Canada / Shale Daily / Regulatory / NGI All News Access

Canadian Oil, NatGas Producers Taking Up Low-Carbon Call

Vows in the Canadian fossil fuel industry to go on a low-carbon diet have spread beyond Alberta thermal oilsands production into British Columbia (BC) natural gas.

Encana Corp. reports paring down greenhouse gas (GHG) exhaust from Montney Shale development by running three processing plants on renewable power generated by BC Hydro dams on the Peace River.

“We have our marching orders,” Encana Vice President Richard Dunn said at the GHG Emission Reductions Forum held by the Petroleum Technology Alliance Canada (PTAC). Cooperation on innovations to achieve environmental compliance ranks high on the agenda of the Calgary-based corporate, government and academic talent pool.

In northern BC, the Montney processing trio built by Encana’s Cutbank Ridge Partnership and Pembina Pipeline Corp.’s Veresen subsidiary will make a 1 million ton reduction in annual carbon emissions by using electric instead of natural gas-fueled hardware, Dunn said.

The greened plants -- Sunrise, Tower and Saturn sited near the BC leg of the Alaska Highway -- are a C$2.5 billion ($2 billion) package designed to extract up to 70,000 b/d of liquids from 1 Bcf/d of Montney natural gas.

Encana started up Sunrise and Tower in late September, with Saturn on pace to start up later this year.

The switch to electricity makes the Encana-Pembina team the second-biggest customer of provincial government-owned BC Hydro, said Dunn. Spin-offs include a new C$296 million ($237 million) Dawson Creek-Chetwynd Area Transmission Line for a northern BC power supply region of 11,000 residential and industrial customers.

The gas plant trio stands out as early stars in a campaign to rebrand Canadian fossil fuel production as “clean” energy, by disproving the “dirty oil” image spread internationally by opponents of tar sands plants and pipelines.

Cenovus Energy Inc. technology manager Craig Stenhouse echoed other oilsands producers in declaring a commitment to a clean-up goal -- in his case a 25% carbon emissions cut within 10 years, largely by substituting solvents for gas-fired steam injections used in underground in-situ extraction.

Also within 10 years the PTAC network is working with regulatory agencies on complying with Alberta and federal government orders for a 45% cut as of 2025 in methane emissions, rated as 25 times more potent than carbon dioxide.

The forum heard reviews of nearly 20 methane clean-up technologies, ranging from improved tank lids and storage bladders to carbon-eating bacteria and converting offending gas into useful solids such as fish fertilizer and building supplies.

In Canada’s chief gas-supply jurisdiction, industry watchdog Alberta Energy Regulator (AER) pledged to accept an array of ways to hit the clean-up target, as adaptations to varying production systems and locations.

“It’s the outcome that’s important, not how you get there,” said AER’s Mark Taylor, operations chief.

As provincial and federal emission rules, carbon taxes and cap-and-trade systems spread across the country, Canadian fossil fuel veterans say adapting is a must regardless of professional opinions of United Nations-sponsored climate change science.

“The sense of urgency has really clicked in,” said Stenhouse.

David Collyer, a former president of Shell Canada Ltd. and the Canadian Association of Petroleum Producers (CAPP), said, “We’re on a path that’s unlikely to be reversed.” The industry’s critics have built political momentum, he added.

Global government and investor responses to popular GHG science require industry to be carbon-competitive by ranking favorably on emissions yardsticks against rival suppliers, said CAPP climate and innovation director Patrick McDonald.

Canadian industry elders have parted ways from the political right, where Alberta’s newly formed United Conservative Party aims to undo carbon actions taken by the province’s two-year-old New Democratic Party government.

A carbon price, set by Alberta and federal taxes, is an essential market signal for action on emissions, said Gordon Lambert, a retired senior executive of top oilsands producer Suncor Inc. Turning Canada’s chief gas and oil producing jurisdiction into a climate policy-free zone would set the industry back two decades, he said.

ISSN © 2577-9877 | ISSN © 2158-8023

Recent Articles by Gordon Jaremko

Comments powered by Disqus