Oilsands alliance sets water use goals, but GHG targets proving tougher

CALGARY – A group of oilsands companies has set its first environmental performance target by limiting the use of fresh water in oil production, but goals for cutting greenhouse gas emissions have proven much more complicated.

Members of the Canadian Oil Sands Innovation Alliance — an organization through which 13 oilsands players aim to make the industry greener — said Tuesday they have agreed to halve the amount of fresh water used to produce a barrel of crude from steam-driven projects to 0.2 barrels by 2022.

It’s COSIA’s first target involving specific numbers and deadlines since its inception in early 2012.

COSIA provides legal frameworks that enable oilsands companies to share their intellectual property for environmentally friendly technologies without stifling competition.

In addition to cutting water use, COSIA members are focusing on technologies that would reduce the industry’s impact on land, help manage tailings waste and cut greenhouse gas emissions.

“It’s the kind of thing that you want to get right rather than do quickly,” said COSIA CEO Dan Wicklum.

COSIA is “probably a small number of weeks or months away” from announcing targets for reducing land disturbance and tailings ponds that hold huge volumes of oilsands waste.

And it’s still “working diligently” on the greenhouse gas element, though that’s taking longer than other areas.

“I think it is more difficult to put together,” Wicklum said.

“There’s a global debate around GHGs. There’s not a global debate around tailings. So I think it’s tied up with regulation and policy and a global debate, which adds an added degree of complexity for that file.”

Greenhouse gasses are emitted in various parts of the development process, so it’s tougher to separate environmental technologies that can be shared through COSIA from ones that would give companies an economically competitive edge, he added in an interview.

That’s not to say COSIA members haven’t been working on cutting carbon emissions while the legal framework is being hammered out, the bosses of two major oilsands operators said.

“It’s actually one of the top priorities,” said Shell Canada president Lorraine Mitchelmore.

For instance, Shell aims to start up its Quest carbon capture and sequestration project next year. That project, partly funded by the Alberta and federal governments, would prevent 1.2 million tonnes of carbon dioxide from Shell’s Scotford oilsands upgrader near Edmonton from escaping into the atmosphere by storing the gas underground.

Shell spent about $27 million on COSIA projects in 2014.

“When we look at our budget, that is sacred,” she said.

COSIA members have agreed their emissions performance should be better than producers of conventional oil, said Suncor CEO Steve Williams. Some of the newer oilsands projects are already achieving that goal.

Amin Asadollahi, oilsands program director at the Pembina Institute, an environmental think-tank, said he’s encouraged by COSIA’s work.

“However, a lot more needs to be done,” he said.

Asadollahi describes COSIA as a “black box” that doesn’t publicize enough information for it to be held accountable. He also said members should also stop opposing tougher regulation if they want to make a difference on the environmental front.

Governments need to step up to the plate, too, Asadollahi said.

“COSIA in itself cannot do this,” he said. “We would like to see government sending the right signal and the right level of incentive required for industry to reduce its emission intensity.”

Currently, COSIA members are sharing 777 technologies costing more than $950 million. This year, 68 projects with a cost of more than $200 million were started.

“If there’s a difference from ’14 to ’13, I would say that real stuff is getting done now,” said Williams. “So we’ve moved from the tremendous challenges we’ve had from aligning fiercely competitive companies to actually getting stuff done.”

Suncor spent $18 million on COSIA technology in 2014 and that’s expected to rise next year.

Mitchelmore said there’s a perception that COSIA is only making progress in “baby steps.”

“Well, I would say to put 13 companies together, it truly is an incredible feat and to do that in such a short time frame, I would say it’s giant steps.”

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