DEEPER Drilling - Pembina Institute · Each of these companies graciously reviewed and commented on the data the Pembina Institute ... x DRILLING DEEPER: THE IN SITU OIL …

JEREMY MOORHOUSE • MARC HUOT • SIMON DYER

March 2010

DEEPERTHE IN SITU OIL SANDS REPORT CARD

Drilling

SANDSFeverOil

S E R I E S

Jeremy Moorhouse Marc Huot

Simon Dyer

March 2010

Drilling DeeperThe In Situ Oil Sands

Report Card

ii DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARD The Pembina Institute

The In Situ Oil Sands Report Card

About the Pembina Institute

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 companies

graciously reviewed and commented on the data the Pembina Institute had collected for this analysis. Theircomments and insights improved the quality of this report and thePembina Institute’s understanding of in situ operations.

The Pembina Institute is a nationalnon-profit think tank that advancessustainable energy solutions throughresearch, education, consulting andadvocacy. It promotes environmental,social and economic sustainability in the 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 [email protected].

The Pembina Institute

Box 7558

Drayton Valley, Alberta, T7A 1S7

Phone: 780-542-6272

E-mail: [email protected]

The Pembina Institute DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARD iii


Jeremy MoorhouseTechnical AnalystJeremy is a Technical Analyst with thePembina Institute’s CorporateConsulting team. He provides technicalanalysis for life cycle value assessments

for 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’s

work. His technical backgroundincludes experimental miningequipment design and production, aswell as experimental data analysis. Hehas experience and knowledge in energysystems, water management and solid-waste 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 University

of Alberta, and aMaster of Arts innatural sciencesfrom CambridgeUniversity. Simon isthe co-author ofDeath by aThousand Cuts:Impacts of In 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.

About the Authors

iv DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARD The Pembina Institute


March 2010

Editor: Roland Lines Layout: J&W Communications IncCover Photo: Courtesy of Husky Energy

Cover Photo / Inset: David Dodge, The Pembina Institute

©2010 The Pembina Institute

The Pembina InstituteBox 7558Drayton Valley, Alberta T7A 1S7 Canada

Phone: 780-542-6272E-mail: [email protected]

Additional copies of this publicationmay be downloaded from our website,www.oilsandswatch.org.

Drilling Deeper: The In Situ Oil Sands Report Card

Executive Summary .................................................................................................. ix

Introduction .............................................................................................................. 1

Project Scope .......................................................................................................... 3

Data Collection ...................................................................................................... 4

Performance Criteria .............................................................................................. 4

Cogeneration ........................................................................................................ 14

Scoring ................................................................................................................. 15

Limitations ........................................................................................................... 16

About In Situ Production ....................................................................................... 17

Alberta’s Oil Sands ................................................................................................ 17

In Situ Production Technologies .......................................................................... 17

Mining ................................................................................................................. 19

SURVEY RESULTS ................................................................................................. 20

General Environmental Management .................................................................... 21

1. Continuous Improvement ................................................................................ 22

2. Third-Party Validation ..................................................................................... 23

3. Public Data Reporting ..................................................................................... 24

4. Regulatory Compliance .................................................................................... 26

Land ......................................................................................................................... 29

5. Footprint .......................................................................................................... 30

6. Conservation Offsets ........................................................................................ 32

7. Caribou Habitat ............................................................................................... 34

8. Conservation Planning ..................................................................................... 35

9. Biodiversity Monitoring ................................................................................... 37

Air Emissions ........................................................................................................... 39

10. Nitrogen Oxides Emissions ............................................................................ 40

11. Sulphur Dioxide Emissions ............................................................................ 42

12. Reduction Targets ........................................................................................... 44

Table of Contents

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vi DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARD The Pembina Institute

The In Situ Oil Sands Report Card T A B L E O F C O N T E N T S

Water .........................................................................................................................45

13. Total Water Consumption .............................................................................. 46

14. Freshwater Consumption ............................................................................... 48

15. Liquid Waste .................................................................................................. 50


Climate Change ....................................................................................................... 53

17. GHG Emissions ............................................................................................. 54


Conclusions ............................................................................................................. 57

Recommendations ................................................................................................... 61

Government ......................................................................................................... 61

Industry ................................................................................................................ 63

Summary of Conclusions and Recommendations ................................................ 66

Appendix: Project Summaries ................................................................................ 69

Canadian Natural Primrose/Wolf Lake ................................................................ 70

Cenovus Christina Lake ....................................................................................... 71

` Cenovus Foster Creek ........................................................................................... 72

Husky Tucker ....................................................................................................... 73

Imperial Oil Cold Lake ........................................................................................ 74

JACOS Hangingstone .......................................................................................... 75

Shell Peace River ................................................................................................... 76

Suncor Firebag ...................................................................................................... 77

Suncor MacKay River .......................................................................................... 78

Endnotes .................................................................................................................. 79

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List of FiguresFigure 1: In situ oil sands development has the potential to occur over a region 30

times larger than the mineable oil sands area north of Fort McMurray ................. 1

Figure 2: Map of in situ oil sands projects included in this report .............................. 5

Figure 3: Industrial development within caribou ranges is largely responsible for the decline of woodland caribou herds in Alberta ........................................................ 7

Figure 4: Growing acidifying emissions from oil sands development may pose a risk to northern lakes ............................................................................................ 10

Figure 5: Water treatment facilities at Husky Tucker ................................................ 11

Figure 6: Simplified life cycle activities included or excluded in this analysis ........... 13

Figure 7: Cogeneration allocation methodology ....................................................... 15

Figure 8: Actual and forecast bitumen production volumes from in situ and mining sources in Alberta ................................................................................................. 17

Figure 9: In situ oil sands production by technology type, including water injection, cyclic steam stimulation, steam assisted gravity drainage and experimental technologies .......................................................................................................... 18

Figure 10: SAGD wellpads at Suncor Firebag ........................................................... 18

Figure 11: Cyclic steam stimulation .......................................................................... 19

Figure 12: Steam assisted gravity drainage ................................................................ 19

Figure 13: Seismic lines cross-cut the boreal forest near Fort McMurray .................. 20

Figure 14: Project land use intensity based on footprint area and bitumen production volumes over the total project lifetime ................................................................. 30

Figure 15: Conservation offsets can compensate for the residual, unavoidable harm to biodiversity caused by development projects .................................................... 32

Figure 16: The cumulative impacts of in situ oil sands projects need to be included in land use planning ............................................................................................. 35

Figure 17: NOx emissions per barrel of bitumen produced ...................................... 40

Figure 18: SO2 emissions per barrel of bitumen produced ....................................... 42

Figure 19: Total water consumption per barrel of bitumen produced ...................... 46

Figure 20: Freshwater consumption per barrel of bitumen produced ....................... 48

Figure 21: Liquid waste production per barrel of bitumen produced ....................... 50

Figure 22: Greenhouse gas emissions per barrel of bitumen produced ..................... 54

viii DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARD The Pembina Institute


List of TablesTable 1: List of projects included in the assessment .................................................... 3

Table 2: Summary of general environmental management scores per project ........... 21

Table 3: Summary of compliance records by in situ operator for 2007 .................... 27

Table 4: Summary of land scores per project ............................................................ 29

Table 5: Summary of air emission scores per project ................................................ 39

Table 6: Summary of water scores per project ........................................................... 45

Table 7: Summary of climate change scores per project ............................................ 53

Table 8: Summary of project scores .......................................................................... 57

Table 9: Best practice in situ development checklist ................................................. 65

Table 10: Summary of Canadian Natural Primrose/Wolf Lake’s 2007

environmental performance ................................................................................. 70

Table 11: Summary of Cenovus Christina Lake’s 2007 environmental performance 71

Table 12 Summary of Cenovus Foster Creek’s 2007 environmental performance .... 72

Table 13: Summary of Husky Tucker’s 2007 environmental performance ............... 73

Table 14: Summary of Imperial Oil Cold Lake’s 2007 environmental performance 74

Table 15: Summary of JACOS Hangingstone’s 2007 environmental performance .. 75

Table 16: Summary of Shell Peace River’s 2007 environmental performance ........... 76

Table 17: Summary of Suncor Firebag’s 2007 environmental performance .............. 77

Table 18: Summary of Suncor MacKay River’s 2007 environmental performance ... 78

The Pembina Institute DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARD ix


Development of deep oil sands deposits 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 environ-mental performance of in situ oil sandsoperations that were in operation in2007 (the most recent period for whichdata was publicly available). The oil

sands 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%).

s Forest fragmentation is one of the environmental impacts of in situ oil sands development.PHOTO: DAVID DODGE, THE PEMBINA INSTITUTE

Executive Summary

x DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARD The Pembina Institute

Key Findings1. CLEAR ROOM FOR IMPROVEMENTThe majority of in situ operators laggedin the following areas:

z Few projects have established absolutereduction targets for air emissions,water use and GHG emissions thatgo beyond government requirements.

z Few projects have invested inbiodiversity offsets to compensate forthe impacts associated with in situdevelopment.

z Only three companies currentlysupport regional biodiversitymonitoring.

z Only two companies have third-party accredited environmentalmanagement systems for theirprojects.

2. POOR DISCLOSURE OF ENVIRONMENTALPERFORMANCE DATA

The quality and quantity of project-specific environmental data makescomparing in situ projects a time-consuming enterprise. There is limitedpublicly available and accessibleenvironmental impact data to informdiscussion of in situ environmentalperformance.

The In Situ Oil Sands Report Card E X E C U T I V E S U M M A R Y

s 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.)

ProjectGeneral

EnvironmentalManagement

(out of 3)

Land(out of 5)

Air Emissions(out of 3)

Water(out of 4)

Climate Change

(out of 2)

Overall Score

Suncor Firebag 1.5 3 1.75 3 1 60%

Cenovus Foster Creek 2 2.75 2 2 1 57%

Imperial Oil Cold Lake 2.5 2* 1.25 2.5 0.5 55%

Suncor MacKay River 1.5 2.5 1.75 2.5 0.75 53%

AVERAGE 1.83 2.36 1.06 1.56 0.50 44%

Shell Peace River (demonstration) 3 3* 0 0 0 38%

Cenovus Christina Lake (pilot) 2 2 1.5 0 0.75 37%

Husky Tucker (start-up) 2 3 0 1 0 35%

JACOS Hangingstone (demonstration) 0.5 2* 0.5 2 0.5 34%

Canadian Natural Primrose/Wolf Lake 1.5 1 0.75 1 0 25%

3. IN SITU AND MINING PROJECTS BOTH HAVE SIGNIFICANT ENVIRONMENTAL IMPACTS

While 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 fragment-ation and upstream natural gas produc-tion associated with in situ operations.1

4. BEST PRACTICES ARE NOT WIDELY ADOPTED

The 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 ARE GENERALLY NOT CONSIDERED

This 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 the

regional environment is protected fromcumulative impacts.

Recommendations for 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 initia-tives, 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:

z Encourage companies to establishpublic reduction targets by providingsome benefit to companies that settargets and punishing laggardcompanies that do not demonstratecontinuous environmentalimprovement.

z Mandate compensatory offsets tomitigate the terrestrial impacts of insitu oil sands development, anddevelop conservation offset policies as recommended by the proposedwetland policy for Alberta2 andResponsible Actions: A Plan for Alberta’s Oil Sands.3

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xii DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARD The Pembina Institute


z Integrate mandatory financial supportfor the Alberta BiodiversityMonitoring Institute into existingand future approvals.

z Mandate third-party accreditation ofenvironmental management systemsfor in situ projects.

2. Make oil sands environmentalperformance data more comparable and accessible

Project-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 system that rewards innovation

In situ operators have very littleincentive to improve their environ-mental performance. Government mustconsider how harness the innovativecapacity of the oil sands industry toaddress environmental issues.

5. Halt new approvals until environmental management systems are complete

Complete a regional managementsystem to protect the ecological integrityof Alberta’s ecosystems from the cumul-ative impacts of oil sands developmentbefore approving new projects.

Recommendations for IndustryGovernment action must be supportedand matched by the oil sands industry.

1. Demonstrate leadershipz Establish project-specific absolute

reduction targets for water use, airemissions and greenhouse gasemissions that go beyond governmentrequirements.

z Invest in biodiversity offsetscommensurate with the terrestrialimpact of the in situ project.

z Financially support the AlbertaBiodiversity Monitoring Institute andintegrate its results into managementplanning.

z 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 developments have significantenvironmental impacts and there issignificant room for improvement acrossthe industry. Seriously engage stake-holders and publicly discuss solutions tothese issues.

4. Incorporate best practices and lead improvements

Adopt current best practices andcontinuously improve once bestpractices have been adopted.

5. Acknowledge cumulative impacts of in situ development

Take a leadership role in support ofestablishing regional environmentalthresholds and of completing land use planning.

The Pembina Institute DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARD 1


Introduction

People in Canada, in North America and around the world

are 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,

s 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 INSTITUTE

2 DRILLING DEEPER: THE IN SITU OIL SANDS REPORT CARD The Pembina Institute

The In Situ Oil Sands Report Card I N T R O D U C T I O N

Under-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:

The Impacts of In Situ Oil SandsDevelopment on Alberta’s BorealForest,5 the Pembina Institute and the 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.



Project ScopeThis report ranks thermal in situprojects that were in operation for all of 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 including in this survey, but only three responded

with 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 represent the full range of commercial in situtechnologies and producing regions.

t Table 1: List of projects included in the assessment

Lead Company Project Name 2007 Status 2007 AverageProduction (bbl/day) Technology

Canadian Natural(Canadian Natural Resources Limited)

Primrose/Wolf Lake Commercial 61,050 CSS

Cenovus (Cenovus Energy Incorporated)6

Christina Lake Pilot 5,295 SAGDFoster Creek Commercial 49,258 SAGD

Husky (Husky Energy Incorporated) Tucker Commercial

Start-up 1,672 SAGD

Imperial Oil(Imperial Oil Limited) Cold Lake Commercial 153,459 CSS

JACOS (Japan Canada Oil Sands Limited) Hangingstone Demonstration 7,069 SAGD

Shell (Royal Dutch Shell PLC) Peace River Demonstration 9,560 mix of

techniques 7

Suncor (Suncor Energy Incorporated)

Firebag Commercial 36,893 SAGD

MacKay River Commercial 21,248 SAGD



Table 1 contains a list of all the projectsincluded in the assessment. The twoCanadian Natural projects – Primroseand Wolf Lake – are grouped togetherin this survey because that is howCanadian Natural reports the data inpublic submissions and applications.

In addition to its research and advocacywork, the Pembina Institute providesconsulting services to industry,government, First Nations andenvironmental organizations. Since2006, Pembina Corporate Consultinghas completed work for Suncor EnergyLtd. and Shell Canada Ltd. Thisconsulting work has influenced neitherthe development nor the results of thissurvey; rather it helped to provide thePembina Institute with the appropriatetechnical knowledge to complete thiscomparative analysis.

Data CollectionThe Pembina Institute first gatheredinformation on all of the indicatorsfrom public data sources, primarily theAlberta Energy and ResourcesConservation Board (ERCB) in situ oilsands progress reports, the NationalPollutant Release Inventory (NPRI) andenvironmental impact assessments.

Disciplinary specialists in emissions,water, land management and industrialwaste at the Pembina Institute createdrepresentative questions addressingenvironmental performance andcommitments to continually minimizeenvironmental effects. Although thesurvey does not address all aspects ofenvironmental performance, thePembina Institute is confident that theindicators selected are representative ofthe environmental management

challenges facing in situ operators andcomprehensive enough to meaningfullyrank oil sands company commitmentsand environmental performance.

In June and July 2009 the PembinaInstitute provided each company with acompleted survey and a request forreview and comments. PembinaInstitute staff contacted each companyby telephone and by electronic mail tosolicit feedback on the accuracy of thedata presented. Husky, Cenovus andShell participated in the survey, reviewedthe information and provided additionalcontext and information to improve theanalysis. The Pembina Instituteincorporated their comments into theanalysis and informed each of theparticipating companies about how theirinformation was incorporated. CanadianNatural, Imperial Oil, JACOS andSuncor responded but declined toparticipate in the survey.

Performance CriteriaThe Pembina Institute selected criteriato use by considering the following:

z Environmental issues and suitableperformance criteria: Each criterionmust first represent a potentialenvironmental issue of concern in the oil sands region that in situdevelopments are contributing to. For example, the Under-Mining theEnvironment report on oil sandsmining operations included volatileorganic compound emissions becausethese emissions have potentialenvironmental impacts and thetailings ponds at mining operationsemit volatile organic compounds. In situ operations, in contrast,



� Figure 2: Map of in situ oil sands projects included in this report.MAP: ROLAND LINES, THE PEMBINA INSTITUTE

CenovusChristina Lake

Cenovus Foster Creek

JACOS Hangingstone

Suncor MacKay River

Suncor Firebag

Imperial OilCold Lake

Canadian Natural Wolf Lake

Canadian Natural Primrose

Shell Peace River

HuskyTucker

Edmonton

Peace River

Fort McMurray

Athabasca

ColdLake

North Sask

atchewan R

iver

Athabasca River

Beaver River

Peac

e Ri

ver

Lesser Slave Lake

0 km 50 100 150 200

Approved Projects

Non-producing Projects

Producing Projects

Oil Sands Area

Surface Mineable Area

Oil Sands Lease Agreements

Projects Surveyed for the In Situ Oil Sands Report CardLEGEND

Calgary

Fort McMurray

Edmonton

PROJECT DATA: ALBERTA ENERGY, DECEMBER 2008



emit far fewer volatile organic com-pounds, so these emissions were notincluded in the performance survey.

z Global Reporting Initiative (GRI):Many companies are familiar withGRI indicators8 because theseindicators are often used in theirsustainability reports. Whereverpossible, the Pembina Institute usedGRI indicators to increase thecomparability of this report withcurrent corporate social responsibilityreporting practices and to reduce thereporting burden of the companiesproviding information for this report.

z Public data: The Pembina Instituteonly included indicators that couldbe determined using public datasources because not all companieshad the time or interest inparticipating in the survey.

z External validation: Pembina Institutestaff spoke with several industry andnon-governmental organizations toensure the indicators included in thisreport were of value and accuratelyand fairly compared projects. Eachcompany being assessed was invitedto participate in the survey process toensure the purpose was understoodand the best available data could beincluded.

The questions themselves can be splitinto two main categories: quantitativequestions, which relate to criteria with a numerical value, such as air emissionintensity, and qualitative questions,which relate to environmentalmanagement and public policy actions.Quantitative data is based on publiclyavailable 2007 data and some inform-ation from environmental impact

assessments. This assessment uses 2007data because that is the most recent year where data exists for all projectsconsidered in this assessment. Wherepossible we have indicated whether aspecific project’s performance has likelyincreased or decreased between 2007and present.

The survey questions are grouped intofive broadly recognized areas ofenvironmental performance andmanagement: general environmentalmanagement, land, air emissions, waterand climate change.

General Environmental Management

This section concerns principles ofenvironmental management that arevalid for any natural resource–basedcompany or project. These principlesinclude the development of an effectiveenvironmental policy, a strong record ofcompliance with environmentalregulations, third-party validation ofenvironmental management systems andtransparent public reporting ofenvironmental data associated with aproject.

What follows are the specific surveyquestions, the context for including thequestions in the survey and theequivalent GRI indicators.

1. Does your company have an environmentalpolicy that commits to continuousimprovement in environmental performance?

Context: A company’s publishedenvironmental policy is the publicexpression of its environmentalmanagement system and values.



The Pembina Institute supportscompanies that articulate a commitmentto continuous environmentalimprovement because companies mustnow be held accountable. ISO 14001also requires that companies include a commitment to continuousimprovement in their policies.9

GRI Indicator: None applicable

2. Does your oil sands operation have an environmental management system thathas been accredited by an independent thirdparty, such as ISO 14001 or equivalent?

Context: ISO 14001 is an internationallyrecognized standard for environmentalmanagement systems. It has clearrequirements for establishing anenvironmental policy, determiningenvironmental risks and setting goals toreduce environmental impacts. Third-party validation of an environmentalmanagement system provides externalevidence of the rigour of theenvironmental management system.Although ISO 14001 does not provide standards for environmentalperformance, it does provide a globallyrecognized framework for developing anenvironmental management system.


3. Do you publicly report project-specificenvironmental data for your project?

Context: Public reporting allowsstakeholders to assess and compare theenvironmental performance of in situoperators. Industrial operators thatprovide detailed data on their operationsencourage trust and assist in creating atransparent system from whichenvironmental issues and solutions canbe identified more quickly. In the contextof this report card, public reporting isdefined as project-specific environmentalparameters that companies make directlyavailable to the public through companywebsites, annual sustainability reportsand government reports or websites.


4. Please summarize all ambient air exceedancesand all environmental enforcement actions(including warning letters, prosecutions, fines,etc.) in 2007 for this oil sands operation.

Context: Environmental regulations existto ensure industrial operations do notunduly harm the natural environment.These regulations grant the governmentthe authority to punish companieswhose projects are exceeding the ruleslaid out in the regulation and mayultimately be causing harm to thenatural environment. Companies withpoor environmental compliance recordsare therefore more likely to causeenvironmental damages.

GRI Indicator: EN28. Monetary value ofsignificant fines and total number ofnon-monetary sanctions for non-compliance with environmental lawsand regulations.

s

Figure 3:Industrial

developmentwithin caribou

ranges islargely

responsible forthe decline of

woodlandcaribou herds

in Alberta.PHOTO: WAYNE LYNCH



Land

In situ development results in significantfragmentation and disturbance of borealforest ecosystems. This section containsindicators relating to disturbancefootprint, the monitoring of biodiversityimpacts, strategies to offset terrestrialimpacts and company leadership insupporting the establishment ofprotected areas in the boreal forest.

5. What is the total expected land disturbanceincluding exploration and production footprints(m2) for your oil sands operation?

Context: The majority of oil sands in situdevelopment is or is planned to occur inrelatively intact boreal forest. Anydevelopment in this environment resultsin an increased cumulative impact onspecies and ecological systems.Determining the exact impact of eachfacility requires specific knowledge ofwhere it is being built and thetechniques used for forest clearing andconstruction. However, because anyclearing will have some impact onwildlife, the total project footprint wasused for the calculations.

GRI Indicator: EN11. Location and size ofland owned, leased, managed in, or adja-cent to, protected areas and areas of highbiodiversity value outside protected areas.

6. Please report and provide documentation oftotal hectares of biodiversity/conservationoffsets established to compensate forterrestrial impacts of your oil sands project.

Context: In situ facilities have a residualimpact on biodiversity regardless of acompany’s on-site mitigation measures.Biodiversity and conservation offsets offera method to compensate for the residual,

unavoidable harm to biodiversity causedby development projects, thereby aspiringto no net loss in biodiversity.10

Biodiversity offsets attempt to mitigateecosystem disturbance and habitat loss byrestoring or conserving substitute forestareas so that no net loss of critical habitatis maintained in perpetuity. Conservationoffsets compensate for developmentimpacts as part of a complementarystrategy involving significant newconservation and protected areas andenhancing mitigation practices andreclamation. The Government of Albertais exploring the establishment ofconservation offset policies to mitigateterrestrial impacts of oil sands develop-ment.11 The Pembina Institute considersthe voluntary establishment ofconservation offsets an importantindicator of environmental performancein the absence of regulated offsetprograms.

GRI Indicator: EN13. Habitats protectedor restored.

7. Is your project lease area located in woodlandcaribou habitat as defined by AlbertaSustainable Resource Development?

Context: Woodland caribou are athreatened species in Canada andAlberta. Environment Canada hasconcluded that all woodland caribouherds in Alberta are considered to havenon-self-sustaining populations.12

Industrial development within caribouranges is largely responsible for thesedeclines.13 It is recommended thathabitat restoration is necessary if thesepopulations are to be maintained, yetnew in situ developments are proposedin the ranges of these declining herds. In the absence of a land use plan thatidentifies how woodland caribou habitat



is to be protected, any in situ oil sandsdevelopment, regardless of mitigationmeasures, contributes to the decline ofthis threatened species.


8. Did your company support CumulativeEnvironmental Management Associationrecommendations for conservation planning,specifically the recommendation topermanently protect 20-40% of the RegionalMunicipality of Wood Buffalo from industrialdevelopment?

Context: The Cumulative EnvironmentalManagement Association (CEMA) is amulti-stakeholder body charged withassessing cumulative impacts of develop-ment and making recommendations toimprove environmental management innortheastern Alberta.14 In 2008, CEMArecommended that between 20% and40% of northeastern Alberta should bepermanently protected from industrialdevelopment through the establishmentof legally designated conservation areas.15

This indicator reflects which companieshave been constructive participants insupporting the establishment of conserv-ation areas free of industrial activity.


9. Does your company provide financial supportto the Alberta Biodiversity Monitoring Institute(ABMI) in order to provide meaningful, long-term information about changes in biodiversityin the oil sands region? Have you incorporatedABMI biodiversity monitoring protocols intoyour project-specific reporting requirements? If so, please describe this support.

Context: Effective monitoring forchanges in wildlife species is an essentialcomponent of oil sands management.An independent science advisory com-mittee found the ABMI16 to be “acomprehensive world-class program that

Albertans can rely on for high qualitymonitoring and reporting on the state ofbiodiversity in Alberta.”17 It is capable ofproviding statistically rigorousinformation about regional-level changesin biodiversity and has protocols that canbe adapted to determine site-specificchanges at the level of a single oil sandsproject. Without a credible, regionalprogram such as the ABMI, there isinsufficient information to adequatelyassess changes to biodiversity in theregion. The ABMI is supported by bothgovernment and voluntary industryfunding but does not currently havesustainable long-term funding. Financialsupport for the ABMI is a key indicatorof an oil sands companies’ commitmentto meaningful biodiversity monitoringuntil a comprehensive regulatedapproach to biodiversity monitoring isdeveloped. (The Pembina Institute sitson the ABMI board as the representativefor Alberta’s environmental community.)


Air Emissions

Oil sands projects are major emitters ofmany chemical pollutants. Air emissionsof particular importance generated at insitu operations include nitrogen oxides(NOx) and sulphur dioxide (SO2). Both emission types contribute to smog,have potential human health impactsand are contributors to acid rain. Thissection reports on project emission levelsand voluntary company targets toreduce air pollution.

One of the goals of this survey was toquantify NOx and SO2 emissions foreach project in order to highlight best



practices. For this analysis to bemeaningful the data collected for eachproject had to be comparable. To becomparable, the Pembina Instituteincorporated life cycle emissions andallocated cogeneration emissions for airemissions. A more detailed explanationof the methodology is available in LifeCycle Approach and Cogenerationsections.

NOx are formed during the combustionof natural gas for heat and electricity atin situ sites. In situ operators usetechnologies, such as low NOx boilers,to reduce NOx emissions. Some of thelowest NOx intensities result fromreduced natural gas consumption.

Despite these technologies, in situ oilsands operations still result in the releaseof 9,752 tonnes NOx of each year.18

SO2 is similarly formed during thecombustion of natural gas and producedgas for heat and electricity used on-siteat in situ facilities. Upstream natural gasproduction also produces relativelysignificant quantities of SO2 during thenatural processing phase. Operators canreduce their SO2 emissions by reducingthe quantity of natural gas combustedor by installing technologies, such assulphur recovery units. Despite thesetechnologies, in situ oil sands operationsstill result in the release of 9,043 tonnesSO2 of each year.19

s Figure 4: Growing acidifying emissions from oil sands development may pose a risk to northern lakes.PHOTO: DAVID DODGE, THE PEMBINA INSTITUTE



10. What are your overall project-specific nitrogenoxides (NOx) emissions in grams (g) perbarrel (bbl)?

Context: NOx emissions contribute tothe formation of ground level ozone andacid rain. Ground level ozone canirritate the respiratory system. Currentacid deposition in Saskatchewan mayexceed the buffering capacity of lakesand soils in regions close to the oilsands.20 NOx are emitted in largequantities from in situ projects and haveknown human health impacts andimpacts on the environment.21 For thepurpose of comparing projects, the GRIindicator was converted to a per barrelemissions intensity measure.

GRI Indicator: EN20. NOx and SO2 andother significant air emissions by typeand weight.

11. What is your 2007 average SO2 emissionintensity in grams (g) per barrel (bbl)?

Context: Once released into theatmosphere, SO2 contributes to theformation of smog and haze. In highconcentrations, SO2 emissions can havea direct impact on human health,causing respiratory illness andaggravating pre-existingcardiovascular disease.22

SO2 is also the majorcomponent in theproduction of acid rain. As with NOx emissions, the GRI indicator wasconverted to a per barrelemissions intensity measurefor the purpose ofcomparing projects.

GRI Indicator: EN20. NOx and SO2 and othersignificant air emissions by type and weight.

12. Does your company have publicly reportedtargets to reduce or offset NOx or SO2 beyondgovernment regulations? If so, what are they?

Context: NOx and SO2 emissions bothcontribute to acid rain and affecthuman health.23 The Pembina Institutebelieves that oil sands projects shouldreduce their NOx and SO2 emissionswhenever possible, given theircontribution to acid deposition and thepotential for human health impacts inand around oil sands facilities. ThePembina Institute encourages companiesto take a leadership role and commit tovoluntary reduction targets because thePembina Institute believes companiesshould be minimizing impacts wherepossible regardless of regulated limits.Companies that are able to achieveemission reductions above and beyondregulated limits encourage othercompanies to achieve similar results.This indicator is not included under theGRI guideline, but setting internaltargets is considered to be an essentialcomponent of an environmentalmanagement plan.24


s Figure 5: Water treatment facilities at Husky Tucker. PHOTO: COURTESY OF HUSKY ENERGY



Water

Because of the cumulative scale of oilsands projects, in situ operationsconsume a considerable amount ofwater. This make-up water volume is inaddition to water that is recycledthrough the processes. In situ facilitiesuse either surface water or groundwater(fresh or saline), or any combination ofthese sources. In situ operators alsoproduce waste products that are typicallyinjected deep underground or shippedoff-site to a waste treatment facility.25

This section compares projects onabsolute water use, freshwater use,liquid waste production and publictargets to reduce water use.

13. What is your project’s 2007 average waterconsumption (brackish and fresh water) perbarrel of bitumen produced?

Context: Withdrawing any type of water,even saline water, can have direct orindirect impacts on surrounding wetlands,lakes, aquifers and other water systems.However, groundwater monitoring andcurrent data are insufficient to accur-ately judge potential impacts and safewithdrawal limits. The PembinaInstitute believes that in the absence ofsufficient data, operators with lowerconsumptive water use intensity pose alesser risk to groundwater resources. TheGRI indicator was converted to a perbarrel intensity measure for the purposeof comparing projects.

GRI Indicator: EN8. Identify the totalvolume of water withdrawn from anywater source that was either withdrawndirectly by the reporting organization orthrough intermediaries such as waterutilities.

14. What is the total volume of freshwater use in 2007? 26

Context: Freshwater resources, whichinclude rivers, streams, lakes and freshgroundwater, are defined as water withtotal dissolved solids (including sodiumcontent) below 4,000 ppm.27 With thelarge water demands required by in situoperations, it is essential that oil sandsprojects minimize their use of freshwaterresources by making use of saline waterresources when available.


15. What is the average volume (bbl) of liquidwaste produced per barrel (bbl) of bitumen for 2007?

Context: When in situ operators re-injectliquid waste products deep under-ground, there is a risk that the wastefluids will flow underground andcontaminate other groundwater sources.To avoid this problem, operators limitthe re-injection pressure, but theincreased volumes of undergroundliquids risk future flow.28 Some in situfacilities also ship solid and liquid wasteoff-site to a waste treatment facility. TheGRI indicator was converted to a perbarrel intensity measure for the purposeof comparing projects.

GRI Indicator: EN22. Total weight ofwaste by type and disposal method.

16. Does your company have publicly reportedtargets to reduce water intensity andconsumption in your operations beyondgovernment regulations? If so, what are your targets?

Context: Withdrawing any type of water,even saline water, can have direct orindirect impacts on surrounding watersystems. Public targets ensure companiesquantify their commitment to



continuous improvement, help spurtechnological innovation and applicationand lead to real reductions in water use.The ISO 14001 standard recognizesinternal water reduction targets as a keycomponent of a complete environmentalmanagement system.29


Climate Change

Extracting bitumen from the oil sands isvery energy intensive. As a result, in situoperations are major emitters of GHGs.The data used for this section of thereport are derived in the same mannerdiscussed in the air emissions section.

17. What is your 2007 average greenhouse gasemission intensity in kilograms (kg) per barrel(bbl) of bitumen?

Context: Over 44% of the increase inCanada’s GHG emissions from 2006 to2020 is projected to be a direct result ofnew oil sands development.30 If Canada

is to achieve the necessary deepreductions in overall GHG emissions,emissions must be reduced in absoluteterms. However, GHG intensity is auseful way to compare the efficiency of oil sands operations. It is importantto note that the emissions presentedhere are from the production ofbitumen only.

GRI Indicator: EN16. Identify directemissions of GHGs from all sourcesowned or controlled by the reportingorganization.

18. Does your company have publicly reportedabsolute greenhouse gas emission reductiontargets beyond government regulations? If so, what are they?

Context: A public opinion pollconducted by Probe Research in 2007showed that 92% of Albertans polledfelt that oil sands companies shouldreduce greenhouse emissions at all theirfacilities. The same poll showed that70% of Albertans felt that absolutereductions in GHGs were appropriate,compared to the 20% of Albertanspolled that preferred targets thatreduced only the intensity of GHGemissions per barrel.31 Voluntary targetsare recognized by ISO 14001 as anecessary component of an environ-mental management system.

GRI Indicator: EN18. Reportquantitatively the extent GHGemissions reductions achieved duringthe reporting period as a direct result ofthe initiative(s) in tonnes of CO2equivalent.

Life Cycle ApproachEach in situ oil sands project is slightlydifferent, but all projects require somesimilar types of equipment and energy

s Figure 6: Simplified life cycle activities included orexcluded in this analysis.



sources. To ensure a fair comparison ofprojects, this analysis uses a life cycleapproach. Each project was comparedon a per barrel of bitumen basis.Upgrading was not included in theassessment. Figure 6 identifies activitiesthat were included or excluded in theanalysis.

The main purpose of using a life cycleperspective is to ensure that projects thatreduce on-site emissions are nottransferring those impacts to otherlocations. For example, an in situproject with a cogeneration facility thatproduces its own electricity will likelyhave higher on-site emissions than onewithout. The project without acogeneration facility still requireselectricity, however, and the emissionsfrom that electricity generation shouldbe attributed to the project’s bitumenproduction. Increases or decreases in off-site emissions are important to quantifyto provide the fairest assessment of lifecycle environmental impact.

Because applicable life cycle data doesnot exist for all indicators, only thosewith Alberta-specific life cycle data areincluded. Life cycle data is used forGHG, NOx and SO2 emissions. Thereare also water and land impactsassociated with natural gas production,but quality data on these indicators arenot readily available.

CogenerationThis survey includes air emissions (NOx and SO2) and GHG emissionsassociated with off-site electricity andnatural gas production. For facilities that

have a cogeneration site, an on-sitefacility that produces both electricityand heat, additional methodologies wereneeded to ensure that those facilitieswere not unfairly disadvantaged. Whilecogeneration facilities produce heat,which is provided exclusively to the site,only a portion of the electricity theyproduce is used by the in situ operation.The remainder of the producedelectrical power is redistributed to theelectrical grid. It was therefore necessaryto ensure that emissions associated withthe portion of electricity redistributed to the grid were not allocated to theproject.

Allocating cogeneration emissions was difficult due to a lack of publiclyavailable data, but in general terms, a cogeneration allocation ratio wascalculated and then applied to the total emissions value to determine what portion of the emissions should be allocated to the site.

Figure 7 depicts the cogenerationallocation methodology. The allocationratio is simply the portion of producedheat and electricity used by the in situfacility (E1 and H1 in the diagram)divided by the total heat and electricityproduced by the cogeneration facility(E1, E2 and H1 in the diagram). In thisway, in situ operations that incorporatecogeneration facilities are not penalizedfor the air emissions associated with theproduction of electricity they do notuse. In other words, the in situ operatorsare only responsible for the air emissionsassociated with the heat and electricitythey use to produce bitumen at the site.



ScoringFor each environmental indicator weidentify leaders and laggards and scorethe projects accordingly. For yes/noquestions, a project receives either 1 or 0points. In limited circumstances weprovide 0.5 points for projects thatpartially achieve a yes/no indicator. Forexample, although all projects publiclyreport project-specific environmentalindicators, this information is oftendifficult to find and inconsistentbetween projects. For this reason, mostprojects received only a 0.5 for publicreporting instead of 1.

The yes/no questions were designed todetermine which projects andcompanies demonstrate a progressiveapproach to environmental managementby participating in exemplarymanagement practices, such asindependent performance verification,mitigation and monitoring efforts, andvoluntary performance targets in theabsence of clear regulatory requirements.

An operation that has adopted anumber of these management practicesis clearly making an effort to implementsystems to better manage itsenvironmental impacts.

The remaining questions consider theenvironmental impact associated withthe production of a barrel of bitumenfrom each operation, in terms of wateruse, air emissions, land impacts andGHG emissions.

For quantitative indicators, such asGHG emissions per barrel of bitumen,projects were ranked in quartiles fromhighest to lowest performer. Projectswithin 25% of the top performer weregranted full points for that question.Projects performing within 25–50% of the top performer were granted 0.5points, projects performing within 50–75% of the top performer wereawarded 0.25 points and projects in thebottom quartile were awarded zeropoints. Using this relative scale clearlydistinguishes the leaders and laggardsamong projects, but it does not indicatewhether the best performer is truly aleader in an absolute sense. For example,the project with the lowest GHGintensity is awarded full marks underthis methodology, but this does notmean that project should not beachieving better performance; it issimply the best relative to its peers.

We aggregated the scores within the fivecategories to facilitate comparisonsamong projects and among companies.We calculated an overall project scorefor each project as the percentage of thepossible total for all questions. Where a project was scored as not applicable(n/a) on any question, that question was not included in the calculation ofoverall score.

s

Figure 7:Cogeneration

allocationmethodology.



LimitationsWe believe that this report representsthe most comprehensive and rigorouspublicly available assessment ofcomparative environmental performanceof in situ oil sands operations. Thisreport focuses on current environmentalperformance of in situ oil sandsoperations only. It does not considercorporate governance issues, the healthand safety of employees, or theadequacy of consultation andaccommodation of aboriginal interestsby oil sands companies. For informationabout other indicators, readers areencouraged to examine sources such as Lines in the Sands: Oil Sands SectorBenchmarking by Northwest and EthicalInvestments.32 That survey is based on abroad assessment of potential risks andcompany mitigation strategies.

The Pembina Institute attempted tocompare in situ projects on as manyenvironmental issues as possible.However, data are not available for someissues and for others the environmentalissue is not fully addressed. For example,when high-temperature and high-pressure steam is injected underground,it creates a region where undergroundtemperatures are significantly higherthan normal conditions. This region,called a thermal plume, can slowlymigrate underground with time.

The concern with this phenomenon isthat naturally occurring minerals, suchas arsenic, become highly concentratedin thermal plumes and, throughmigration, risk contaminating ground-water systems.33 Another example iscumulative impacts. This report focuses on comparing individual in situ operations, but the combinedexistence of all in situ projectscontributes to cumulative impacts that must be addressed differently than project-specific impacts.

This report should be considered asnap-shot of project-specific environ-mental performance, based on data thatwas available during our analysis period.Companies update their performanceregularly. For example, most companieshave subsequently updated their in situperformance reports for 2008.

The Pembina Institute attempted toappropriately credit facilities that haveincorporated cogeneration. However, to do this correctly requires detailednatural gas and electricity generationand use values. This information is notavailable in the public domain. ThePembina Institute estimated emissionsbased on available information, andthese calculations should only beconsidered as estimates. Our approach is discussed in detail in the Cogener-ation section.



Alberta’s Oil Sands

Oil sands are naturally occurring mixtures of sand or clay, water

and tar-like bitumen. In an oilsands deposit, each grain of sand iscovered by a thin layer of water andthen by a layer of the highly viscousbitumen.34 Bitumen is a heavy form ofcrude oil.

The Alberta oil sands contain anestimated 175 billion barrels of crudebitumen that can be recovered usingcurrent technology.35 They are primarilyfound in three deposits – Athabasca,Cold Lake and Peace River36 – andunderlie approximately 140,000 km2

(20%) of Alberta, which is an areaabout the size of Florida.37 As of June2009, the Alberta government hadgranted 84,000 km2 of oil sandsextraction leases,38 which accounts foralmost 60% of the total oil sands area.

Unlike conventional crude oil, bitumen istoo thick and viscous to flow naturally orto be pumped out of the ground unless itis heated or diluted with a solvent.Before it can be refined into useablepetroleum products, bitumen must beupgraded into synthetic crude oil.39

The two primary extraction techniquesfor oil sands are mining and in situ(Latin for “in place”). Mining, which iscurrently the dominant form of oilsands extraction, accounted for 55% ofoil sands production in Alberta in2008.40 However, as over 80% ofAlberta’s oil sands resource is too deepfor surface mining, in situ extractionwill become increasingly important in

coming decades. Oil sands suitable forin situ extraction underlie about135,000 km2 – nearly 30 times the4,800 km2 of oil sands that is potentiallysurface mineable. Figure 8 displays theactual and forecast contribution ofbitumen production from mining andin situ sources.

In Situ Production TechnologiesOil sand deposits that are more than100 m below the surface are generallyrecovered using in situ techniques. Insitu extraction involves drilling severalwells into the deposit and then heatingor diluting the oil sands underground sothe bitumen can flow to a well and bepumped to the surface.42 Most in situ oilsands deposits are more than 400 mbelow the surface.43

About In Situ Production

s Figure 8: Actual and forecast bitumenproduction volumes from in situ and miningsources in Alberta.

SOURCE: ERCB 41


The In Situ Oil Sands Report Card I N S I T U P R O D U C T I O N

The two main types of thermal in situtechnology are steam assisted gravitydrainage (SAGD) and cyclic steamstimulation (CSS). Bitumen is alsoproduced using water injection, but thatproduction technique is not included inthis report because of the greater paceand scale of thermal in situ developmentand its known environmental intensity.Figure 9 shows historical in situbitumen production by technology type.

CYCLIC STEAM STIMULATION (CSS)The CSS process requires a caprock andoverburden of more than 300–400 m towithstand the high pressure created bythe steam.45 CSS has been used in theCold Lake and Peace River areas formore than 20 years.46

In the CSS process, high-pressure steamis injected into the bitumen-bearingformation through a combination ofvertical and horizontal wells, as can be

seen in Figure 11. After a period ofsoaking, the warmed bitumen flowstoward the well bore and is pumped tothe surface through the same well borethat injected the steam. Then the wholeprocess starts again, with the “huff andpuff” cycle continuing until oil recoveryis no longer economical.47 The recovered

bitumen is diluted with condensate(pentanes and heavier liquid hydro-carbons obtained from natural gasproduction) and shipped by pipeline.

The steam condenses in the formation,and most of it will be pumped to thesurface with the fluidized bitumen. In most situations this produced wateris de-oiled and treated so it can berecycled to generate steam for the nextinjection cycle. Additional water isneeded to replace water lost in theformation and treatment process.

STEAM ASSISTED GRAVITY DRAINAGE(SAGD)The government-led Alberta Oil SandsTechnology and Research Authority andthe oil sands industry developed theSAGD process after more than a decadeof research.49 SAGD is used to extract

s Figure 9: In situ oil sands production bytechnology type, including water injection,cyclic steam stimulation, steam assistedgravity drainage and experimentaltechnologies. SOURCE: ERCB 44

s

Figure 10.SAGD wellpadsat SuncorFirebag. PHOTO: SUNCOR ENERGY

bitumen in areas where mining is notpossible but where the bitumen is notdeep enough for high-pressure CSStechniques to work.50 In the SAGDprocess, steam is continuously injectedunderground through one set of pipesand the heated, fluidized bitumen andwater (from the condensed steam) arecollected and pumped to the surfacethrough a lower, parallel set of pipes.The bitumen is recovered and in mostcases the produced water is de-oiled andtreated so that it can be reused. Severalwells are drilled from a single well pad,and a SAGD project can have manypads over an extensive areas.

EMERGING IN SITU TECHNOLOGIESEntrepreneurs are researching andtesting a range of in situ technologies,such as toe-to-heel air injection (THAI),vapour extraction and electric induction.While proponents claim thesetechnologies can economically producebitumen with fewer environmentalimpacts, none has yet beendemonstrated at a commercial scale.The analysis in this report includes onlyexisting commercial technologies.

MiningAlthough oil sands mining is not a focusof this report, a brief description ofmining operations is warranted becausethis report compares the environmentalimpacts of a typical oil sands mine with average in situ environmentalperformance.

In mining operations, bitumen-laden oil sands are mined using trucks andshovels. The trucks transport the oilsands to a preparation plant, where theoil sands are crushed and mixed withwater before being transported to thebitumen extraction plant. At thebitumen extraction plant the bitumen is separated from the water and sand. The bitumen is then sent to beupgraded into synthetic crude oil. The waste material, called tailings, is sent for further processing beforebeing disposed of in tailings ponds,which in 2009 covered 130 km2 andheld 720 billion litres of tailings waste.

The In Situ Oil Sands Report Card I N S I T U P R O D U C T I O N

s

Figure 11:Cyclic steamstimulation.

SOURCE:IMPERIAL OIL 48

s

Figure 12:Steam assistedgravitydrainage.ILLUSTRATION: J&WCOMMUNICATIONS, THE PEMBINA INSTITUTE

The Pembina Institute and World Wildlife FundCanada ranked environmental performance of10 proposed and operating oil sands mines inthe 2008 report Under-Mining the Environ-ment: The Oil Sands Report Card. It is available for download atwww.oilsandswatch.org/pub/1571.




This section provides the results of the survey per issue area for all of the in situ projects included

in the assessment. Scores are providedon a per indicator basis, on a 0 to 1scale. The environmental indicators are organized into five generalcategories: general environmentalmanagement, land, air emissions, water and climate change.

For each indicator the in situ projectsare divided into leaders, middle and

laggards. For yes/no questions, projectsthat receive a 1 are considered leadersand those with a 0 are laggards. In somecircumstances a project will receive a 0.5 and be placed in the middlecategory. For questions that are scoredon a relative scale, such as GHGintensity, projects that are better thanaverage are considered leaders, thoseclose to the average are middle andthose worse than the average laggards.

s Figure 13: Seismic lines cross-cut the boreal forest near Fort McMurray.

Survey Results

G


Survey ResultsThis category assesses the followingindicators of a sound approach to general environmental

management:

1. development of an environmentalpolicy that commits to continuousenvironmental improvement

2. validation of the environmentalmanagement system by a third party

3. transparent public reporting ofenvironmental data associated withthe project

4. strong compliance withenvironmental regulations

Project scores for this category aresummarized in Table 2. Question 4(regulatory compliance) was not scored.

eneral Environmental Management G

t Table 2: Summary of general environmental management scores per project.

Project ContinuousImprovement

Third-PartyValidation

Public DataReporting

Total Score

Shell Peace River (demonstration) 1 1 1 3

Imperial Oil Cold Lake 1 1 0.5 2.5

Cenovus Christina Lake (pilot) 1 0 1 2

Cenovus Foster Creek 1 0 1 2

Husky Tucker (start-up) 1 0 1 2

Canadian Natural Primrose/Wolf Lake 1 0 0.5 1.5

Suncor Firebag 1 0 0.5 1.5

Suncor MacKay River 1 0 0.5 1.5

JACOS Hangingstone (demonstration) 0 0 0.5 0.5

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The In Situ Oil Sands Report Card S U R V E Y R E S U L T S

CONTEXTA company’s published environmentalpolicy is the public expression of itsenvironmental management system andvalues. The Pembina Institute supportscompanies that articulate a commitmentto continuous environmentalimprovement because companies mustnow be held accountable. ISO 14001also requires that companies include a commitment to continuousimprovement in their policies.52

J LEADERS

Canadian NaturalPrimrose/Wolf Lake, CenovusChristina Lake, CenovusFoster Creek, Husky Tucker,Imperial Oil Cold Lake, ShellPeace River, Suncor Firebag,Suncor MacKay River All the in situ operators above havecomprehensive environmental policiesthat commit to continuousenvironmental performanceimprovement.

F MIDDLE

None

D LAGGARDS

JACOS HangingstoneJACOS is the only company that doesnot appear to have an environmentalpolicy that makes a commitment tocontinuous environmental improvement.

1 CONTINUOUS IMPROVEMENTDoes your company have an environmentalpolicy that commits to continuous improvementin environmental performance?




CONTEXTISO 14001 is an internationallyrecognized standard for environmentalmanagement systems. It has clearrequirements for establishing anenvironmental policy, determiningenvironmental risks and setting goals toreduce environmental impacts. Third-party validation of an environmentalmanagement system provides externalevidence of the rigour of theenvironmental management system.Although ISO 14001 does not providestandards for environmentalperformance, it does provide a globallyrecognized framework for developing anenvironmental management system.

J LEADERS

Imperial Oil Cold Lake, Shell Peace River Imperial Oil Cold Lake has anoperations integrity management systemthat has been registered by a third partyas meeting the intent and requirementsof ISO 14001. Shell Peace River is ISO14001 registered.

F MIDDLE

None D L

D LAGGARDS

Canadian NaturalPrimrose/Wolf Lake, Cenovus Christina Lake,Cenovus Foster Creek, HuskyTucker, JACOS Hangingstone,Suncor Firebag, SuncorMacKay RiverNone of these projects providedevidence of an independently accreditedenvironmental management system.

D LAGGARDS

2 THIRD-PARTY VALIDATIONDoes your oil sands operation have anenvironmental management system that hasbeen accredited by an independent third party,such as ISO 14001 or equivalent?


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CONTEXTPublic reporting allows stakeholders toassess and compare the environmentalperformance of in situ operators.Industrial operators that providedetailed data on their operationsencourage trust and assist in creating atransparent system from whichenvironmental issues and solutions canbe identified more quickly. In thecontext of this report card, publicreporting is defined as project-specificenvironmental parameters thatcompanies make directly available to thepublic through company websites,annual sustainability reports andgovernment reports or websites.

J LEADERS

Cenovus Christina Lake,Cenovus Foster Creek, HuskyTucker, Shell Peace River Cenovus, Husky and Shell allparticipated in the survey for this reportand provided clarifications to publicdata the Pembina Institute hadcollected. The assistance of Cenovus,Husky and Shell staff reduced the effortrequired to analyze the public data andimproved the accuracy of the finalconclusions. For several other projects,the Pembina Institute had to estimatevalues based on publicly availableinformation.

3 PUBLIC DATA REPORTINGDo you publicly report project-specificenvironmental data for your project?

s The Husky Tucker project (shown), along with the Cenovus and Shell projects, participated in the survey for this report. PHOTO: COURTESY OF HUSKY ENERGY




3 PUBLIC DATA REPORTING

F MIDDLE

Canadian NaturalPrimrose/Wolf Lake, Imperial Oil Cold Lake,JACOS Hangingstone, Suncor Firebag, SuncorMacKay River All in situ oil sands operators provideannual performance updates to theERCB. These reports includeoperational data, such as sulphuremissions, water consumption,wastewater production and bitumenproduction. Some companies producesustainability reports that summarizeenvironmental impacts on a project-by-project basis, but many companiesaggregate their environmentalperformance data into other operations.For example, Suncor reports someindicators for the Firebag facilityindependently, but reports otherindicators only for Suncor’s facility as awhole, which includes mining,upgrading and in situ operations. In situoperators are required to report annualGHG and air emissions to governmentagencies, such as Environment Canada.

The Pembina Institute found it difficultto compare in situ projects because thein situ operators provided data indifferent formats and used differentmethodologies to generate the data. Forexample, companies used different startand end dates for data reportingperiods. In addition, while companiespublicly report much of their perform-

ance data, no company reported all ofthe data needed for this report. In somecases, data crucial to a comparison ofoperational performance was unavailableand information provided in projectapplications and environmental impactassessments was used to fill the gaps.Project applications often do notrepresent actual performance.

D LAGGARDS

None

s Lack of consistency in reporting between oilsands operators and a shortage of comparativeinformation provided by Government makes itchallenging to compare the environmentalperformance of oil sands projects.

PHOTO: DAVID DODGE, THE PEMBINA INSTITUTE


CONTEXTEnvironmental regulations exist toensure industrial operations do notunduly harm the natural environment.These regulations grant the governmentthe authority to punish companieswhose projects are exceeding the ruleslaid out in the regulation and mayultimately be causing harm to thenatural environment. Companies withpoor environmental compliance recordsare therefore more likely to causeenvironmental damages.

Evaluating projects according to thisparameter proved to be more challengingthan anticipated. In some cases,regulators found that a given companyexceeded compliance requirements andthe regulator asked that the companyrectify the situation. In other casescompanies self-reported complianceissues and then rectified them withoutany government action. In a few casesregulators fined companies for operatingout of compliance for extended periodsof time.

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4 REGULATORY COMPLIANCEPlease summarize all ambient air exceedances andall environmental enforcement actions (includingwarning letters, prosecutions, fines, etc.) in 2007for this oil sands operation.

s Meeting all applicable laws is a key component of environmental management.PHOTO: THE PEMBINA INSTITUTE

The Pembina Institute could notdevelop a fair metric to compareprojects on this indicator. The variationin the level of accountability andresponse is not clearly identified in alldata sets, making it difficult to rankprojects against one another. As such,there is no scoring for thisenvironmental performance indicator.However, the compliance record foreach company is provided below inTable 3 for reference. The data isorganized into the following fivecompliance infraction types:

1. self-disclosed incidents that resultedin no release of material to theenvironment

2. non-disclosed incidents (such as thosediscovered by an ERCB facility audit)that resulted in no release theenvironment

3. self-disclosed incidents that resultedin a release of material to theenvironment

4. non-disclosed incidents that resultedin a release of material to theenvironment

5. fines for compliance infractions




4 REGULATORY COMPLIANCE

t Table 3: Summary of compliance records by in situ operator for 2007.52

Project 1) No release, self-disclosed

2) No release, non- disclosed

3) Release, self-disclosed

4) Release, non-disclosed

5) Fines

Canadian Natural Primrose/Wolf Lake 1 1 1 1

Cenovus Christina Lake(pilot) 1 1 4

Cenovus Foster Creek

Husky Tucker (start-up) 1

Imperial Oil Cold Lake 1

JACOS Hangingstone (demonstration) 5

Shell Peace River (demonstration) 2 9

Suncor Firebag 2 1 1

Suncor MacKay River 2 8


Gene

ral E

nviro

nmen

tal M

anag

emen

t


s The seismic lines, roads, well pads and other facilities associated with in situ developmentcontribute to direct habitat loss and fragmentation. PHOTO: DAVID DODGE, THE PEMBINA INSTITUTE

andL


Survey ResultsThe seismic lines, roads, pipelines,power lines, well pads andfacilities associated with in situ oil

sands development contribute to directhabitat loss and the fragmentation ofadditional habitat. This section contains

indicators relating to project land use,conservation offsets to mitigatebiodiversity impacts, development inthreatened woodland caribou habitat,support for conservation targets throughprotected areas planning, andmonitoring of impacts on biodiversity.

t Table 4: Summary of land scores per project. (*Imperial Oil Cold Lake, JACOSHangingstone and Shell Peace River were not scored on land use intensity, therefore theirtotal score is out of four instead of five.)

Project Footprint ConservationOffsets

CaribouHabitat

ConservationPlanning

BiodiversityMonitoring

Total Score

Shell Peace River (demonstration) n/a 0 1 1 1 3*

Husky Tucker (start-up) 1 0 1 1 0 3

Suncor Firebag 0.5 0.5 0 1 1 3

Cenovus Foster Creek 0.75 0 0 1 1 2.75

Suncor MacKay River 0 0.5 0 1 1 2.5

Imperial Oil Cold Lake n/a 0 1 1 0 2*

JACOS Hangingstone (demonstration) n/a 0 1 1 0 2*

Cenovus Christina Lake(pilot) 0 0 0 1 1 2

Canadian Natural Primrose/Wolf Lake 1 0 0 0 0 1



Land

CONTEXT The majority of in situ oil sandsdevelopment is or is planned to occurin relatively intact boreal forest. Any

development in this environment resultsin an increased cumulative impact onspecies and ecological systems.Determining the exact impact of eachfacility requires specific knowledge ofwhere it is being built and thetechniques used for forest clearing andconstruction. However, because anyclearing will have some impact onwildlife, the total project footprint wasused for the calculations.

However, an adjustment has been madeto this metric in order to account forproject production rates. It is necessaryto acknowledge that a project that

produces more bitumen per unit area offootprint than another, is making moreefficient use of land. The metric for thisindicator is footprint (m2) per barrel ofbitumen production, where the footprintis the total disturbance over the life ofthe project and bitumen production isthe total expected production associatedwith that footprint. The metric wasconverted to the more appropriate unitsof hectares per million barrels.

Insufficient data exists in the publicrealm to estimate land use intensity forImperial Oil Cold Lake, JACOSHangingstone and Shell Peace River.Therefore, those projects were notscored on this indicator.

RESULTS

5 FOOTPRINT What is the total expected land disturbanceincluding exploration and production footprints(m2) for your oil sands operation?

s Figure 14: Project land use intensity based on footprint area and bitumen productionvolumes over the total project lifetime.



Land

J LEADERS

Canadian NaturalPrimrose/Wolf Lake,Cenovus Foster Creek, Husky Tucker The land disturbance intensities forCanadian Natural Primrose/Wolf Lakeand for Husky Tucker, as measured bythe total expected land disturbance overthe lifetime of the project divided bythe total expected production, are lowerthan for most other projects.

Cenovus Foster Creek has the nextsmallest land use intensity. This projectreduced its land use intensity by usingunderground storage caverns to replaceaboveground storage, by reorganizingits well pads to reduce their footprint,and by using the “Mega Bin” 3Dsystem to lower seismic impact.

F MIDDLE

Suncor Firebag

D LAGGARDS

Cenovus Christina Lake,Suncor MacKay River Both Cenovus Christina Lake andSuncor MacKay River haveconsiderably larger land disturbanceintensities than the other in situfacilities.

HOW DOES MINING COMPARE? At first glance, oil sands miningoperations show an almost six timesgreater direct footprint intensitycompared with in situ oil sandsprojects. However, this metric onlyincludes direct land disturbances likeroads and well pads and not the impactof reduced use of habitats adjacent to in situ developments through forestfragmentation. Other studies haveshown that when land disturbance andfragmentation effects associated withnatural gas production are considered,the influence on wildlife habitat of insitu operations can reach levels that areequal to and sometimes greater than oilsands mining.53 The land impact andsubsequent wildlife impact of minesand in situ projects are different andrequire different mitigation approaches.

5 FOOTPRINT


Land


CONTEXTIn situ facilities have a residual impacton biodiversity regardless of a company’son-site mitigation measures. Biodiversityand conservation offsets offer a methodto compensate for the residual,unavoidable harm to biodiversity causedby development projects, therebyaspiring to no net loss in biodiversity.54

Biodiversity offsets attempt to mitigateecosystem disturbance and habitat lossby restoring or conserving substituteforest areas so that no net loss of criticalhabitat is maintained in perpetuity.

Conservation offsets compensate fordevelopment impacts as part of acomplementary strategy involvingsignificant new conservation andprotected areas and enhancingmitigation practices and reclamation.The Government of Alberta is exploringthe establishment of conservation offsetpolicies to mitigate terrestrial impacts ofoil sands development.55 The PembinaInstitute considers the voluntaryestablishment of conservation offsets animportant indicator of environmentalperformance in the absence of regulatedoffset programs.

s Figure 15: Conservation offsets can compensate for the residual, unavoidable harm tobiodiversity caused by development projects. PHOTO: DAVID DODGE, CPAWS

6 CONSERVATION OFFSETSPlease report and provide documentation oftotal hectares of biodiversity/conservationoffsets established to compensate forterrestrial impacts of your oil sands project.



Land

J LEADERS

NoneNone of the in situ operatorsdemonstrated an investment inbiodiversity or conservation offsets tofully mitigate terrestrial impacts relatedspecifically to their in situ operations.

F MIDDLE

Suncor Firebag, Suncor MacKay RiverSuncor has invested in the protection ofnearly 600 ha of boreal forest innorthern Alberta under its “BorealHabitat Conservation Initiative”program.56 However, as noted in itssustainability report, this conservationeffort helps offset the environmentalfootprint of all Suncor operations anddoes not specifically relate to the Firebagin situ operation. In 2007, Petro-Canadacommitted to establish conservationoffsets on 194 ha of forest to partiallyoffset impacts associated with what is now the Suncor Mackay Riverexpansion project.57

D LAGGARDS

Canadian NaturalPrimrose/Wolf Lake, CenovusChristina Lake, CenovusFoster Creek, Husky Tucker,Imperial Oil Cold Lake,JACOS Hangingstone, Shell Peace River None of the other companies have made investments in biodiversity orconservation offsets to mitigate the land use impacts from their in situoperations.

Shell invested in conservation offsets aspart of the Albian Sands Energy MuskegRiver Mine Expansion Project. AlbianSands Energy signed a commitmentwith the Alberta ConservationAssociation to provide $200,000 per year for 10 years to purchaseconservation offsets.58 This commitmentdoes not extend to offsetting impactsassociated with the Peace River project.

6 CONSERVATION OFFSETS


Land


CONTEXT Woodland caribou are a threatenedspecies in Canada and Alberta.Environment Canada has concluded thatall woodland caribou herds in Albertaare considered to have non-self-sustaining populations.59 Industrialdevelopment within caribou ranges islargely responsible for these declines.60

Habitat restoration is necessary if thesepopulations are to be maintained, yetnew in situ developments are proposedin the ranges of these declining herds. In the absence of a land use plan thatidentifies how woodland caribou habitatis to be protected, any in situ oil sandsdevelopment, regardless of mitigationmeasures, contributes to the decline ofthis threatened species.

J LEADERS

Husky Tucker, Imperial Oil Cold Lake,JACOS Hangingstone, Shell Peace River These four in situ operations are alllocated outside of the regions in Albertaidentified as woodland caribou habitat.

F MIDDLE

None

D LAGGARDS

Canadian NaturalPrimrose/Wolf Lake, CenovusChristina Lake, CenovusFoster Creek, Suncor Firebag,Suncor MacKay River The remainder of the in situ facilitiesare located in areas defined as caribouhabitat and risk further diminishing thisalready threatened species.

7 CARIBOU HABITATIs your project lease area located in woodlandcaribou habitat as defined by AlbertaSustainable Resource Development?

CONTEXTThe Cumulative EnvironmentalManagement Association (CEMA) is a multi-stakeholder body chargedwith assessing cumulative impacts of development and makingrecommendations to improveenvironmental management in north-eastern Alberta.61 In 2008, CEMArecommended that between 20 and40% of northeastern Alberta should bepermanently protected from industrialdevelopment through the establishment

of legally designated conservationareas.62 This indicator reflects whichcompanies have been constructiveparticipants in supporting theestablishment of conservation areas free of industrial activity.

Land use planning is currentlyunderway in northeastern Alberta.63

Without an effective land use plan that identifies conservation areas andsets cumulative limits on disturbance,criticism of in situ land use impacts will continue to grow.



Land 8 CONSERVATION PLANNINGDid your company support CumulativeEnvironmental Management Associationrecommendations for conservation planning,specifically the recommendation to permanentlyprotect 20–40% of the Regional Municipalityof Wood Buffalo from industrial development?

Figure 16: The cumulative

impacts of in situ oil sands

projects need to be included

in land useplanning.

MAP: ROLAND LINES, THE PEMBINA INSTITUTE.SATELLITE DATA: NATURAL

RESOURCES CANADA,2006

s


J LEADERS

Cenovus Christina Lake,Cenovus Foster Creek, Husky Tucker, Imperial OilCold Lake, JACOSHangingstone, SuncorFirebag, Suncor MacKayRiver, Shell Peace River According to CEMA’s onlinedocumentation, all of the abovecompanies responded in support of therecommendations for conservationplanning.64 Suncor is a member of theBoreal Leadership Council, whosemembers are signatories to the BorealForest Conservation Framework, whichidentifies the need to protect 50% ofCanada’s boreal forest from industrialactivity in perpetuity.65

F MIDDLE

None

D LAGGARDS

Canadian NaturalPrimrose/Wolf LakeCanadian Natural provided a responseto CEMA stating that it would beunable to support the conservationplanning framework. Canadian Naturalnoted that the framework woulddirectly affect 44,000 ha of its mineralleases and wished to have furtherdiscussion on many of the keyrequirements.66

Land


8 CONSERVATION PLANNING

CONTEXT Effective monitoring for changes inwildlife species is an essential componentof oil sands management. Anindependent science advisory committeefound the ABMI67 to be “a comprehen-sive world-class program that Albertanscan rely on for high quality monitoringand reporting on the state of biodiversityin Alberta.”68 It is capable of providingstatistically rigorous information aboutregional-level changes in biodiversity andhas protocols that can be adapted todetermine site-specific changes at thelevel of a single oil sands project.

Without a credible, regional programsuch as the ABMI, there is insufficientinformation to adequately assess changesto biodiversity in the region. The ABMIis supported by both government andvoluntary industry funding but does notcurrently have sustainable long-termfunding. Financial support for theABMI is a key indicator of an oil sandscompanies’ commitment to meaningfulbiodiversity monitoring until acomprehensive regulated approach tobiodiversity monitoring is developed. (A Pembina Institute employee sits onthe ABMI board as a representative forAlberta’s environmental community.)



Land 9 BIODIVERSITY MONITORINGDoes your company provide support (financial or other) to the Alberta Biodiversity MonitoringInstitute (ABMI) in order to provide meaningful,long-term information about changes inbiodiversity in the oil sands region? Has itincorporated ABMI biodiversity monitoringprotocols into your project-specific reportingrequirements? If so, please describe this support.

Land


J LEADERS

Cenovus Christina Lake,Cenovus Foster Creek, ShellPeace River, Suncor Firebag,Suncor MacKay River All of the above companies are listed ascurrent sponsors of the ABMI.69

However, no information was availableon the value of contributions, so it wasnot possible to differentiate companiesaccording to their level of commitment.

F MIDDLE

None

D LAGGARDS

Canadian NaturalPrimrose/Wolf Lake, HuskyTucker, Imperial Oil ColdLake, JACOS Hangingstone Canadian Natural, Husky, Imperial Oiland JACOS were not listed as current or past ABMI sponsors and noinformation was available in theirsustainability reports to suggestotherwise.


9 BIODIVERSITY MONITORING

ir EmissionsA


Survey Results

Air emissions from the oil sands region have the potential to affect human and environ-

mental health. For example, current aciddeposition in Saskatchewan, which ispartially caused by NOx and SO2

emissions from the oil sands, mayexceed the buffering capacity of lakesand soils in regions close to the oilsands.70 This means that lakes and soilsin Saskatchewan could become moreacidic, which would present risks to thehealth of plant and animal species. NOxand SO2 are both produced at in situfacilities. This section reports on projectemission levels and voluntary companytargets to reduce air pollution.

The Pembina Institute calculated bothon and off-site emissions associated withthe in situ operations. On-site emissionswere calculated using company reportedemissions available in the NPRI orERCB reports. Off-site emissionsassociated with electricity generationand the production of natural gasrequired for the operation of the in situfacility were calculated using genericemissions factors. For facilities withcogeneration units that provide powerto both the grid and the in situoperation, emissions were allocatedusing the cogeneration allocationmethodology described in theintroduction.

Project NOxEmissions

SO2 Emissions

Reduction Targets

Total Score

Cenovus Foster Creek 1 1 0 2

Suncor Firebag 0.75 0.5 0.5 1.75

Suncor MacKay River 0.75 1 0 1.75

Cenovus Christina Lake (pilot) 1 0.5 0 1.5

Imperial Oil Cold Lake 0.5 0.75 0 1.25

Canadian Natural Primrose/Wolf Lake 0 0.75 0 0.75

JACOS Hangingstone (demonstration) 0.5 0 0 0.5

Husky Tucker (start-up) 0 0 0 0

Shell Peace River (demonstration) 0 0 0 0

t Table 5: Summary of air emission scores per project.



Air Em

ission

s

CONTEXTNOx emissions contribute to theformation of ground level ozone andacid rain. Ground level ozone canirritate the respiratory system. Currentacid deposition in Saskatchewan mayexceed the buffering capacity of lakesand soils in regions close to the oilsands.71 NOx are emitted in largequantities from in situ projects and haveknown human health impacts andimpacts on the environment.72 For thepurpose of comparing projects, the GRIindicator was converted to a per barrelemissions intensity measure.

RESULTS

J LEADERS

Cenovus Christina Lake,Cenovus Foster Creek, Suncor Firebag, SuncorMacKay River These projects have NOx emissions thatrange between 82 g and 130 g per barrelof bitumen (g/bbl). These projects createNOx emissions by combusting naturalgas to produce steam. Natural gasproduction itself also generates NOxemissions. Reducing the amount ofnatural gas per barrel of bitumenproduced is one of the best ways aproject can reduce NOx emissions. One indication of a project’s natural gasintensity is its steam-to-oil ratio. Thesteam-to-oil ratio is a measurement ofthe total volume of steam required perunit of bitumen production. As natural

10 NITROGEN OXIDES EMISSIONSWhat are your overall project-specificnitrogen oxides (NOx) emissions ingrams (g) per barrel (bbl)?

t Figure 17: NOX emissions per barrel of bitumen produced.

Air EmissionsThe In Situ Oil Sands Report Card S U R V E Y R E S U L T S


gas is used to heat water for steamproduction, a higher steam-to-oil ratiomeans more natural gas consumption.Christina Lake, Foster Creek, Firebag,and MacKay River all have relativelylow steam-to-oil ratios between 2.4:1and 3.3:1.73 In addition, each of theseprojects has a cogeneration facility.Cogeneration is a more efficient way ofproducing heat and electricity (ratherthan producing heat and electricityseparately) that reduces NOx emissionsper barrel of bitumen produced.

F MIDDLE

Imperial Oil Cold Lake,JACOS Hangingstone, Shell Peace RiverThese projects have NOx emissions thatrange between 130 g and 150 g perbarrel of bitumen (g/bbl).

D LAGGARDS

Canadian NaturalPrimrose/Wolf Lake, Husky Tucker These projects have NOx emissions thatrange between 180 g and 620 g perbarrel of bitumen (g/bbl). CanadianNatural Primrose/Wolf Lake and HuskyTucker have the second highest andhighest steam-to-oil ratios, respectively.The Husky Tucker facility noted asteam-to-oil ratio that was three times ashigh as the average steam-to-oil ratiofrom the nine projects surveyed.74 Bothof these projects consume significantlymore natural gas per barrel of bitumenproduced than the other projects.

STEAM-TO-OIL RATIOThe steam-to-oil ratio is a measure-ment of the total volume of steamrequired per unit of bitumenproduction. The steam-to-oil ratio isan easy way to compare projectsand provides a superficial indicationof an in situ operation’s technicaland environmental performance.Operations with high steam-to-oilrations tend to require more waterand combust more natural gas thanoperations with low steam-to-oilratios. In general an in situ operatorwill aim to reduce its project’s steam-to-oil ratio to reduce operating costs.A low steam-to-oil ratio has theadded benefit of reducing theproject’s environmental impact byreducing water requirements and air emissions.Determining why one company’ssteam-to-oil ratio is lower or higherthan another’s can be very difficult.It is determined by a number offactors, such as reservoir character-istics, operator experience, extract-ion technology and operatingprocedures. In this report thePembina Institute often refers to thesteam-to-oil ratio as a justification forleading or lagging environmentalperformance on specific indicators.However, the steam-to-oil ratio isreally an indication of the ability foran in situ operator to optimize itsreservoir, the operator’s experience,the extraction technology, theoperating procedures and in someinstances luck.

10 NITROGEN OXIDES EMISSIONS


Air Em

ission

s


CONTEXTOnce released into the atmosphere, SO2 contributes to the formation ofsmog and haze. In high concentrations,SO2 emissions can have a direct impacton human health, causing respiratoryillness and aggravating pre-existingcardiovascular disease.75 SO2 is also themajor component in the production ofacid rain. As with NOx emissions, theGRI indicator was converted to a perbarrel emissions intensity measure forthe purpose of comparing projects.

RESULTS

J LEADERS

Canadian NaturalPrimrose/Wolf Lake, Cenovus Foster Creek,Imperial Oil Cold Lake,Suncor MacKay River These projects have SO2 emissions thatrange between 44 g and 86 g per barrelof bitumen (g/bbl). Like NOx emissions,SO2 emissions are also linked to steam-to-oil ratios. Generally, a higher steam-to-oil ratio means more natural gasconsumption, which in turn wouldsuggest more SO2 emissions associatedwith the upstream production of naturalgas and from the on-site combustionemissions. Cenovus Christina Lake,Suncor MacKay River and CenovusFoster Creek have the three loweststeam-to-oil ratios, which could in partexplain why these projects have low SO2

emission intensities. Additionally, most

11 SULPHUR DIOXIDE EMISSIONSWhat is your 2007 average SO2 emissionintensity in grams (g) per barrel (bbl)?

t Figure 18: SO2 emissions per barrel of bitumen produced.



Air Emissions

in situ facilities make use of sulphurrecovery technologies to reduce on-siteSO2 emissions resulting from natural gascombustion. Produced gas is anotherfactor that influences SO2 emissions. In situ operations combust purchasednatural gas where sulphur has beenremoved during the processing phase.However, produced gas, which isproduced during bitumen productionand combusted to produce heat, cancontain varying amounts of sulphurdepending on reservoir characteristics.

F MIDDLE

Cenovus Christina Lake,Suncor Firebag These projects have similar SO2

emission intensities of around 110 g per barrel of bitumen (g/bbl).

D LAGGARDS

Husky Tucker, JACOS Hangingstone, Shell Peace River These projects have SO2 emissions thatrange between 214 g and 1,000 g perbarrel of bitumen (g/bbl). HuskyTucker’s relatively high sulphur intensityis a result of off-site natural gasproduction. Because Husky Tucker’soperation requires relatively highamounts of natural gas for each barrel,

a relatively high amount of sulphur isemitted to produce the natural gas usedat the facility. JACOS Hangingstone iscurrently a pilot project. Its absoluteemissions (tonnes of SO2 per day) fallbelow its regulated sulphur emissionlimit. However, because JACOS has notinstalled sulphur recovery technology, itsSO2 emissions intensity is relativelyhigh. Shell Peace River has the highestSO2 emission intensity of projectsexamined because its operations do notinclude sulphur recovery technology.Because the project’s sulphur emissionsare below the 14 tonnes per day licencelimit, it is not required by law to installsulphur recovery technology.76

HOW DOES MINING COMPARE?The sulphur intensity of miningoperations, excluding upgrading, arewell below the average sulphur intensityof in situ operations and areapproximately 30% lower than thelowest sulphur intensity in situ facility,Cenovus Foster Creek. Miningoperations use primarily commercialgrade natural gas to produce steam andelectricity, which has a lower sulphurcontent. The trucks used to transportbituminous sands use diesel, whichemits sulphur, but the resulting SO2

emission intensity per barrel is lowerthan for an in situ facility.

11 SULPHUR DIOXIDE EMISSIONS

Air Em

ission

sThe In Situ Oil Sands Report Card S U R V E Y R E S U L T S


CONTEXTNOx and SO2 emissions bothcontribute to acid rain and affecthuman health.77 The Pembina Institutebelieves that oil sands projects shouldreduce their NOx and SO2 emissionswhenever possible, given theircontribution to acid deposition and thepotential for human health impacts inand around oil sands facilities. ThePembina Institute encourages companiesto take a leadership role and commit tovoluntary reduction targets because thePembina Institute believes companiesshould be minimizing impacts wherepossible regardless of regulated limits.Companies that are able to achieveemission reductions above and beyondregulated limits encourage othercompanies to achieve similar results.This indicator is not included under the GRI guideline, but setting internaltargets is considered to be an essentialcomponent of an environmentalmanagement plan.78

J LEADERS

Suncor FirebagSuncor has committed to reducingabsolute air emissions from its oil sandsfacilities, including Firebag, by 10% by2015.79 The actual reduction of NOxand SO2 emissions are unclear.

F MIDDLE

None

D LAGGARDS

Canadian NaturalPrimrose/Wolf Lake, Cenovus Christina Lake,Cenovus Foster Creek, Husky Tucker, Imperial OilCold Lake, JACOSHangingstone, Shell PeaceRiver, Suncor MacKay River No other companies reviewed in thisassessment have public voluntary airemission reduction targets. Suncor’stargets were made for Suncor oil sandsfacilities before it acquired MacKayRiver in the merger with Petro-Canada.

12 REDUCTION TARGETSDoes your company have publicly reportedtargets to reduce or offset NOx or SO2beyond government regulations? If so, what are they?

aterW


Survey ResultsLack of information on impacts on groundwater is a major concern associated with groundwater use

for in situ operations. On January 30,2008, the Alberta Water Council notedthat “there was a concern that researchand technology support is unable tosustain the planning envisioned by the Alberta Water for Life Strategy.” It further referenced the need for moremapping of quality and quantity ofgroundwater.80 Without sufficient data,government agencies and otherinstitutions are unable to assess the riskposed by large sale in situ developments.

In situ operators heat water to produce

steam, which is then injected into thereservoir to liquefy the viscous bitumen.Wastewater is often disposed of in deepdisposal wells. When considering thescale of in situ operations (213 millionbarrels of bitumen in 2008), the annualwater withdrawals are significant.However, given the lack of data, thepotential risks of current operations and planned expansions cannot bedetermined.

This section concerns in situ operatorwater use, the management of liquidwastes and voluntary company targets to reduce water consumption.

Project WaterIntensity

FreshwaterTargets

Liquid WasteIntensity Targets Total

Suncor Firebag 1 0.75 0.75 0.5 3

Imperial Oil Cold Lake 0.75 0.75 1 0 2.5

Suncor MacKay River 1 0.5 1 0 2.5

Cenovus Foster Creek 0.5 1 0.5 0 2

JACOS Hangingstone (demonstration) 0.75 0.5 0.75 0 2

Canadian Natural Primrose/Wolf Lake 0.5 0 0.5 0 1

Husky Tucker (start-up) 0 1 0 0 1

Cenovus Christina Lake (pilot) 0 0 0 0 0

Shell Peace River (demonstration) 0 0 0 0 0

t Table 6: Summary of water scores per project.

Water



CONTEXTWithdrawing any type of water, evensaline water, can have direct or indirectimpacts on surrounding wetlands, lakes,aquifers and other water systems.However, groundwater monitoring andcurrent data are insufficient toaccurately judge potential impacts andsafe withdrawal limits. The PembinaInstitute believes that in the absence ofsufficient data, operators with lowerconsumptive water use intensity pose alesser risk to groundwater resources. TheGRI indicator was converted to a perbarrel intensity measure for the purposeof comparing projects.

RESULTS

J LEADERS

Imperial Oil Cold Lake,JACOS Hangingstone, Suncor Firebag, Suncor MacKay River These projects’ total water use intensitiesrange from 0.4 bbl to 0.5 bbl water perbarrel of bitumen. The primary driversof water use intensity are a project’ssteam-to-oil ratio and its recycle rates.Projects with low steam-to-oil ratios useless water to produce a barrel ofbitumen. Projects must also recyclewater to further reduce water useintensity. All three leading projects haveboth relatively low steam-to-oil ratiosand recycle produced water.

13 TOTAL WATER CONSUMPTIONWhat is your project’s 2007 average waterconsumption (brackish and fresh water) perbarrel of bitumen produced?

t Figure 19: Total water consumption per barrel of bitumen produced.

Water The In Situ Oil Sands Report Card S U R V E Y R E S U L T S


F MIDDLE

Cenovus Foster Creek Cenovus Foster Creek requires justunder 1 bbl water per barrel of bitumenproduced.

D LAGGARDS

Canadian NaturalPrimrose/Wolf Lake, CenovusChristina Lake, Husky Tucker,Shell Peace RiverThese projects’ total water use intensitiesrange from 2.5 bbl to just under 6 bblwater per barrel of bitumen produced.These relatively high water intensitiesare driven by two different factors. Inthe cases of the Christina Lake andPeace River projects, Cenovus and Shell,respectively, have not installed waterrecycling facilities. Water that is injectedinto the reservoir returns to the surfacewith the bitumen and is then disposedin deep disposal wells. Both theseprojects have to replace every barrel thatis sent to deep disposal wells accountingfor the high water use. Cenovusinstalled water recycling facilities at itsChristina Lake facility in 2008 and Shell plans to recycle produced water as part of the Carmon Creek expansionproject.81 Both Canadian Natural andHusky have installed water recyclingfacilities. However, both these projects

have relatively high steam-to-oil ratiosthat outweigh the water reductioncapacity of the recycling facilities. In addition, Husky Tucker was in start-up phase during this assessment.Water use intensity will decrease as theproject matures.

HOW DOES MINING COMPARE?This assessment shows that in situoperations use on average 1.1 bbl waterfor every barrel of bitumen produced.However, actual water intensities varyby project from 0.5 bbl to just under 5 bbl water for every barrel of bitumenproduced. This additional water issourced from either fresh or salinesources. The average oil sands mine usesover twice as much water as the averagein situ operation per barrel of bitumenproduced. Imperial Oil Cold Lake,JACOS Hangingstone and SuncorMacKay River and Suncor Firebag alluse significantly less water per barrel ofbitumen than a mining operation.However, Canadian Natural Primrose/Wolf Lake, Cenovus Christina Lake,Shell Peace River and Husky Tucker alluse more water than an average miningoperation. There are other distinctionsas well. Mining operations use waterprimarily drawn from the AthabascaRiver, whereas in situ operations tend touse groundwater sources and areincreasingly using saline sources.

13 TOTAL WATER CONSUMPTION

Water



CONTEXTFreshwater resources, which includerivers, streams, lakes and freshgroundwater, are defined as water withtotal dissolved solids (including sodiumcontent) below 4,000 ppm.83 With thelarge water demands required by in situoperations, it is essential that oil sandsprojects minimize their use of freshwaterresources by making use of saline waterresources when available.

RESULTS

J LEADERS

Husky Tucker Husky Tucker’s freshwater use intensityis the lowest of the projects included inthis survey at 0.04 bbl fresh water perbarrel of bitumen. The volume of freshwater used at an in situ facility willdepend on the availability of salinewater resources and company priority orpreference. At the Husky Tucker facility,fresh water is used only for domesticand cleaning purposes, resulting in thelowest freshwater use intensity amongoperations surveyed.84

14 FRESHWATER CONSUMPTIONWhat is the total volume of freshwater usein 2007? 82

t Figure 20: Freshwater consumption per barrel of bitumen produced.



F MIDDLE

Cenovus Foster Creek,Imperial Oil Cold Lake,JACOS Hangingstone, Suncor Firebag, Suncor MacKay RiverAll five projects have freshwaterintensities below the weighted average.These projects’ freshwater use intensitiesrange from 0.4 bbl to 0.5 bbl freshwater per barrel of bitumen.

D LAGGARDS

Canadian NaturalPrimrose/Wolf Lake, Cenovus Christina Lake, Shell Peace RiverThese projects’ freshwater use intensitiesrange from 1 bbl to 5 bbl fresh water forevery barrel of bitumen produced. Asdiscussed in the water intensity section,these projects have higher water useintensities because of high steam-to-oilratios for Canadian Natural

Primrose/Wolf Lake and no waterrecycling facilities for Cenovus ChristinaLake and Shell Peace River. However, allcompanies will need to use increasingamounts of saline water to comply withthe ERCB draft directive Requirementsfor Water Measurement, Reporting, andUse for Thermal In Situ Oil SandsSchemes. In this draft directive, freshwater may only account for 10% ofmakeup water for in situ schemes thatrequire more than 500,000 m3 ofmakeup water per year.85

HOW DOES MINING COMPARE?After accounting for recycling, oil sandsmines use approximately four times asmuch fresh water on a per barrel basis asthe average in situ operation. Oil sandsmines use fresh water drawn mainlyfrom the Athabasca River. Much of thiswater is trapped in the mature finetailings at oil sands facilities. Some insitu operators use saline water, whichreduces their freshwater intensity.

14 FRESHWATER CONSUMPTION

Water



CONTEXTWhen in situ operators re-inject liquidwaste products deep underground, there is a risk that the waste fluids willflow underground and contaminateother groundwater sources. To avoid this problem, operators limit the re-injection pressure, but the increasedvolumes of underground liquids riskfuture flow.86 Some in situ facilities alsoship solid and liquid waste off-site to a waste treatment facility. The GRIindicator was converted to a per barrelintensity measure for the purpose ofcomparing projects.

RESULTSThe results illustrated in Figure 21include volumes of liquid waste fromseveral sources, such as lime sludge,waters from softeners, brine, any formof re-injected wastes and producedwater that cannot or is not treated.Liquid waste intensities are difficult tocalculate because it is uncertain whetherall liquid wastes are reported equally forall operations.

15 LIQUID WASTEWhat is the average volume (bbl) of liquidwaste produced per barrel (bbl) of bitumenfor 2007?

t Figure 21: Liquid waste production per barrel of bitumen produced.



J LEADERS

Canadian NaturalPrimrose/Wolf Lake, Imperial Oil Cold Lake,JACOS Hangingstone, Suncor Firebag, Suncor MacKay RiverThese projects’ liquid waste intensitiesrange from 0.005 bbl to 0.2 bbldisposed water per barrel of bitumen.All the projects with low liquid wasteproduction have both low steam-to-oilratios and water recycling facilities.These two points lead to less wastewaterproduction. The combination ofSuncor MacKay River’s relatively lowsteam-to-oil ratio and its zero liquiddischarge process account for itsleadership position in liquid wasteintensity.87 In a zero liquid dischargesystem, evaporators and a crystallizer areused to essentially eliminate wastewaterproduction. However, a concentratedsalt byproduct must be disposed in a

landfill.

F MIDDLE

Canadian NaturalPrimrose/Wolf Lake Canadian Natural Primrose/Wolf Lake’swastewater disposal is below the averagedisposal value at 0.2 bbl disposed waterper barrel of bitumen produced.

D LAGGARDS

Cenovus Christina Lake,Cenovus Foster Creek, HuskyTucker, Shell Peace River These projects’ liquid waste intensitiesrange from 1 bbl to 4.5 bbl disposedwater per barrel of bitumen production.As noted for question 13, neither ShellPeace River nor Cenovus Christina Lakehad water recycling facilities installed attheir facilities. Because Husky Tuckerhas the highest water use intensity, italso has a high liquid waste intensity. Itis unclear why Cenovus Foster Creek’swastewater intensity is higher than theaverage. The facility has a relatively lowsteam-to-oil ratio and incorporates waterrecycling.

15 LIQUID WASTE

Water



CONTEXTWithdrawing any type of water, evensaline water, can have direct or indirectimpacts on surrounding water systems.Public targets ensure companiesquantify their commitment tocontinuous improvement, help spurtechnological innovation andapplication and lead to real reductionsin water use. The ISO 14001 standardrecognizes internal water reductiontargets as a key component of acomplete environmental managementsystem.88

J LEADERS

Suncor FirebagSuncor states a target to reduce waterintake by 12% by 2015.89 However, this target is applied to its oil sandsoperations as a whole, not specifically to the Suncor Firebag facility.

F MIDDLE

None

D LAGGARDS

Canadian NaturalPrimrose/Wolf Lake, Cenovus Christina Lake,Cenovus Foster Creek, Husky Tucker, Imperial Oil Cold Lake, JACOS Hangingstone, Suncor MacKay River, Shell Peace River None of these operators havecommitted to absolute water reductiontargets for their in situ facilities.Suncor’s targets were made for Suncoroil sands facilities before it acquiredMacKay River in the merger with Petro-Canada.

16 REDUCTION TARGETSDoes your company have publicly reported targetsto reduce water intensity and consumption in your operations beyond government regulations?If so, what are your targets?

Survey Results

G


Oil sands are the fastest growing source of GHG emissions in

Canada.90 According to Environ-ment Canada projections, oil sandsoperations will account for about 44% ofthe increase in Canada’s GHG emissionsfrom 2006 to 2020.91 “Reference case”projections from this study show oil sandscontributions to national emissions risingfrom 4% of Canada’ emissions in 2006 to 12% in 2020.

This rate of growth in emissions standsas a potential barrier to Canada’scommitments through the Kyotoaccord. According to international law,as of 2005, Canada entered a legallybinding commitment to set emissionstargets to reduce its average annualgreenhouse emissions 6% below 1990levels between 2008 and 2012.92 If theinternational community is to succeed

at limiting global GHG emissions, it isnecessary for developed countries suchas Canada to rapidly reduce emissions.For this to take place, Canada wouldneed to address the large and growingvolume of emissions that are derivedfrom oil sands operations.

In situ operators consume largequantities of natural gas to producesteam. The combustion of natural gascreates carbon dioxide, a significantcontributor of GHG emissions. Thissection examines GHG intensity andcompany targets to reduce absoluteamounts of GHG pollution.

The methodology used to derive the on-site, off-site and allocation ofcogeneration emissions presented in thissection is the same as that discussed inthe Air Emissions section.

limate ChangeC

Project GHGs Targets Total

Cenovus Foster Creek 1 0 1

Suncor Firebag 1 0 1

Cenovus Christina Lake (pilot) 0.75 0 0.75

Suncor MacKay River 0.75 0 0.75

Imperial Oil Cold Lake 0.5 0 0.5

JACOS Hangingstone (demonstration) 0.5 0 0.5

Canadian Natural Primrose/Wolf Lake 0 0 0

Husky Tucker (start-up) 0 0 0

Shell Peace River (demonstration) 0 0 0

t Table 7: Summary of climate change scores per project.

Clima

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ange


CONTEXTOver 44% of the increase in Canada’sGHG emissions from 2006 to 2020 isprojected to be a direct result of new oilsands development.93 If Canada is toachieve the necessary deep reductions inoverall GHG emissions, emissions mustbe reduced in absolute terms. However,GHG intensity is a useful way tocompare the efficiency of oil sandsoperations. It is important to note thatthe emissions presented here are from theproduction of bitumen only.

RESULTS

Note: This survey includes on-site aswell as off-site emissions, includingthose associated with upstreamnatural gas production. ReportingGHG emissions associated withupstream natural gas production is not a standard practice but isincluded here because of theconsiderable amount of natural gasused by in situ operators and toenable a fair comparison betweenoil sands operations.


17 GHG EMISSIONSWhat is your 2007 average greenhouse gasemission intensity in kilograms (kg) per barrel(bbl) bitumen?

t Figure 22: Greenhouse gas emissions per barrel of bitumen produced.

Climate Change

J LEADERS

Cenovus Christina Lake,Cenovus Foster Creek, SuncorFirebag, Suncor MacKay Similar to NOx emissions, GHGemissions are closely tied to steam-to-oilratios. All three of these projects haverelatively low steam-to-oil ratios thatexplains their low GHG emissionintensities. Three of these operationshave also incorporated cogeneration intotheir facilities.

F MIDDLE

Canadian NaturalPrimrose/Wolf Lake, Imperial Oil Cold Lake,JACOS Hangingstone, Shell Peace River, Suncor MacKay RiverIn comparison with the Husky Tuckerfacility, all of these operations haverelatively lower steam-to-oil ratios, andtherefore combust less natural gas andproduce fewer GHG emissions.However, all of these projects havehigher steam-to-oil ratios than theleading projects.

D LAGGARDS

Husky Tucker As noted previously, the Husky Tuckersteam-to-oil ratio in 2007 was threetimes as high as the average steam-to-oilratio from the nine projects surveyed.94

This explains why Husky Tucker’s GHGemissions are so high in comparisonwith the other projects.

HOW DOES MINING COMPARE?The average in situ operation generatestwo and half times more GHGs perbarrel of bitumen produced incomparison with oil sands miningoperations. The lowest GHG intensityin situ operations, Cenovus Foster Creekand Suncor Firebag, generate just undertwice the GHG emissions per barrel ofan average oil sands mining project. The explanation for this difference at themost basic level is energy requirements.Each barrel of bitumen produced in situ requires more energy than acorresponding barrel of mined bitumen.Since the energy used in oil sandsoperations is from fossil fuel sources,primarily natural gas, an increase inenergy use leads to a correspondingincrease in GHG emissions.



17 GHG EMISSIONS

Clima

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ange



CONTEXTA public opinion poll conducted byProbe Research in 2007 showed that92% of Albertans polled felt that oilsands companies should reducegreenhouse emissions at all theirfacilities. The same poll showed that70% of Albertans felt that absolutereductions in GHGs were appropriate,compared to the 20% of Albertanspolled that preferred targets thatreduced only the intensity of GHGemissions per barrel.95 Voluntary targetsare recognized by ISO 14001 as anecessary component of an environ-mental management system.

J LEADERS

None

F MIDDLE

None

D LAGGARDS

Canadian NaturalPrimrose/Wolf Lake, Cenovus Christina Lake,Cenovus Foster Creek, Husky Tucker, Imperial Oil Cold Lake,JACOS Hangingstone, Shell Peace River, Suncor Firebag, Suncor MacKay River None of these companies have publiclyreported targets to reduce absoluteGHG emissions.

18 REDUCTION TARGETSDoes your company have publicly reportedabsolute greenhouse gas emission reductiontargets beyond government regulations? If so, what are they?



Conclusions

T able 8 summarizes the projectscores by category for each project.It also includes the average score

across all projects.

As Table 8 indicates, Suncor Firebag,Cenovus Foster Creek, Imperial OilCold Lake and Suncor MacKay Riverare above average in overallenvironmental performance comparedto their in situ peers. These operationshave several features in common. Eachproject is a commercial scale operationthat is performing at or slightly below

expected rates. They all have relativelylow steam-to-oil ratios, which helpsaccount for relatively lower intensitiesfor air and GHG emissions, total andfresh water use, and liquid wasteproduction. A low steam-to-oil ratioresults from the quality of the reservoirand the production choices of the insitu facility operator. All four projectsinclude cogeneration, which furtherreduces their air and GHG emissionintensities. Each of the operatingcompanies also perform relatively well

s Table 8: Summary of project scores (*Imperial Oil Cold Lake, Shell Peace River and JACOS Hanging-stone were scored out of four for land indicators because they were not scored on land use intensity.)

ProjectGeneral

EnvironmentalManagement

(out of 3)

Land(out of 5)

Air Emissions(out of 3)

Water(out of 4)

Climate Change

(out of 2)

Overall Score

Suncor Firebag 1.5 3 1.75 3 1 60%

Cenovus Foster Creek 2 2.75 2 2 1 57%

Imperial Oil Cold Lake 2.5 2* 1.25 2.5 0.5 55%

Suncor MacKay River 1.5 2.5 1.75 2.5 0.75 53%

AVERAGE 1.83 2.36 1.06 1.56 0.50 44%

Shell Peace River (demonstration) 3 3* 0 0 0 38%

Cenovus Christina Lake (pilot) 2 2 1.5 0 0.75 37%

Husky Tucker (start-up) 2 3 0 1 0 35%

JACOS Hangingstone (demonstration) 0.5 2* 0.5 2 0.5 34%

Canadian Natural Primrose/Wolf Lake 1.5 1 0.75 1 0 25%


The In Situ Oil Sands Report Card C O N C L U S I O N S

on environmental management, regionalcommitments and, in Suncor’s case,published reduction targets for airemissions and water use. The projectscores range from 53% to 60%.

Canadian Natural Primrose/Wolf Lake,Cenovus Christina Lake, Husky Tucker,JACOS Hangingstone and Shell PeaceRiver all score below the averageenvironmental performance. Thereasons for these lower scores are mixed.The Shell, Cenovus and JACOSprojects were all pilot or demonstrationprojects during 2007. Pilot anddemonstration projects do not oftenincorporate technologies like producedwater recycling and sulphur recoverytechnologies and tend to have highersteam-to-oil ratios compared withcommercial projects leading to loweroverall scores. The Husky and CanadianNatural projects were designed ascommercial projects but still performedbelow the average score. Husky Tuckerexperienced a number of challengesassociated with its operation and was instart-up phase in 2007. The project wasperforming well below its designedbitumen production rate. CanadianNatural Primrose/Wolf Lake has arelatively high steam-to-oil ratio, leadingto high water use and disposal, and airand GHG emission intensities.Canadian Natural also scored poorly onenvironmental management andcommitments to regional initiatives suchas the ABMI and public support forconservation planning.

There are a number of importantconclusions that can be drawn fromTable 8 and the report in general. Theseconclusions are outlined below.

There is substantial room forenvironmental improvementThe average score in our survey was44%, suggesting there is substantialroom for improvement in theenvironmental performance andmanagement of in situ oil sandsprojects. The highest-ranked project wasSuncor Firebag, with a score of 60%.The lowest-ranked project wasCanadian Natural Primrose/Wolf Lake,with 25%. Most projects demonstrateleadership in some areas of project-specific environmental performance andmost have an environmental policy thatcommits to continuous improvement.

Projects scored consistently poorly onfour indicators:

1. Reduction Targets: Very few in situoperators have established absolutereduction targets for air emissions,water use and GHG emissions thatgo beyond regulated requirements.Only Suncor has absolute reductiontargets for air emissions and wateruse. Despite the significant GHGemissions of the oil sands industry,no operators have voluntary targetsto reduce GHG emissions.

2. Biodiversity Offsets: Suncor was alsothe only company to invest inbiodiversity offsets to compensate forthe impacts associated with in situoil sands development, and even herelevel of commitment is notcommensurate with the level ofterrestrial impacts. The purpose of abiodiversity offset is to mitigateimpacts associated with habitat lossand the disturbance of ecosystems byrestoring or conserving substitute



forest areas so that no net loss ofcritical habitat is maintained inperpetuity.

3. Biodiversity Monitoring: Only threecompanies, Suncor, Cenovus andShell, financially support the AlbertaBiodiversity Monitoring Institute.

4. Third-party Accredited EnvironmentalManagement: Only Imperial Oil andShell have third-party accreditedenvironmental management systems.

Disclosure of environmental performancedata is not accessible or comparable Husky, Cenovus and Shell fullyparticipated in this assessment andprovided the Pembina Institute withenvironmental data and detailedexplanations regarding their operations.However, the Pembina Institute found itdifficult to compile comparable data forall projects using public data sources.The data are distributed over a numberof different databases and are often notreported in a consistent manner acrossor within those databases. For example,the ERCB in situ progress reportscontain significant information on wateruse and wastewater disposal. However,each company reports data slightlydifferently and it can take a significantamount of time to calculate water usevalues that are comparable betweenprojects. Weak public disclosure ofenvironmental impact data weakenstransparency and risks underminingpublic understanding and confidence inthe sector.

Both in situ and mining projects havesignificant environmental impactsWe compared an average mining projectagainst the in situ projects on land use,air (NOx and SO2) and GHGemissions, water use and freshwater useintensities. As one might imagine, theaverage oil sands mine disturbs moreland, emits more NOx and is morewater intensive than the average in situproject. However, in other categories insitu projects are more environmentallyintense. For example, the averagemining operation is less GHG and SO2

intense than all in situ projects surveyed.Some of the poor performing in situprojects were more NOx and waterintense than the impacts associated withan average oil sands mine. In addition, our land intensity assessment did notincorporate the impacts of fragment-ation and upstream natural gasproduction associated with in situoperations.96

Best practices are not widely adoptedThere is a wide variation in performancebetween in situ operators. If a fictional insitu operation, in this assessment, tookthe aspects of the best project in eachcategory it could achieve a score of 85%on this survey. That is to say that anyproject could achieve a score of 85%simply by incorporating the best practicesof the leading in situ operator into itsown operations. This result suggestssubstantial room for improvement. Giventhat many in situ operators have not



voluntarily adopted viable strategies toaddress some of the environmental risksposed by in situ oil sands development,more consistent regulation by the Albertaand federal government could also drivethe kind of environmental outcomes thatare possible.

To achieve 100% on this survey wouldrequire in situ operators to improveupon policies and actions that are alsoalready being implemented by in situoperators. The only questions where noproject received full points were onestablishment of GHG emission, waterand air targets and biodiversity offsets.Setting environmental targets is a policywidely used by industries around theworld to demonstrate a commitment to continuous improvement. Suncor has already established environmentalperformance targets for its facilities

as a whole. There are also numerousexamples of biodiversity offset programs.Both Suncor and Shell have invested in these programs. An in situ operatorthat incorporated the best practices in the industry and established GHGreduction targets and biodiversity offsetscould achieve 100% on this survey.

Cumulative impacts are generally not consideredThis assessment considers the impactsand performance of in situ oil sandsprojects at a project level. Althoughimportant, given the overall pace andscale of oil sands development, both insitu and mining, there is an inadequatelevel of environmental management toensure that the regional environment isprotected.

1

Government

To date the government has failed to establish regionalenvironmental thresholds that

will ensure the oil sands are developedin manner that protects the ecologicalintegrity of the region. Government hasalso failed to create an atmosphere thatencourages oil sands companies tocontinuously improve their environ-mental performance.97 There is still timeto establish these limits and encouragecontinuous environmental improve-ment. The oil sands are a financiallyvaluable energy resource that some ofthe world’s largest energy companies arecompeting to develop. As demonstratedin the analysis of this report, there areexamples of leading performance for the majority of environmental indicatorsin this report. However, no singleproject has incorporated all the bestpractices available in the industry. TheGovernment of Alberta is in a uniqueposition to leverage the internationalinterest in the oil sands to mandateapplication of best practices andinnovation in environmental practicesand technologies.

Mandate environmental stewardship

Most companies have not developedproject-specific reduction targets,invested in biodiversity offsets,biodiversity monitoring through ABMIor third-party accredited environmentalmanagement programs. It appears that

weak government requirements forenvironmental performance areresponsible for the inconsistentapplication of best practices across the industry.

Specific policy improvements include the following:

z Absolute environmental reductiontargets: Most companies have notdefined their commitment tocontinuous environmentalimprovement by setting publicreduction targets. Government shouldencourage setting public reductiontargets by providing some benefit tocompanies that set and meet publictargets. Government could equallysupport leaders by penalizing laggardswho are not adopting the technologiesand practices that leading companiesare employing. The EnviroVistaLeaders is an example of a policy thatprovides some benefit toenvironmental leaders.

z Biodiversity offsets: Governmentshould make compensatory offsetmitigation of terrestrial impacts of insitu oil sands development mandatory,and develop conservation offsetpolicies as recommended by theproposed wetland policy for Alberta99

and Responsible Actions: A Plan forAlberta’s Oil Sands.100

z Biodiversity monitoring: Governmentshould integrate mandatory financialsupport for the ABMI and mandatoryreporting using ABMI protocols intoexisting and future approvals for insitu oil sands development projects.



Recommendations


4

2

3

The In Situ Oil Sands Report Card R E C O M M E N D A T I O N S

z Third-party accredited environmentalmanagement: Only two in situoperators have implemented third-party accredited environmentalmanagement systems at their facilities.Given the significant environmentalimpacts of in situ oil sands projectsthe Government of Alberta shouldmake this a mandatory requirementfor all oil sands facilities.

Make oil sands environmentalperformance data more comparableand accessible

It remains difficult to find and compareenvironmental data for in situ projectsand for the oil sands region as a whole.As the regulator, the Government ofAlberta already receives environmentaldata for each of the in situ operators.The Government of Alberta should helpdisseminate this information byproviding environmental performanceindicators, similar to those used in thisreport, on a project by project basis. Forexample, while the ERCB in situprogress reports provide a wealth ofinformation on in situ operations, theyonly include information on selectenvironmental indicators and the data isdifficult to find and aggregate for eachproject.

Halt new approvals until environmentalmanagement systems are complete

Leading in situ oil sands projects needto operate within a regulatory systemthat sets cumulative thresholds or limitsto protect the environment. AlthoughAlberta has committed to a new

approach to the management ofcumulative effects, this remains a workin progress. Necessary elements includea land use plan, requirements for GHGemissions reductions and a frameworkfor water management. These regulatorygaps mean that expanded in situ oilsands development is risky from both aninvestment101 and an environmentalperspective. Given that many of theelements in management of cumulativeenvironmental impacts in the oil sandsare either absent or under development,it is appropriate to pause approval ofnew oil sands developments untilappropriate environmental managementsystems and regulations areimplemented.

Create a regulatory system that rewards innovation

Best environmental practices are notwidely adopted between in situoperators. The Government of Albertashould catalyze innovation and theadoption of best practices in the in situindustry. Most oil sands applications arefor the two primary in situ technologies,SAGD and CSS, and promise noimproved environmental performancerelative to already producing commercialoperations. The Government of Albertacould encourage innovation andtechnology development by requiringeach new proposed project to performbetter than the present best in classproject. Such a policy would encouragenew technology development and theadoption of proven best practices tocontinuously raise the bar in environ-mental performance. Once a new bar isset, regulations similar to Directive 74


1

2

3


(The Tailings Directive) and the draftwater directive, Requirements for WaterMeasurement, Reporting, and Use forThermal In Situ Oil Sands Schemes, couldset performance requirements to ensureimprovements in existing projects for allelements of air, water, land and GHGmanagement.

IndustryIndustry must acknowledge the real and significant project-specific andcumulative impacts of in situ oil sandsdevelopment. While there is a clear needfor government leadership in many areasindustry can support government bydemonstrating leadership on a projectby project basis and displaying a sincereeffort to address environmental impactsby incorporating best practices, support-ing progressive public policy andinnovating environmental practices and technologies.

Demonstrate leadership

There are four specific environmentalindicators that very few projects scoredwell on: reduction targets, biodiversityoffsets, biodiversity monitoring andthird-party accredited environmentalmanagement. There are alreadyexamples of in situ oil sands operatorsthat have implemented policies orpractices in these four areas. Suncor has set absolute reduction targets forwater use and air emissions, has investedin biodiversity offsets and supports theABMI. Both Shell and Imperial havethird-party accredited environmentalmanagement systems.

Provide accessible public data

The level of reporting on environmentalindicators required by government isinsufficient to accurately assess andcompare in situ oil sands projects.Reporting frameworks, such as the GRI,do exist that provide a clear list of social,environmental and economic reportingindicators that can be compared acrossprojects. In situ operators should reporton project-specific environmentalindicators similar to the indicatorsincluded in this report. A recent reportby Northwest and Ethical Investments,Lines in the Sands: Oil Sands SectorBenchmarking, also concluded that oilsands operators must significantlyimprove their public disclosure toprovide investors with a “true picture of oil sands risk.”102

Focus on the issues

In situ operators should acknowledgethe real environmental impacts of in situ development, both cumulative and project specific, and describe theirstrategies for addressing these impactsover time. Only this approach will leadto increased environmental performanceovertime and create an atmosphereconducive to collaboration andconstructive dialogue betweengovernment, industry and externalstakeholders.


5

6

4


Incorporate best practices and lead improvements

Our assessment demonstrates that anyoil sands in situ operator could achieve ascore of 85% on this survey simply byadopting current best practices for eachenvironmental indicator. At a minimumin situ operators should be incor-porating the best practices of their peers.

Those operators that are already leadingin specific indicators, such as Cenovus,Suncor and Imperial Oil, shouldcontinue to build upon their leadershipposition by innovating new technologyand practices to continually reduce theirenvironmental impact. Achieving 100%on this assessment in the future ispossible by incorporating best practicesin the in situ oil sands industry andsupplementing those practices withcommon practices from otherindustries. For example, the onlyindicators for which no in situ projectreceived full marks are environmentaltargets and biodiversity offsets.

As the analysis in this reportdemonstrates, there is also clear linkbetween environmental performance onsome indicators (water use, air emissionsand GHG emissions) and a project’ssteam-to-oil ratio. Minimizing aproject’s steam-to-oil ratio reducesenvironmental impact and delivers costsavings.

Acknowledge the cumulative impactsof in situ development

Many of the most serious impacts of insitu oil sands development are a result ofthe cumulative impact of in situoperations. It is the role of governmentto establish regional environmentalthresholds that protect the ecologicalintegrity of the oil sands region. Oilsands in situ owners and operatorsshould acknowledge the extent ofcurrent and projected cumulativeimpacts in the oil sands region and takea leadership role in support for theestablishment of regional environmentalthresholds and completed land useplanning.

Follow the best practice in situdevelopment checklist

An in situ oil sands operator can satisfyall of the points above by ensuring itsproject follows the best practice in situdevelopment checklist in Table 9. Thenumerical targets represent the topquartile of 2007 performance of theprojects included in this assessment.

An in situ operation that ranks well onthis checklist is a leading in situ facilityrelative to its peers. However, in theabsence of regional regulations toprotect the ecological integrity of the oilsands region, even a leading project maycontribute to unacceptable cumulativeimpacts in the oil sands region. Further,as this is a relative assessment a leadingproject today. Improvements inenvironmental performance are expectedto continually reduce per barrel impacts.



s Table 9: Best practice in situ development checklist.

General Environmental Managementq An environmental policy that commits to

continuous improvement in environmentalperformance

q An environmental management system that hasbeen accredited by an independent third party,such as ISO 14001 or equivalent

q Publicly reported project-specific environmentaldata

q A strong legal compliance record

Landq Land use intensity below 0.5 hectares per million

barrels, measured by total expected disturbanceover the life of the project divided by totalexpected production

q Compensation for the terrestrial impacts of the in situ project by establishing biodiversity/conservation offsets equivalent to the areaaffected by the in situ oil sands project

q In the absence of a land use plan that shows howwoodland caribou will be conserved in northeasternAlberta, no operations in threatened woodlandcaribou habitat

q Public policy support for establishing largeconservation areas free of industrial developmentto provide habitat for wildlife affected by in situoil sands development

q Financial support Alberta Biodiversity MonitoringInstitute in order to provide meaningful, long-terminformation about changes in biodiversity in theoil sands region

Air Emissionsq NOx intensity below 0.08 kg/bbl (including off-

site electricity and natural gas production) q SO2 intensity below 0.08 kg/bbl (including off-

site electricity and natural gas production)

q Publicly reported targets to reduce absolute NOxor SO2 emissions beyond government regulations

Waterq Total saline water use intensity below 0.5 bbl/bbl

bitumenq No freshwater consumption except for

domestic use

q Publicly reported absolute water reduction targetsbeyond government regulations

Climate Changeq Greenhouse gas emissions intensity below

78 kg/bbl bitumenq Public absolute greenhouse gas reduction targets

beyond government regulations



Summary of Conclusions and Recommendations

Conclusion Government Recommendations

Industry Recommendations

Substantial room for improvementThere is substantial room for environmental improvement in the following areas:z Reduction targets

z Water usez GHG emissionsz Air emissions

z Biodiversity offsetsz Biodiversity monitoringz Third-party accredited

environmental management

Mandate environmentalstewardshipGovernment must provideincentives or regulate as needed to encourage action in the fourareas on the left. Specificrecommendations are as follows:z Provide some benefit to

companies that have voluntarytargets such as reducing regula-tory hurdles or providing finan-cial incentives. Supplementincentives with a clear messagethat continuous improvement is expected.

z Make compensatory offsetmitigation of terrestrial impactsin situ oil sands developmentmandatory.

z Integrate mandatory financialsupport for the ABMI intoexisting and future approvals.

z Make third-party accreditedenvironmental managementsystems mandatory for in situ projects.

Take the leadIndustry leaders must demonstratetheir capacity to implement reductiontargets, biodiversity offsets andmonitoring and third-party accreditedenvironmental management. Specificrecommendations are as follows:z Establish specific absolute reduction

targets or water use, air emissionsand GHG emissions.

z Invest in biodiversity offsetscommensurate with the terrestrialimpact of the in situ project.

z Support the Alberta BiodiversityMonitoring Institute and integrate itsresults into management planning.

z Implement a third-party accreditedenvironmental management systemfor the in situ project.


The In Situ Oil Sands Report Card S U M M A R Y



DisclosureThe Pembina Institute found itdifficult to compile comparable datafor all projects using public datasources. Weak public disclosure ofenvironmental impact data weakenstransparency and risks underminingpublic understanding andconfidence in the sector.

Make oil sands environmentalperformance data accessibleMake project-specific andcumulative oil sands in situenvironmental performance dataavailable in an accessible andcomparable format.

Provide accessible public dataDisclose project-specific environmentaldata in a format that is comparableacross the in situ industry.

Mining vs. in situOn some important environmentalindicators, like NOx and GHGemissions, in situ operations are more intensive than miningoperations. In addition, our landuse intensity assessment did not incorporate the impacts offragmentation and upstreamnatural gas production associatedwith in situ operations.103

Mining vs. in situIn situ operations have significant,cumulative and long-term impactsand should be submitted torigorous environmental impactassessments, monitoring andregulation.

Focus on the issuesIn situ developments have significantenvironmental impacts and there issubstantial room for improvementacross the industry. In situ operationsshould seriously engage stakeholdersand publicly discuss solutions to theseissues.


The In Situ Oil Sands Report Card S U M M A R Y



Best practicesThere is a wide variation inperformance between in situoperators. All projects could achieve 85% on this survey byincorporating already existing best practices.

Create a competitiveatmosphere for innovationThere is very little incentive for in situ operators to improveenvironmental performance.Government must consider howharness the innovative capacity ofthe oil sands industry to addressenvironmental issues.

Incorporate best practices andlead improvementsAdopt current best practices andcontinuously improve once bestpractices have been adopted.

Cumulative impactsThere is an inadequate level of environmental management to ensure that the regionalenvironment is protected.

Halt new approvals untilenvironmental systems are completeComplete regional management of cumulative impacts from oilsands development that protectsthe ecological integrity of theAlberta’s ecosystem beforeapproving new projects.

Acknowledge cumulative impacts of in situ developmentTake a leadership role in support for the establishment of regionalenvironmental thresholds andcompleting land use planning.



The previous sections summarizedperformance by indicator toidentify leading practices in each

category. This section providesinformation on a project by projectbasis. The purpose of this section is tohighlight where each company is doingwell, why the project is doing well andwhat challenges the project has

experienced. The section also summarizes,where possible, actions that eachcompany is taking to resolve outstandingenvironmental issues. The PembinaInstitute provided each project summaryto participating companies to ensure afair representation of each company’sperformance and plans to resolveoutstanding environmental issues.104

Appendix: Project Summaries


SCORE RANK

The In Situ Oil Sands Report Card P R O J E C T S U M M A R I E S

Canadian Natural Primrose/Wolf Lake: 25%Canadian Natural’s Primrose and Wolf Lakeprojects are located about 55 km north ofBonnyville, Alberta. Canadian Naturalwholly owns and operates both projects.Canadian Natural started Wolf Lake

operations in 1985, and then addedPrimrose South in 1998 followed byPrimrose North in mid-2006. CanadianNatural’s operations also include acogeneration unit.


1.5/3 BelowAverage

Canadian Natural Primrose/Wolf Lake’s environmental management score is on par with other projects. Toimprove its performance in this area Canadian Natural should implement a third-party management system.

Land

1/5 BelowAverage

Canadian Natural Primrose/Wolf Lake scores well below the average in the land category because thePembina Institute found no evidence that Canadian Natural supports CEMA, the ABMI or has purchasedbiodiversity offsets. Canadian Natural’s project is also located in caribou habitat.

Air Emissions

0.75/3 BelowAverage

Canadian Natural Primrose/Wolf Lake outperforms other operations on its SO2 emission intensity. Howeverits NOx emissions are relatively higher than other projects. NOx emissions are strongly correlated to thesteam-to-oil ratio of the project. Canadian Natural could reduce its NOx emissions by reducing its steam-to-oil ratio. Canadian Natural could also create public emission reduction targets to achieve a better score inthis category.

Water

1/4 BelowAverage

Canadian Natural Primrose/Wolf Lake’s water use intensity, freshwater use intensity and wastewaterproduction is higher than the average in situ project. A relatively high steam-to-oil ratio of about 5:1105

is partially responsible for this result. Canadian Natural is also behind its peers in incorporating brackishwater into its water use profile. However, Canadian Natural is aiming to reduce freshwater use by 73% by 2013 in response to the ERCB’s draft directive.106

Climate Change

0/2 BelowAverage

Canadian Natural Primrose/Wolf Lake’s GHG intensity is one of the highest in the industry, and CanadianNatural currently has no public emission reduction targets above and beyond government regulations. GHGemissions are strongly tied to steam-to-oil ratio, so reducing steam-to-oil ratio should lead to better GHGperformance. Public targets could help to drive this change internally. Canadian Natural is focusing ontechnology such as follow up production with SAGD or solvents and in situ combustion schemes to increaseproduction. These technologies may have environmental benefits as well because they require less energyproduction per barrel of bitumen produced.

Overall

4.25/1725%

BelowAverage

Canadian Natural Primrose/Wolf Lake is the lowest-scoring project reviewed in this assessment. Its project hasa relatively high steam-to-oil ratio, which results in higher water use, air emissions and GHG emissions relativeto other projects. In addition Canadian Natural has not supported initiatives, such as the ABMI and CEMA,which most other operators have participated in. Public targets to reduce absolute air emissions, water useand GHG emissions would also help increase the score of Canadian Natural Primrose/Wolf Lake.

s Table 10: Summary of Canadian Natural Primrose/Wolf Lake’s 2007 environmental performance.


SCORE RANK


Cenovus Christina Lake: 37% (PILOT)

Cenovus’s Christina Lake project isapproximately 75 km north of its FosterCreek project. Like Foster Creek, ChristinaLake is owned 50/50 by Cenovus andConocoPhillips and operated by Cenovus.Christina Lake operations began in 2003,

and it uses SAGD to recover the bitumen.Cenovus Christina Lake became acommercial project in 2008, and it madeoperational changes that are not reflected inthis survey.


2/3 AverageCenovus Christina Lake’s environmental management score is on par with other operations. It publicly reportsproject-specific data and has an environmental policy that commits to continuous improvement. It couldachieve a higher score by implementing a third-party certified environmental management system.

Land

2/5 BelowAverage

Cenovus supports the ABMI, and provided conditional support to the CEMA TEMF recommendation regardingbiodiversity conservation in the Regional Municipality of Wood Buffalo.107 However, Christina Lake is located incaribou habitat and the land use intensity of the project is relatively high compared to other in situ projects. Toimprove its score in this category Cenovus should reduce the land use intensity of the project and invest inconservation offsets.

Air Emissions

2/3 BelowAverage

Cenovus Christina Lake’s NOx and SO2 emissions are relatively low compared to other operations becauseit has a relatively low steam-to-oil ratio. Although SO2 emissions are within regulated limits, Cenovus couldfurther reduce SO2 emissions by incorporating a sulphur recovery unit. Cenovus has approval to incorporatea sulphur recovery facility once additional production trains come online.108 To score better in this categoryCenovus should develop public absolute reduction targets.

Water

0/4 BelowAverage

Cenovus Christina Lake received a zero score in the water category because in 2007 it required relatively highamounts of water, high amounts fresh water and produced high amounts of wastewater.109 In addition, thebrackish wells that Cenovus was using to supply water to its facility fell below the threshold of 4,000 ppm totaldissolved solids, changing their classification to fresh water.110 Since 2007, Cenovus has optimized its boilersand installed a water recycling facility at Christina Lake. It has also drilled new saline water wells. Together,these efforts are likely to enhance the project’s water use performance.

Climate Change

0.75/2 AboveAverage

As with air emissions, Cenovus Christina Lake’s relatively low steam-to-oil ratio means the project has arelatively low GHG intensity. However, to improve in this area Cenovus should develop absolute GHG targets.

Overall

6.25/1737%

BelowAverage

To improve its score Cenovus should create public targets committing to reducing absolute air and GHGemissions and water use. These commitments would help to quantify Cenovus’s commitment to continuousimprovements. Cenovus would also show leadership in establishing biodiversity offsets to offset the impact ofits operations in the boreal forest. Christina Lake has transitioned from a pilot to commercial project since thisreport was written. The Pembina Institute looks forward to scoring its commercial operations during the nextreport card period.

s Table 11: Summary of Cenovus Christina Lake’s 2007 environmental performance.


SCORE RANK


Cenovus Foster Creek: 57%Cenovus Foster Creek, located 75 km northof the city of Cold Lake, Alberta, usesSAGD technology to extract bitumen. The project is co-owned by Cenovus andConocoPhillips in a 50/50 partnership andoperated by Cenovus. The Foster Creekoperation was the first commercial SAGD

facility. Commercial operation started in2001, and it produced just under 50,000bbl/day on average in 2007, making it thelargest SAGD bitumen producer. CenovusFoster Creek incorporates a cogenerationunit and has one of the lowest steam-to-oilratios in the in situ industry.


2/3 AverageCenovus Foster Creek’s environmental management score is on par with other operations. It publicly reportsproject-specific data and has an environmental policy that commits to continuous improvement. It couldachieve a higher score by implementing an externally verified environmental management system.

Land

2.75/5 AboveAverage

Cenovus has reduced the land use intensity at Foster Creek by using underground storage caverns toreplace aboveground storage, reorganizing their well pads to reduce footprint, and has lowered the seismicimpact by using the “Mega Bin” 3D system. Although Cenovus supports the ABMI, its Foster Creek project islocated in an area with nearby caribou herds,111 reducing a portion of its land score. Cenovus couldimprove its score by investing in conservation offsets.

Air Emissions

2/3 AboveAverage

Cenovus Foster Creek’s NOx and SO2 intensities are among the lowest of the in situ facilities scored inthis assessment. The primary driver for these two indicators is the project’s relatively low steam-to-oil ratio.Cenovus Foster Creek also uses a cogeneration facility, further reducing NOx and SO2 intensities. AlthoughCenovus Foster Creek has delivered reductions in its emission intensity, to remain a leader in this arearequires continuous reductions in absolute air emissions and public air emission reduction targets.

Water

2/4 AboveAverage

Cenovus Foster Creek has among the lowest fresh and total water use intensities of the compared projects. Inaddition, Cenovus Foster Creek is currently piloting a re-boiler which will recycle a portion of the facility’s blowdownwater further reducing water make up requirements.112 However, its wastewater production is considerably above theaverage in situ project.113 To score better in this category Cenovus should strive to reduce its liquid waste productionand develop public water use reduction targets that go beyond government regulated water reduction targets.

Climate Change

1/2 AboveAverage

Cenovus Foster Creek’s GHG intensity is among the lowest of the compared in situ projects. Foster Creekachieves this relatively low GHG intensity by maintaining a relatively low steam-to-oil ratio and bygenerating heat and electricity using cogeneration. To achieve a better score in this category Cenovusshould publicly state absolute GHG emission reduction targets.

Overall

9.75/1757%

AboveAverage

Overall Cenovus Foster Creek’s environmental performance is among the best in the industry. Its operationsare performing well technically which results in reduced environmentally impact. To Cenovus’s credit it isinvesting in new technologies to more efficiently produce bitumen and further reduce the environmentalimpact intensity of its operations. For example, Cenovus has developed and is implementing wedge wellsand is experimenting with second stage “once through steam generation,” which together are likely toimprove the energy efficiency of its operations. Cenovus could invest in several areas to maintain its lead inenvironmental performance, including setting public targets and investing in land offsets.

s Table 12: Summary of Cenovus Foster Creek’s 2007 environmental performance.


Husky Tucker: 35% (START-UP)Husky Tucker, located 30 km northwest ofthe city of Cold Lake, Alberta, uses SAGDtechnology to extract bitumen from theClearwater formation. Husky has 100%interest in the project. Steam injectioncommenced in late August 2006, and firstproduction was achieved in late November

2006. However, average production was1,700 bbl/day in 2007, well below the30,000 bbl/day design capacity. Wellproduction issues at Husky Tucker haveresulted in a very high steam-to-oil ratio ofabout 14:1 in 2007.114

SCORE RANK



2/3 Average

This project’s environmental management system score is similar to other operations’ scores. Husky publiclyreports project-specific data and has an environmental policy that commits to continuous improvement. Toachieve full marks in this category, Husky should implement an environmental management system certifiedby a third party.

Land

3/5 AboveAverage

The land use intensity for Husky Tucker is lower than for most other projects. To improve its score in thiscategory, Husky should invest in biodiversity offsets and provide support to the ABMI. It has committed tofinancially support the ABMI in 2010.115

Air Emissions

0/3 BelowAverage

Husky Tucker underperforms compared with other operations in NOx and SO2 emissions. This project’s highNOx and SO2 intensities are both linked to its high steam-to-oil ratio. If Husky Tucker reduced its steam-to-oilratio to the design level (3:1) then it would likely compare well with other projects on air emissions. Husky isconsidering different production strategies, such as changing the pre-heat strategy in new wells andpotentially re-drilling existing wells or drilling infill wells between current wells to enhance production.116

Water

1/4 BelowAverage

Husky Tucker’s overall water use is very high compared with other projects because of its high steam-to-oil ratio.Water with total dissolved solids of about 19,000 mg/L is treated for use as process make-up water. HuskyTucker uses very little fresh water compared to other projects – fresh water at the Tucker site is reserved fordomestic and cleaning purposes, so it is independent of the project’s steam-to-oil ratio.

Climate Change

0/2 BelowAverage

As with air emissions and water use, Husky Tucker’s GHG emissions are tied to its steam-to-oil ratio. Becausethis project has a high steam-to-oil ratio, its GHG emissions are also high. Husky Tucker does not have anypublicly available targets.

Overall

6/1735%

BelowAverage

Overall, the Husky Tucker project scores poorly because of poor bitumen production. Absolute emissions arewell within regulatory limits for the operations, but the relatively high intensities of water use, air emissions andGHG emissions reflect the project’s poor performance. Environmental data reported for 2008 showsimprovement from 2007, and Husky expects the Tucker project’s performance to improve in 2009.117

Nonetheless, Husky should invest in several actions, such as air, water and climate targets, and supporting theABMI, while improving the technical performance of its project.

s Table 13: Summary of Husky Tucker’s 2007 environmental performance.


SCORE RANK


Imperial Oil Cold Lake: 55%Imperial Oil Cold Lake, located approx-imately 25 km northwest of the city ofCold Lake, Alberta, was among the firstattempts at thermal oil production. Thecommercial pilot began production in1975, followed by phases 1 to 10 between

1985 and 1994 and then phases 11 to 13,which included a cogeneration facility in2002. Imperial Oil Cold Lake producedjust under 50% of the in situ producedbitumen, making it the single largest in situ project. It uses CSS technology.


2.5/3 AboveAverage

Imperial Oil Cold Lake scored above average with 83% in the environmental management category. The only difference between Imperial Oil’s project and most other projects is that the Cold Lake facility is ISO 14001 certified.

Land

2/4 Average

Imperial Oil Cold Lake scores average in the Land category because it is not located in caribou habitat andImperial Oil supported the CEMA recommendation to preserve 20–40% of the Regional Municipality of WoodBuffalo. However, it could improve its score further by investing in conservation offsets and supporting theABMI. In addition there was insufficient information in the public realm to calculate Imperial Oil Cold Lake’sfootprint intensity so this project was not evaluated on this metric.

Air Emissions

1.25/3 Average

Imperial Oil Cold Lake scores average in this category because its SO2 emission intensity is relatively lowcompared to other projects, its NOx emission intensity is on par with other projects, and Imperial Oil hasnot generated public targets to reduce air emissions. Because this project already has a relatively low steam-to-oil ratio and a cogeneration unit, reducing these emission intensities will likely be difficult. FortunatelyImperial Oil is already experimenting with solvents to further reduce energy use, water use and airemissions. The results to date show an increase in bitumen recovery.118 If Imperial Oil Cold Lake can reduceits NOx emission intensity and publish public targets it will improve its score in this category.

Water

2.5/4 AboveAverage

Imperial Oil Cold Lake scores well in this category because it has a relatively low water and freshwater useintensity and low liquid waste disposal intensity. The primary driving forces behind these lower intensities areImperial Oil Cold Lake’s relatively low steam-to-oil ratio and recycling of produced water. To score better in thiscategory Imperial Oil should develop public water use reduction targets for the Cold Lake facility.

Climate Change

0.5/2 AverageImperial Oil Cold Lake scores average in the climate change category mainly for not incorporating GHGemission reduction targets into its operations. Imperial Oil could also improve its score slightly in this categoryby reducing its GHG intensity.

Overall

8.75/1655%

AboveAverage

Overall Imperial Oil Cold Lake scores relatively well in this survey because of a combination of goodenvironmental management and technical performance which results in relatively good environmentalperformance. However, Imperial Oil can still improve significantly by setting public targets, investing inconservation offsets and further reducing its NOx and GHG intensity.

s Table 14: Summary of Imperial Oil Cold Lake’s 2007 environmental performance.


SCORE RANK


0.5/3 BelowAverage

JACOS Hangingstone’s environmental management score is well below the average of the projects comparedfor this assessment. JACOS does not appear to have an environmental policy that commits to continuousimprovement and the Hangingstone operation does not have a third-party certified environmentalmanagement system.

Land

2/4 Average

JACOS Hangingstone scores around average in the land category because the facility is not located in caribouhabitat and JACOS has agreed to the CEMA recommendation to conserve 20-40% of the RegionalMunicipality of Wood Buffalo. It could improve its score by investing in biodiversity offsets and supporting theABMI. In addition insufficient information existed in the public realm to calculate JACOS’ footprint intensity.

Air Emissions

0.5/3 BelowAverage

JACOS Hangingstone’s air emission intensities are well above average. JACOS Hangingstone’s NOxemissions are strongly correlated to steam-to-oil ratio, so reducing steam-to-oil ratio will also lead to acorresponding decrease in NOx emissions. For sulphur JACOS Hangingstone is currently performing withinits regulated sulphur emission limit; however, it could reduce its sulphur intensity by reducing its steam-to-oilratio as well as installing a sulphur recovery unit. JACOS Hangingstone should be able to increase its scorein this category by decreasing its steam-to-oil ratio, investing in sulphur recovery technology and establishingair emission reduction targets.

Water

2/4 AboveAverage

JACOS Hangingstone has a relatively low water use intensity in comparison with other projects. This projectrecycles its produced water which is rare for a pilot project. The other two pilot projects, Christina Lake andPeace River, do not recycle produced water. JACOS Hangingstone has also been able to achieve a relativelylow steam-to-oil ratio of 3.24 which keeps its water use intensity low. Despite JACOS Hangingstone’s relativelygood water performance the project experienced a number of challenges in 2007. Its zero liquid dischargesystem did not perform as expected leading to increased total liquid waste from the project. It also experiencedlower steam quality and reduced blowdown recycling than designed.119 JACOS Hanginstone’s score will likelyimprove in the future if it is able to rectify some of these challenges.

Climate Change

0.5/2 Average

JACOS Hangingstone’s score in this category is average relative to the compared projects. JACOSHangingstone has a relatively low steam-to-oil ratio which results in a relatively low GHG intensity for a pilotproject. It could improve its score in this category by further reducing its GHG intensity and developing publicGHG emission reduction targets.

Overall

5.5/1634%

BelowAverage

As a pilot project, JACOS Hangingstone scores quite well in the water category. However, to increase its scoreJACOS Hangingstone will need to implement air and GHG emission and water use targets, improve itsenvironmental management score and further reduce its steam-to-oil ratio to reduce its NOx, SO2 and GHGemissions.


JACOS Hangingstone: 34% (DEMONSTRATION)JACOS Hangingstone, located 50 kmsouthwest of Fort McMurray, started as apilot project in 1999 at 2,000 bbl/dayproduction. It expanded to 4,000 bbl/day in

2000 and by another 4,000 bbl/day in2002. In 2007, JACOS Hangingstoneproduced just over 7,000 bbl/day.

s Table 15: Summary of JACOS Hangingstone’s 2007 environmental performance.


Shell Peace River: 38% (DEMONSTRATION)The Shell Peace River complex is located 40 km northeast of the town of Peace River,Alberta. Shell began operations there in1986. Today the Peace River operation is defined as a demonstration project.

It produced at 9,130 bbl/day in 2007. Shell has experimented with a number oftechnologies at this site, including SAGD,CSS and J-Wells.

SCORE RANK


3/3 AboveAverage

Shell Peace River is the only project to score 100% in the environmental management category. The onlydifference between the Shell Peace River and most other projects is that the Peace River facility is ISO14001 certified.

Land

3/4 AboveAverage

The project does quite well in the land section. The project is not in caribou habitat and Shell provides supportto both CEMA and the ABMI. To improve this score further Shell should invest in biodiversity offsets specificallyfor the Peace River complex.

Air Emissions

0/3 BelowAverage

The project is among the worst projects from air emission intensity standpoint. Shell Peace River’s relativelyhigh air emissions are tied to its relatively high steam-to-oil ratio at 5.8. This high steam-to-oil ratio meansShell combusts significantly more natural gas relative to other projects to produce a barrel of bitumen atPeace River. In addition, Shell Peace River is currently licensed to emit a maximum of 14 t/d SO2 and doesnot have sulphur recovery at the facility. However, the SO2 waiver will expire at the end of 2010. Shell hasrecently submitted a regulatory application for the Three Creeks project (see reference below), which willdecrease SO2 emissions to 2 t/d by the end of 2010. Sulphur recovery is planned for the Carmon Creekproject.120 To improve its score in this area Shell will need to significantly reduce the NOx and SO2 intensityof its facility and provide public absolute reduction targets.

Water

0/4 BelowAverage

Shell Peace River currently only uses freshwater sources and does not recycle produced water. These two pointscombined with a high steam-to-oil ratio results in the Peace River complex being among the worst projects in terms ofwater use. Shell is planning to rectify these concerns in a number of ways. In the proposed Carmon Creek projectthat was filed in January 2010, Shell plans to recycle produced water and use brackish water as the primarymake-up water source, which would be aligned with the draft ERCB directive.121, 122 These two actions shouldreduce Peace River’s water use intensity, freshwater intensity and wastewater intensity. However, Shell willhave to reduce its steam-to-oil ratio as well to compare well against other projects.

Climate Change

0/2 BelowAverage

Like air emissions Shell Peace River has a high GHG emission intensity because of its high steam-to-oil ratio. Inaddition Shell does not have public emission reduction targets for the Peace River facility. The proposedCarmon Creek project includes several GHG abatement measures, including heating integration, cogenerationand acid gas injection. Shell would score better in this category if it could significantly reduce the GHGintensity of its Peace River facility and develop public GHG emission reduction targets.

Overall

6/1938%

BelowAverage

Shell Peace River is a demonstration project and so underperforms relative to its peers. Shell will have tosignificantly reduce its air and GHG emissions and well as water and freshwater use and liquid wasteproduction as part of its Carmon Creek expansion to perform well relative to other projects.


s Table 16: Summary of Shell Peace River’s 2007 environmental performance.


SCORE RANK



:1.5/3 BelowAverage

Suncor Firebag’s environmental management score is on par with the in situ operations compared in this assessment. To improve its score Suncor should invest in a third-party certified environmentalmanagement system.

Land

3/4 AboveAverage

Suncor Firebag scores relatively well in the land category for a number of reasons. Suncor supports both theABMI and the CEMA recommendation to preserve 20-40% of the Regional Municipality of Wood Buffalo.Suncor also receives partial credit for protecting nearly 600 ha of boreal forest in northern Alberta.124

However Suncor’s facility is located in caribou habitat so loses a portion of its score on this indicator.

Air Emissions

1.75/3 AboveAverage

Suncor Firebag’s low steam-to-oil ratio means Suncor combusts less natural gas, producing fewer NOx andSO2 emissions per barrel of bitumen produced. The cogeneration facility produces steam and electricitymore efficiently than producing steam on-site and importing electricity, which also reduces emissions. Suncor has also established absolute air emission reduction targets which help improve its score in thiscategory as well.

Water

3/4 AboveAverage

Suncor’s relatively high score in this category can be attributed to Firebag’s relatively low steam-to-oil ratio, waterrecycling and public water use reduction targets. Suncor recycles 90% of its water and the water used at Firebag isitself primarily sourced from reverse osmosis reject stream from Suncor’s base facility.

Climate Change

1/2 AboveAverage

Suncor Firebag’s GHG intensity is among the lowest of the compared in situ projects. Firebag has a relativelylow steam-to-oil ratio and also uses cogeneration to produce heat and electricity. Both of these factors result inFirebag’s low GHG intensity. However, to improve its score further Suncor should develop public targets toreduce absolute GHG emissions.

Overall

10.25/1760%

AboveAverage

Suncor Firebag scores the highest of all the compared projects; however there is still considerable room toimprove. Suncor could increase its environmental performance and score on this survey by providing absoluteGHG reduction targets, expanding its biodiversity offsets program to account for new developments and byimplementing a third-party audited environmental management system.

Suncor Firebag: 60%Suncor Firebag is located 65 km northeast of Fort McMurray, Alberta. Suncor startedstage one of Firebag in 2004, followed bystage two in 2006. Both phases use SAGDto recover bitumen. The project alsoincludes a cogeneration facility to produceelectricity and steam for the SAGD

operation. Production during 2007 averaged 37,000 bbl/day, well below the70,000 bbl/day capacity. Suncor Firebag’sproduction was lower than expected becauseof plant turnaround, chamber pressurerestrictions imposed by the ERCB, pumpfailures and downsizing of pumps.123

s Table 17: Summary of Suncor Firebag’s 2007 environmental performance.



1.5/3 AverageSuncor MacKay River’s environmental management score is on par with the in situ operations compared in this assessment. To improve its score Suncor should invest in a third-party certified environmentalmanagement system.

Land

2.5/4 Average

Suncor MacKay River scores average in this category because it provides support to the ABMI, supports theCEMA recommendation to conserve 20–40% of the Regional Municipality of Wood Buffalo, and has invested in conservation offsets. However, MacKay River is located in caribou habitat and has a relatively high footprintintensity. To improve its score in this category Suncor should reduce the footprint intensity of MacKay River andinvest in biodiversity offsets specifically for the MacKay River project.

Air Emissions

1.75/3 AboveAverage

Suncor MacKay River scores well in this category because its air emission intensity is quite low relative toother projects. MacKay River’s steam-to-oil ratio is relatively low compared to other in situ projects whichhelps explain the low air emission intensity. Suncor could score better in this category by providing airemission reduction targets for the MacKay River. It is unclear whether Suncor’s published targets for its oilsands facilities also apply to the MacKay River complex.

Water

2.5/4 AboveAverage

From a water perspective, Suncor MacKay River uses a zero liquid discharge system which essentially eliminates theneed for wastewater disposal and increases recycle rates at the operation. Its low steam-to-oil ratio also means thefacility requires less water per barrel of bitumen produced than other facilities. To improve its score in this categorySuncor should reduce freshwater consumption at the MacKay River project and provide public water reductiontargets for the facility.

Climate Change

0.75/2 AboveAverage

Suncor MacKay River’s GHG emission intensity is among the lowest of the compared projects. Its relatively lowsteam-to-oil ratio and the incorporation of cogeneration explain this relatively low GHG intensity. However,Suncor could score better in this category by developing public absolute GHG emission reduction targets.

Overall

9/1753%

AboveAverage

Suncor MacKay River is performing well technically as suggested by its low steam-to-oil ratio, but to improve itsscore further, Suncor MacKay River must quantify its commitment to continuous improvement by establishingpublic targets to reduce absolute air, GHG emissions and water use. Suncor MacKay River also has one of thelarger footprints of the operations reviewed and is located in caribou habitat, which further reduces its score.

SCORE RANK


Suncor MacKay River: 53%Suncor MacKay River is located 60 kmnorthwest of Fort McMurray. Petro-Canada(now part of Suncor) first steamed theMacKay River operations in September2002 and first produced bitumen inNovember of the same year. The project uses

SAGD to produce bitumen, and it has acogeneration unit operated by TransCanadato produce heat and electricity. In 2007,Suncor MacKay River averaged 21,248bbl/day bitumen production.

s Table 18: Summary of Suncor MacKay River’s 2007 environmental performance.


1 Sarah Jordaan, David Keith and Brad Stelfox. 2009. Quantifyingland use of oil sands production: a life cycle perspective.Environmental Research Letters, 4 (2009) 024004,www.iop.org/EJ/article/17489326/4/2/024004/erl9_2_024004.pdf.

2 Available at www.albertawatercouncil.ca/Portals/0/pdfs/WPPT%20Policy%20web.pdf.

3 Available at www.treasuryboard.alberta.ca/docs/GOA_ResponsibleActions_web.pdf.

4 Simon Dyer, Jeremy Moorehouse, Katie Laufenberg and RobPowell, Under-Mining the Environment: �e Oil Sands ReportCard (Drayton Valley, AB: �e Pembina Institute, 2008),www.oilsandswatch.org/pub/1571.

5 Richard Schneider and Simon Dyer, Death by a �ousand Cuts:�e Impacts of In Situ Oil Sands Development on Alberta’sBoreal Forest (Drayton Valley, AB: �e Pembina Institute,2006), www.oilsandswatch.org/pub/1262.

6 Cenovus was formed on December 1, 2009, when EnCanaCorporation formally split into an integrated oil company(Cenovus) and a natural gas company (EnCana).

7 Shell has tried a number of bitumen production techniques at itsPeace River operations, including SAGD, J-wells, multi-laterallegs and HayBob.

8 Global Reporting Initiative, Environment: PerformanceIndicators (Amsterdam, �e Netherlands: Global ReportingInitiative, 2008). Information about speci�c indicators can befound at www.globalreporting.org/ReportingFramework/G3Online/PerformanceIndicators/.

9 Northwest and Ethical Investments, Lines in the Sand: Oil Sands Sector Benchmarking (Vancouver, BC: 2009),www.ethicalfunds.com/SiteCollectionDocuments/docs/lines_in_the_sands_full.pdf.

10 Kerry ten Kate, Josh Bishop and Ricardo Bayon, BiodiversityO�sets: Views, Experience, and the Business Case (Washington,DC: 2004), 13, www.forest-trends.org/publication_details.php?publicationID=660 (accessed November 27, 2009)

11 Government of Alberta, Responsible Actions: A Plan forAlberta’s Oil Sands (February 2009), 19.

12 Environment Canada, Scienti�c Review for the Identi�cation of Critical Habitat for Woodland Caribou (Rangifer taranduscaribou), Boreal Population, in Canada (Ottawa: EnvironmentCanada, 2008), vi.

13 Ibid., 145.14 www.cemaonline.ca15 Terrestrial Ecosystem Management Framework for the Regional

Municipality of Wood Bu�alo, prepared by the SustainableEcosystems Working Group of the Cumulative EnvironmentalManagement Association, June 2008, 3.

16 abmi.biology.ualberta.ca17 Jari Kouki, Jeremy Kerr, Reed Noss, John Reynolds, Jim Schiek

and Stan Boutin, “World-Class Biodiversity Monitoring MakesAlberta a World Leader,” (2008).

18 Environment Canada (NPRI), “2006 Air Pollutant Emissionsfor Canada Version 1,” (April 2008), www.ec.gc.ca/pdb/websol/emissions/2006/2006_canada_e.cfm (accessed April 2009).

19 Ibid.20 Julian Aherne, “Critical Load and Exceedance Estimates for

Upland Forest Soils in Manitoba and Saskatchewan,” (2008).21 U.S. Environmental Protection Agency, “Health E�ects of

Pollution,” www.epa.gov/Region7/programs/artd/air/quality/health.htm (updated November 2007).

22 Ibid.

23 Environment Canada (NPRI), “National Pollutant ReleaseInventory 2007 Summary — 3.1.1.1 Criteria Air Contaminants,”www.ec.gc.ca/inrp-npri/default.asp?lang=En&n=0D743E97-1,(last modi�ed May 14, 2009).

24 Global Environmental Management Initiative, “ISO 14001Environmental Management System Self Assessment Checklist,”www.gemi.org/docs/PubTools.htm (accessed August 29, 2007).

25 Mary Gri�ths, Amy Taylor and Dan Woynillowicz, TroubledWaters, Troubling Trends: Technology and Policy Options to Reduce Water Use in Oil and Oil Sands Development inAlberta (Drayton Valley, AB: �e Pembina Institute, 2006),www.pembina.org/pub/612.

26 In response to industry recommendations, this indicator hasbeen modi�ed from its original format. �e survey questioninitially read: What ratio of water use is derived from fresh water,as compared to saline water, for 2007? As noted in the surveyresponses, using the ratio method allows projects with very highwater consumption rates to use more fresh water while stillmaintaining a low ratio. Adjusting the metric to focus on totalvolumes of fresh water removed this potential for misleadingresults and provides a comparison according to the key issue,which is to promote conservation of fresh water.

27 Government of Alberta, Water (Ministerial) Regulation,Chapter/Regulation: 205/1998 (Edmonton, AB: Queen’s Printer,1998), section 1, 1(z), www.qp.alberta.ca/index.cfm.

28 Mary Gri�ths, Amy Taylor and Dan Woynillowicz, TroubledWaters, Troubling Trends: Technology and Policy Options to Reduce Water Use in Oil and Oil Sands Development inAlberta (Drayton Valley, AB: �e Pembina Institute, 2006),www.pembina.org/pub/612.


30 Environment Canada, Turning the Corner: Detailed Emissionsand Economic Modelling (Ottawa, ON: 2008), 42,www.ec.gc.ca/doc/virage-corner/2008-03/pdf/571_eng.pdf.

31 Probe Research, Albertans’ Perceptions of Oil SandsDevelopment Poll: Part I, Pace and Scale (Drayton Valley, AB:�e Pembina Institute 2007), www.pembina.org/pub/1446.

32 Northwest and Ethical Investments, Lines in the Sand: Oil Sands Sector Benchmarking, (Vancouver, BC: 2009),www.ethicalfunds.com/SiteCollectionDocuments/docs/lines_in_the_sands_full.pdf.

33 Ibid.34 Energy Resources Conservation Board, “Oil Sands,”

www.ercb.ca/portal/server.pt?open=512&objID=249&PageID=0&cached=true&mode=2 (accessed May 14, 2009).

35 Ibid.36 Alberta Energy, “What Is Oil Sands” (last revised June 11,

2009), www.energy.gov.ab.ca/OilSands/793.asp.37 Energy Resources Conservation Board, “Oil Sands,”

www.ercb.ca/portal/server.pt?open=512&objID=249&PageID=0&cached=true&mode=2 (accessed March 30, 2009).

38 Alberta Energy. June 24, 2009. Alberta’s Leased Oil Sands Area.www.energy.alberta.ca/OilSands/pdfs/OSAagreesStats_June2009vkb.pdf.

39 Alberta Energy, “What Is Oil Sands,” revised June 11, 2009,www.energy.gov.ab.ca/OilSands/793.asp.

40 Imperial Oil. Cold Lake Approvals 8558 and 4510 2008 ERCBAnnual Performance Review. Calgary: ERCB; 2008,www.ercb.ca/portal/server.pt/gateway/PTARGS_0_0_321_256_0_43/http%3B/ercbcontent/publishedcontent/publish/ercb_home/industry_zone/industry_activity_and_data/in_situ_progress_reports/2008/.

Endnotes



The In Situ Oil Sands Report Card E N D N O T E S

41 Energy Resources Conservation Board, ST98: Alberta’s EnergyReserves 2008 and Supply/Demand Outlook 2009–2018,(Calgary, AB: ERCB, 2009), Figure 2-13, www.ercb.ca/docs/products/STs/st98-2009.pdf.

42 Energy Resources Conservation Board, “Oil Sands: Develop-ment,” www.ercb.ca/portal/server.pt/gateway/PTARGS_0_0_312_249_0_43/http%3B/ercbContent/publishedcontent/publish/ercb_home/public_zone/oil_sands/development/ (accessedAugust 2009).

43 Alberta Energy, “What Is Oil Sands,” www.energy.gov.ab.ca/OilSands/pdfs/FactSheet_OilSands.pdf (accessed May 14, 2009).

44 Energy Resources Conservation Board, ST98: Alberta’s EnergyReserves 2008 and Supply/Demand Outlook 2009–2018,(Calgary, AB: ERCB, 2009), Figure 2-12,www.ercb.ca/docs/products/STs/st98-2009.pdf.

45 Alberta Chamber of Resources. Oil Sands Technology Roadmap:Unlocking the Potential. Final Report (2004), 28, www.acr-alberta.com/projects/Oil_Sands_Technology_Roadmap/OSTR_report.pdf.

46 Imperial Oil’s �rst pilot project in the Cold Lake area startednear Ethel Lake in the 1960s. Its �rst commercial project wasapproved in 1983. Shell started operations in the Peace Riverarea 25 years ago, using a variant of the CSS process referred toas the “radial soak” method that has a vertical well with fourhorizontal arms that extend into the bitumen.

47 �e ultimate recovery rate with CSS is expected to be 20–35%compared to 40–70% for SAGD. Alberta Chamber ofResources, Oil Sands Technology Roadmap: Unlocking thePotential, Final Report (2004), 28–29, www.acr-alberta.com/Projects/Oil_Sands_Technology_Roadmap/PSTR_report.pdf.

48 Imperial Oil. Cold Lake Approvals 8558 and 4510 2008 ERCBAnnual Performance Review (Calgary, AB: ERCB, 2008),www.ercb.ca/portal/server.pt/gateway/PTARGS_0_0_321_256_0_43/http%3B/ercbcontent/publishedcontent/publish/ercb_home/industry_zone/industry_activity_and_data/in_situ_progress_reports/2008/.

49 Alberta Oil Sands Technology and Research Authority, Historyof AOSTRA and Accomplishments. (2002), www.aeri.ab.ca/sec/new_res/docs/history_on_the_web_020130.pdf.

50 Alberta Energy Research Institute, Steam Assisted GravityDrainage (SAGD) (2002) www.aeri.ab.ca/sec/suc_sto_001_2.cfm.

51 Northwest and Ethical Investments, Lines in the Sand: Oil Sands Sector Benchmarking, (Vancouver, BC: 2009),www.ethicalfunds.com/SiteCollectionDocuments/docs/lines_in_the_sands_full.pdf.

52 �e information in this table is sourced from ERCB monthlyprogress reports for 2007, from sustainability reports andresponses from the companies to our surveys.

53 Sarah Jordaan, David Keith and Brad Stelfox, “Quantifying land use of oil sands production: A life cycle perspective,”Environmental Research Letters 4 (2009), 024004,www.iop.org/EJ/article/1748-9326/4/2/024004/erl9_2_024004.pdf.

54 Kerry ten Kate, Josh Bishop and Ricardo Bayon, BiodiversityO�sets: Views, Experience, and the Business Case (Washington,DC: 2004), 13, www.forest-trends.org/publication_details.php?publicationID=660 (accessed November 27, 2009).

55 Government of Alberta, Responsible Actions: A Plan forAlberta’s Oil Sands (February 2009), 19.

56 Alberta Conservation Association, www.ab-conservation.com.57 Petro-Canada, personal correspondence to the Oil Sands

Environmental Coalition, September 25, 2007.58 Shell, personal correspondence, 2009.59 Environment Canada, Scienti�c Review for the Identi�cation of

Critical Habitat for Woodland Caribou (Rangifer taranduscaribou), Boreal Population, in Canada (Ottawa: EnvironmentCanada, 2008), vi.

60 Ibid., 145.61 CEMA. 2009. Cumulative Environmental Management

Association (CEMA). www.cemaonline.ca.

62 Terrestrial Ecosystem Management Framework for the RegionalMunicipality of Wood Bu�alo, prepared by the SustainableEcosystems Working Group of the Cumulative EnvironmentalManagement Association, June 2008, 3.

63 Lower Athabasca Regional Plan, www.landuse.alberta.ca/RegionalPlans/LowerAthabasca/Default.aspx.

64 Cumulative Environmental Management Association, CEMAResponses Received on TEMF Recommendation (CEMA,2008), www.cemaonline.ca/component/option,com_docman/task,doc_download/gid,1438/.

65 www.borealcanada.ca/framework-e.php66 Cumulative Environmental Management Association, CEMA

Responses Received on TEMF Recommendation (CEMA,2008), www.cemaonline.ca/component/option,com_docman/task,doc_download/gid,1438/.

67 abmi.biology.ualberta.ca68 Jari Kouki, Jeremy Kerr, Reed Noss, John Reynolds, Jim Schiek

and Stan Boutin, “World-Class Biodiversity Monitoring MakesAlberta a World Leader,” (2008).

69 Alberta Biodiversity Monitoring Institute, Previous Sponsors,www.abmi.ca/abmi/sponsor/sponsors.jsp (accessed June 2009).

70 Julian Aherne, “Critical Load and Exceedance Estimates forUpland Forest Soils in Manitoba and Saskatchewan,” (2008).

71 Ibid.72 U.S. Environmental Protection Agency, “Health E�ects of

Pollution,” www.epa.gov/Region7/programs/artd/air/quality/health.htm (last updated November 2007).

73 From reported valuables for each of the projects available in theirERCB progress reports.

74 Husky Tucker’s steam-to-oil ratio is 14:1. �e average steam-to-oil ratio is (including Husky Tucker in the calculations) is 4.6:1.

75 U.S. Environmental Protection Agency, “Health E�ects ofPollution,” www.epa.gov/Region7/programs/artd/air/quality/health.htm (last updated November 2007).

76 Shell Canada Energy, Peace River In Situ Oilsands ProgressReport Commercial Scheme Approval 81431, 2008,135,www.ercb.ca/portal/server.pt/gateway/PTARGS_0_0_303_263_0_43/http%3B/ercbContent/publishedcontent/publish/ercb_home/industry_zone/industry_activity_and_data/in_situ_progress_reports/2008/.

77 Environment Canada (NPRI), “National Pollutant ReleaseInventory 2007 Summary – 3.1.1.1 Criteria Air Contaminants,”www.ec.gc.ca/inrp-npri/default.asp?lang=En&n=0D743E97-1,(last modi�ed May 14, 2009).


79 Suncor Energy, Summary Report on Sustainability (2009),www.suncor.com/pdf/2009_Report_on_Sustainability_Summary.pdf.

80 Alberta Water Council, Water for Life recommendation forrenewal, Appendix A (2008), 30.

81 Shell. Shell Canada Peace River In Situ Expansion: CarmonCreek Project (2009), 17, www-static.shell.com/static/can-en/downloads/aboutshell/our_business/e_and_p/carmon_creek_disclosure_mar16_09.pdf.

82 In response to industry recommendations, this indicator hasbeen modi�ed from its original format. �e survey questioninitially read: What ratio of water use is derived from fresh water,as compared to saline water, for 2007? As noted in the surveyresponses, using the ratio method allows projects with very highwater consumption rates to use more fresh water while stillmaintaining a low ratio. Adjusting the metric to focus on totalvolumes of fresh water removed this potential for misleadingresults and provides a comparison according to the key issue,which is to promote conservation of fresh water.

83 Government of Alberta, Water (Ministerial) Regulation,Chapter/Regulation: 205/1998 (Edmonton, AB: Queen’s Printer,1998), section 1, 1(z), www.qp.alberta.ca/index.cfm.


The In Situ Oil Sands Report Card E N D N O T E S

84 Husky Energy Inc., Husky Oil Operations Limited: Tucker�ermal Project Commercial Scheme 9835.; 2008:144,www.ercb.ca/docs/products/osprogressreports/2008/2008ColdLakeHuskyTuckerSAGD9835.pdf.

85 ERCB. Draft Directive: Requirements for Water Measurement,Reporting, and Use for �ermal In Situ Oil Sands Schemes.2009.

86 Mary Gri�ths, Amy Taylor and Dan Woynillowicz, TroubledWaters, Troubling Trends: Technology and Policy Options toReduce Water Use in Oil and Oil Sands Development in Alberta(Drayton Valley, AB: �e Pembina Institute, 2006),www.pembina.org/pub/612.

87 Suncor Energy, Report to the Community 2007–2008,Opportunities Tomorrow. Performance Today (2008), 17, 19.


89 Suncor Energy, 2009 Summary Report on Sustainability.90 �e ecoENERGY Carbon Capture and Storage Task Force,

Canada’s Fossil Energy Future (Natural Resources Canada,2008), www.nrcan-rncan.gc.ca/com/resoress/publications/fosfos/fosfos-eng.php.


92 Canada rati�ed the Kyoto Protocol on December 17, 2002.(maindb.unfccc.int/public/country.pl?country=CA).


94 Husky Tucker SOR = 14, Average SOR (with Tucker incalculations) = 4.57

95 Probe Research, Albertans’ Perceptions of Oil SandsDevelopment Poll: Part I, Pace and Scale (Drayton Valley, AB:�e Pembina Institute 2007), www.pembina.org/pub/1446.

96 Sarah Jordaan, David Keith and Brad Stelfox. 2009. Quantifyingland use of oil sands production: a life cycle perspective.Environmental Research Letters, 4 (2009) 024004,www.iop.org/EJ/article/1748-9326/4/2/024004/erl9_2_024004.pdf.

97 Pembina compared an application for approval for a new in situoil sands facility against the operating facilities in this report. Onall metrics that could be measured (NOX, SO2, GHG, land useand water use) the project scored in the middle of the pack.

98 Alberta Environment, EnviroVista,www.environment.alberta.ca/867.html.

99 Available at www.albertawatercouncil.ca/Portals/0/pdfs/WPPT%20Policy%20web.pdf

100 Available at www.treasuryboard.alberta.ca/docs/GOA_ResponsibleActions_web.pdf

101 Northwest and Ethical Investments, Lines in the Sand: Oil Sands Sector Benchmarking (Vancouver, BC: 2009),www.ethicalfunds.com/SiteCollectionDocuments/docs/lines_in_the_sands_full.pdf.

102 Ibid.103 Sarah Jordaan, David Keith and Brad Stelfox. 2009.

Quantifying land use of oil sands production: a life cycleperspective. Environmental Research Letters, 4 (2009) 024004,www.iop.org/EJ/article/1748-9326/4/2/024004/erl9_2_024004.pdf.

104 Husky, Shell and Cenovus provided comments. However, thePembina Institute produced the �nal summary. �e companiesconsulted do not necessarily agree with the provided summaries.

105 Canadian Natural has a number of well pads all with di�erentsteam-to-oil ratios.

106 ERCB, Draft Directive: Requirements for Water Measurement,Reporting, and Use for �ermal In Situ Oil Sands Schemes(2009).

107 Cenovus responded that it supports the TRIAD philosophyoutlined in the TEMF, however believes that speci�c numericaldesignation of intensive, extensive and protected areas ispremature prior to a complete analysis of the environmental,economic and social aspects of such land designations.

108 Cenovus Energy, EnCana Christina Lake In-situ Oil Scheme2009 Update, 2009:272, www.ercb.ca/docs/products/osprogressreports/2009/2009AthabascaEncanaChristinaLakeSAGD8591.pdf.

109 �is conclusion is uncertain due to the lack of veri�ablyconsistent data on liquid waste disposal across the projects.

110 Cenovus, personal correspondence, 2009.111 While the Cold Lake Air Weapons range that hosts it has not

o�cially been designated as caribou habitat, there is a nearbyherd, and the Foster Creek project has developed a CaribouManagement Plan for the area.

112 Cenovus, personal correspondence, 2010.113 �is conclusion is uncertain due to the lack of veri�ably

consistent data on liquid waste disposal across the projects. 114 Husky, personal correspondence, 2009.115 Husky, personal correspondence, 2010.116 Husky, personal correspondence, 2009.117 Husky, personal correspondence, 2010.118 Imperial Oil, Cold Lake Approvals 8558 and 4510 2008 ERCB

Annual Performance Review (Calgary, AB: ERCB, 2008),www.ercb.ca/portal/server.pt/gateway/PTARGS_0_0_321_256_0_43/http%3B/ercbcontent/publishedcontent/publish/ercb_home/industry_zone/industry_activity_and_data/in_situ_progress_reports/2008/.

119 ACOS. �ermal In-Situ Scheme Progress Report:HANGINGSTONE DEMONSTRATION PROJECT 2007(2008), www.ercb.ca/docs/products/osprogressreports/2008/2008AthabascaJACOSHangingstoneSAGD8788.pdf.

120 Shell Canada Energy, �ree Creeks 8-11-86-19 W5 UndergroundGas Storage Scheme Requirements – Directive 65 applicationsubmitted to the ERCB, 2009.

121 ERCB, Draft Directive: Requirements for Water Measurement,Reporting, and Use for �ermal In Situ Oil Sands Schemes(2009).

122 Shell, Shell Canada Peace River In Situ Expansion: CarmonCreek Project (2009), 17, www-static.shell.com/static/can-en/downloads/aboutshell/our_business/e_and_p/carmon_creek_disclosure_mar16_09.pdf.

123 Suncor Energy, 2008 ERCB Annual Review Suncor Firebag(2008), www.ercb.ca/docs/products/osprogressreports/2008/2008AthabascaSuncorFirebagSAGD8870.pdf.

124 Alberta Conservation Association, www.ab-conservation.com.