1.4 billion to develop. Last year, COSIA companies started 99 new projects worth $188 million. Today, in its active portfolio, COSIA has 308 active projects, costing $545 million.”
Despite nearly three years of industry speed bumps, Wicklum is passionate and proud of COSIA’s effective and forward-looking vision, innovation and accomplishments.
“To date, our members have made 431 implementation decisions on the technologies developed and shared through COSIA,” he says. “The research and innovation around in-situ subsurface steam and waterless extraction has potential to lower water and land use, and reduce production costs as well as GHGs. It is an area of focus that will lead to far-reaching improvements.
“There are very promising technologies in the area of steam reduction. One example is direct contact steam generation (DCSG). Using a specialized burner, configured much the way a rocket engine is, waste water is put in direct contact with a heating flame. The resulting product, called flue gas, is a mixture of steam and carbon dioxide (CO2) that can all be injected underground to recover bitumen.”
He adds that DCSG is more energy efficient, and doesn’t require water treatment, so it uses less energy, cuts costs and decreases GHG emissions.
While there is genuine industry respect and enthusiasm about the focus, commitment and momentum of COSIA to impact its four defined environmental targets of oilsands performance, some analysts and industry insiders are cautious about the coombaya of 10 fiercely competitive oil giants to genuinely co-operate and share strategies, technologies and innovation.
“By and large, the oilsands is doing a good job about reducing the environmental impact. Unfortunately, too many people in the industry – governments, Alberta’s energy regulator and even the activists – don’t know about it,” says the outspoken Dr. Bob Schulz, a professor at Calgary’s Haskayne School of Business.
“The industry does not do a good job of collecting and matching to performance targets and COSIA doesn’t seem to have an effective communication plan. There has to be much better environmental reporting and collaborating. There are various really good things being done. But I really don’t feel the industry is willing to collaborate.
“The way COSIA goes about sharing is very flawed and companies are only motivated to put technologies into the collective pot. But the industry must do a much better job with communicating,” Schulz adds with frustration and passion. Canada is way ahead of other global producers. “The glass is definitely half full. Many activists say the glass is half empty.
“There’s so much focus on the oilsands, which are making impressive environmental progress. Nobody is talking about shutting down all the coal plants in China and India. And there is little discussion about unethical offshore oil. Canada’s east coast refineries use offshore oil. If the government really wants to levy an environmental tax, put it on unethical oil.”
The urgent topic of climate change and COSIA’s four defined areas where oilsands impact is being addressed is a critical global (and Alberta) topic. It’s also a thorny fact of business life.
“Perhaps the biggest challenge is: how do we continue to be a profitable, growing business in a world that demands a much stronger focus on environmental performance and social responsibility?” asks Steve Williams, president and CEO of Suncor.
He references the global challenge of tackling climate change and points out, “We all have a shared interest in finding solutions. At Suncor, we’ve moved on several fronts – internally and externally – to reduce our greenhouse gas (GHG) emissions intensity while providing the energy the world needs. We came very close to meeting our 2015 energy efficiency improvement target (first set in 2009) and, in 2016, we announced an ambitious new sustainability goal: to reduce the total GHG emissions intensity of our oil and petroleum products by 30 per cent by 2030. It’s a target we believe that puts us on the path to ultimately bending the curve on our absolute GHG emissions as well.
“Along with other oilsands producers, we’ve collaborated with our peers, with environmental leaders, with Aboriginal Peoples and with other governments to help advance climate change policy that has made Alberta a global leader in this area.
“Ambitious action will be required by all of us to effectively tackle the climate change challenge,” he emphasizes, “and it is our conviction that technology will continue to transform our industry to a place of global cost and carbon competitiveness.”
