Environmental scientists take on the opportunity to effect significant change from within

� Retrofitting compressor engines to reduce emissions

New water monitoring plan for Athabasca

Getting recognized for land stewardship

An environmental supplement to

THE UNCONVENTIONAL OIL AUTHORITY

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JUNE 2011ENErgy’s NEw ENviroNmENt

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“I didn’t come to Fort McMurray [Alberta] for the money. I thought I could have a posi-tive impact on reducing the environmental footprint of our [oilsands] operations.”

And she has. Christine Daly is Suncor Energy Inc.’s wetland reclamation research coordinator, and she is part of the team that in September 2010 celebrated the successful remediation to a solid sur-face of the first tailings pond in the oilsands industry. What was once a 220-hectare waste dump has become a fledgling natural space, part forest and part wetland. And Daly helped create it.

Her work is an example of what may be a surprise to some—that environmental scientists are an important part of Big Oil. As Mount Royal University describes its Bachelor of Applied Science—Environmental Science:

“Elevated interest and concern for the environment has not been ignored by industry. With your knowledge of environmental science, you can guide companies and government in green practices—preventing pollution, reducing waste, appropriate use of energy, materials and natural resources.”

It is a practical approach to being green. Rather than fighting fossil fuels, there are those who see an important role for themselves in contributing to the improvement of an industry projected to remain central to global development for many decades to come.

Notes Amberly Dooley, who works in thermal regulatory affairs with Devon Canada Corporation’s environment, health and safety team, “The world needs the oil, so I’ve always said the key to ensur-ing environmental change is to enact change from the inside.”

~ Deborah Jaremko

� 2B� Envirobytes

� 4B� Inside�Big�Oil Environmental scientists take on the opportunity to effect

significant change from within By Jim Bentein

�11B� Retrofitting�compressor�engines�to�reduce�emissions

Cenovus Energy receives new funding from the Climate Change and Emissions Management Corporation By Melanie Collison

13B New�water�monitoring�plan�for�Athabasca Environment Canada releases its proposed strategy for the heart of the oilsands By Elsie Ross

15B Getting�recognized�for�land�stewardship Imperial Oil Cold Lake becomes the first upstream oil and gas site in Canada certified by the Wildlife Habitat Council By Melanie Collison

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SCOTFORD UPGRADER AMINE UNIT & COMPRESSOR

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HYDROGEN UNIT

envirobYtesA Canadian patent has been issued for a method to store variable wind and solar power as heat in heavy oil formations, assigned to PyroPhase, Inc.

Presently wind and solar power amount to less than two per cent of U.S. total electric generation because they require costly backup plants to supply power when wind and solar are not available.

The new method can use variable and off-peak power because it stores radio- frequency energy as heat in heavy oil forma-tions. It reportedly converts this resource to fuel for refineries in amounts five times the electric energy input. PyroPhase says that a 10,000-barrel-per-day plant using the tech-nique could be built in four years at a cost in the order of $100 million, including $5 million for pilot development and $20 million to scale up to commercial module size.

Countries must put a sufficient price on car-bon dioxide emissions to drive technological development of carbon capture and storage (CCS), says a manager with a Royal Dutch Shell plc subsidiary.

“Without that price, we are not going to drive some of these technologies—CO 2 CCS particularly,” said Kim Corley, vice-president of environment and regulatory with Shell Upstream Americas.

Speaking in Calgary at a Conference Board of Canada business forum, Corley was refer-ring to the carrot-or-stick approach to induce emitters to curb greenhouse gas emissions. In the United States—the world’s largest emit-ter—industry can emit unlimited CO 2 volumes without financial penalty.

“And even in places where there are prices, [they are] insufficient to drive this technology,” Corley said, noting the price for industrial CO 2 emissions under the European Union Emission Trading Scheme is US$24 per tonne. In Alberta, large CO 2 emitters pay a $15-per-tonne fee to the province.

Corley said most of the estimates she has seen—such as those prepared by the Massachusetts Institute of Technology—say the price of carbon emissions must exceed US$100 per tonne for CCS to work. “So clearly we’re not there, even in the places where we do have a price for CO 2.”

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Shell Canada is advancing a CCS project at its Scotford upgrader called Quest. The process is detailed here. First CO2 is captured from the amine units, next the CO2 is processed using an amine scrubber, then dehydrated and compressed for pipeline transport, then pipelined to a deep saline aquifer for storage.

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A draft regional plan for the lower Athabasca region would revoke some existing oilsands land tenures in the cre-ation of what Mel Knight, Alberta minis-ter of sustainable resource development, describes as “significant footprint areas” for conservation. The plan establishes five new conservation areas and 10 new rec-reation areas, and would place approxi-mately 16 per cent of the region’s land

base under protection.A total of 10 oilsands leases and 14

mineral leases would be affected in the draft plan, which provides a blueprint for conservation and economic development in northeastern Alberta. “We feel we are putting out a plan that has made some choices,” Knight told a news conference as he released the draft plan for consultation. “The choices that are made here are to bal-ance human activity and the protection of Alberta’s landscape.”

The plan was released in mid-April. Following 60 days of consultation, the government will then incorporate that information into the final plan, which will go to cabinet.

Oilsands plant sites will now be covered under new government of Alberta reclamation rules, and a lower amount of security will be required during mines’ early and mid-lives while a higher amount of total security will be required than under the current approach. The government says that over the long term, the total security amount collected will be considerably higher than with the previous approach.

In an effort to provide greater transparency and consistency of reporting, government is also boosting the number of milestones used to track reclamation. Previously, only three reporting milestones were used: disturbed, reclaimed and certified. Recognizing that reclamation occurs over long periods of time and goes through many stages, eight milestones will now be used by both the province and industry.

Nearly three-quarters of Quebecers (71 per cent) polled in a recent survey consider the develop-ment of Alberta’s oilsands to be desirable, as long as a consistent effort is made to limit the environmental impact. Another seven per cent were in favour of maximum economic develop-ment of the oilsands in the poll, which was conducted by léger Marketing and commissioned by the Montreal Economic Institute as part of its Plea for a Quebec-Alberta Dialogue.

The survey also found that 62 per cent of Quebecers believe their province could profit from the technical expertise of Albertans the development of oil and natural gas. Quebec plans to conduct an environmental assessment of shale gas development in the province.

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airwaterland.ca | 3B

c hristine Daly never expected to be working for Suncor Energy, Inc., or any oilsands company, for that matter. The 31-year-old, who holds a bachelor’s degree in environmental science and a

master’s degree in biological sciences from the University of Windsor, was raised in Tecumseh, Ont. Her expectation was to conduct research on the great lakes for most of her life, but a summer working for Suncor changed her path, leading her to embrace an opportunity to effect change from inside industry.

“After I completed my bachelor’s degree, I had the option of taking a summer job doing great lakes research or doing oilsands reclamation and wetlands work,” Daly explains. “That was in the summer of 2004. I had never heard of the oilsands before that.”

That summer, she was involved in developing aquatic ecosystems using oilsands mine waste products, and found the work to be much more fulfilling than she had expected.

“I didn’t come to Fort McMurray [Alta.] for the money. I thought I could have a positive impact on reducing the environmental footprint of our operations,” Daly says. “In June of 2007, I was hired by Suncor as its wetland reclamation research coordinator.”

About 50 per cent of Suncor’s lease area was wetland before being disturbed by mining, most of it being fen wetlands featuring muskeg and trees such as black spruce.

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By Jim Bentein

airwaterland

4B | Oilsands Review Supplement June 2011

“Most people thought it would be impossible to reproduce areas like that because it took thousands of years for them to develop,” says Daly. “No one has ever done this research before. But we’ve developed fen wetlands from scratch.”

The work is complex, since all the pieces need to be designed as if nature had done so, including the crucial intersection between the groundwater system and the wetlands, all along relying on a base of mining waste products.

There are six professionals in Daly’s group, including a social scientist, a wildlife biologist and a forester.

“We all come from different parts of Canada, but we all share a pas-sion for the environment. We all see a lot of hope in the resilience of Mother Nature.”

The department works with experts from universities throughout North America, who Daly says have developed a respect for Suncor’s commitment to the environment. She admits she once had doubts about the company’s sincerity.

“I was a skeptic. When you’re in university you think you can’t work for industry because they’re the bad people. But my mind has definitely changed.”

Mark Berrett, an environmental compliance officer with Cenovus Energy Inc., which has launched an ambitious plan to ramp up in situ

production to net rates north of 350,000 barrels per day by 2019, took a circuitous route to end up in the environmental field with an oil and gas company. Berrett first attended the Southern Alberta Institute of Technology, receiving a two-year diploma in television production.

While the 27-year-old enjoyed the program, he wasn’t able to find a job in the field. That led to him finding work at a natural gas processing plant in southeastern Saskatchewan, where he worked for a year and a half. Berrett was hooked by the oil and gas business, and decided to go to Olds College, where he took a diploma in land reclamation.

“I liked working in the field, so I thought that would be a good move,” he says, adding that there is a family connection to the energy sector. “My dad is involved in joint ventures in the oil and gas industry.”

Berrett has worked for Cenovus and predecessor company Encana Corporation for the last four years, and is now assigned to the Christina lake steam assisted gravity drainage (SAgD) project.

“[Christina lake] was producing 5,000 barrels per day when I started, is now producing 18,500 barrels daily and is going to eventually be pro-ducing 200,000 barrels per day.”

Berrett, who lives in Medicine Hat, Alta., commutes to the plant site, where he lives in a camp and works four days a week. His daily job involves surface water management, emissions testing, tracking wildlife and monitoring waste streams.

“ When you’re in university

you think you can’t work for

industry because they’re the

bad people. But my mind

has definitely changed.”

“We [the environmental team] are

not seen as a liability. We’re a key

part of the operation.

Christine DalyWetland Reclamation Research Coordinator, Suncor EnergyPhoto: Suncor Energy

Mark BerrettEnvironmental Compliance Officer,

Cenovus Energy Photo: Cenovus Energy

>

”

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“It’s meaningful work. We have a good group of people and we’re building a good foundation. We have a great opportunity to influence a lot of change.”

Berrett says that he has no moral qualms about working for Cenovus.“We [the environmental team] are not seen as a liability. We’re a key

part of the operation.”Tony Jackson, group lead of environmental operations and assess-

ment for Cenovus, shifted from the forestry sector to the oil and gas busi-ness. The 37-year-old, who grew up just south of Calgary in High River, Alta., was one of the first graduates of the then-new environmental con-servation science program at the University of Alberta in 1997.

“They added the course to the traditional agricultural and forestry program,” Jackson explains, adding that there was a concentration on soil sciences and other studies that proved to be invaluable in his subse-quent career.

His first job was with the environmental consulting division in the Edmonton office of EBA Engineering, Inc.

“My job was conducting reclamation assessments of oil and gas wells.”About five years with EBA was followed by a job as a consultant

responsible for overseeing the reclamation of about 150 wellsites at one time. Jackson joined Cenovus predecessor Encana in December 2003.

“Now I handle 600 to 700 [well] sites,” he says. “We have a group of about 10 people. Our role is to get those sites certified. We work with our regulatory staff, working on environmental impact assessments and regulatory approvals.”

No one should doubt that the regulatory regime in Alberta is thor-ough, Jackson says.

“you need to comply with about 800 different regulations. For Foster Creek and Christina lake there are 43 pages of things we need to do every day.”

Jackson says he believes that Cenovus “walks the talk” when it comes to the environment. “Nobody is complaining about the money we spend on environmental monitoring because they know it has to be done.”

Amberly Dooley is still in her late 20s, but she has both strong aca-demic and practical work experience in the environmental field in the oil and gas industry. Although a committed environmentalist, she has no qualms about what she does for a living at Devon Canada Corporation, where she works in thermal regulatory affairs with the company’s en-vironment, health and safety team.

“The world needs the oil, so I’ve always said the key to ensuring environmental change is to enact change from the inside,” says Dooley, who has a bachelor’s degree in applied science in chemical engineering, with an environmental option from the University of British Columbia. She grew up in Cranbrook, B.C.

After graduation in 2005, Dooley travelled to Europe for the summer, then joined Imperial Oil limited, working as an environmental adviser on its Cold lake in situ oilsands project. She worked for Imperial Oil until last summer, when she joined Devon, which is ramping up its in situ oil pro-duction at its wholly owned Jackfish projects and its 50 per cent–owned Kirby-Pike project (along with partner BP p.l.c.).

“Devon is a smaller company [than Imperial], and I was looking for an opportunity to get involved on the strategy side,” Dooley says, add-ing that she has been impressed with the company’s flexibility and its

Tony JacksonGroup Lead, Environmental Operations

and Assessment, Cenovus EnergyPhoto: Cenovus Energy

“ Nobody is complaining

about the money we spend

on environmental monitoring

because they know it has to

be done.”

“The world needs the oil, so I’ve

always said the key to ensure

environmental change is to act

from the inside.”

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6B | Oilsands Review Supplement June 2011

corporate culture. “Devon has always been a strong advocate of doing the right thing.”

She is particularly proud of Devon’s use of non-potable source water for SAgD steam generation.

“We were responsible for the first commercial application of that. It would certainly be cheaper to drill into shallower freshwater sources, but using that [brackish] water is the right thing.”

Dooley says that one of the biggest challenges in situ operators face is that, unlike with oilsands mines, wildlife continues to use the disturbed land during production.

“It’s just assumed that deer won’t go into a mine pit, but during our operations we’re expected to not cause harm to wildlife.”

Impact assessment is a crucial part of her work, done through com-puter modelling as well as frequent field sampling.

Chris Walsh, project coordinator for Devon’s Kirby-Pike project, has a forestry background, like many in the land reclamation sector in the oil and gas business.

“I grew up in Sheet Harbour, Nova Scotia, and my whole family was involved in forestry,” says Walsh, who moved to Alberta in 1985 after obtaining a forestry diploma in Nova Scotia, followed by a forest tech-nology diploma at the Northern Alberta Institute of Technology.

After a career in forestry, Walsh, who is in his 40s, shifted to the oil and gas sector, first working for a grande Prairie–based consulting firm.

He then established his own consulting firm, specializing in land man-agement and reclamation. One of his key clients was Ulster Petroleum ltd., which was eventually sold to Anderson Exploration ltd., which, in turn was purchased by Devon in 2001.

Walsh continued to do consulting for Devon, until he joined the com-pany as an employee last spring. He says an important aspect of the in situ operations he is involved with is the use of a new well placement technique designed to reduce the physical footprint.

“We are drilling one vertical and four slant wells from half-acre well-sites. This has never been done before with SAgD,” he says, adding that the technique will allow Devon to drill underneath some small lakes on the site.

Walsh grew up hunting and fishing and now does some trapping, and says his appreciation for the environment does not conflict with his work.

“The forestry industry has a good reputation for minimizing its impact on the environment, and I’m very comfortable working for an oil and gas company.”

As a senior manager responsible for the environmental performance of Norway-based Statoil’s Canadian operations, Michel Myhre-Nielsen feels an obligation to live up to the company’s reputation as a leader in environmental performance among global oil companies.

That reputation was put at risk when Statoil, which has been a leader in the development of carbon capture and storage (CCS) technology and renewables such as wind power and geothermal energy, as well as in emis-sions trading, announced in 2007 that it was entering the Canadian oilsands industry through the purchase of North American Oil Sands Corporation.

The global firm is now progressing in situ production at its Kai Kos Dehseh project, which commenced production in January and ultim-ately could produce more than 200,000 barrels per day. Those plans have led to a storm of opposition from environmental groups. Facing that challenge—literally from the ground up—was the job handed to Myhre-Nielsen.

Amberly DooleyThermal Regulatory Affairs, Devon EnergyPhoto: Devon Energy

Chris WalshProject Coordinator,

Kirby-Pike, Devon EnergyPhoto: Devon Energy

“I’m very comfortable working for an

oil and gas company.

>

”

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airwaterland.ca | 7B

“My previous work with the company was focused around cli-mate change in general and the oilsands is more CO 2 intensive, which is one of the reasons I came to Canada,” says the Norwegian-born Myhre-Nielsen.

Now manager of environment and climate within Statoil Canada’s health, safety and environment department, the 40-year-old, who has a master’s degree in science with an engineering specialty, began his career at the company working as a chemical engineer working on gas processing issues.

“I was involved with our renewable energy projects and in CO 2 cap-ture and storage,” he says. “I was engaged in looking at new ideas to see if they were interesting to us.”

Myhre-Nielsen, who moved to Canada in 2008, sees nothing incon-sistent between his work in renewable energy and CCS and his current oilsands job.

“My environmental expertise is around the climate change area. Because we are in the fossil fuel business, CO 2 is produced, so it’s im-portant to be able to limit that production as much as possible.”

Ultimately, he says that the world needs fossil fuels, something too many environmental organizations fail to acknowledge.

“They have a different view of the future, and we can never agree on that. However, we need to show respect for their views.”

While he recognizes environmental organizations have a role to play, Myhre-Nielsen has chosen to reduce the environmental footprint of the energy industry from the inside.

“It’s better to be within the industry and to try to ensure it is mov-ing in the right direction. There will always be a balancing act when we develop resources, whether they’re renewables or fossil fuels.”

Erin Davies, who grew up in Fort Saskatchewan, Alta., also works for Statoil as an environmental engineer, but she took a much different path than Myhre-Nielsen, although there’s also a Scandinavian connec-tion—she graduated with a master’s in environmental science from lund University in Sweden. That was in 2005, after the 31-year-old had com-pleted a bachelor’s in science and chemical engineering at the University of Alberta.

Davies, a professional environmental engineer, recently joined Myhre-Nielsen’s environment and climate team after previously working in regulatory affairs with Statoil.

She worked with an environmental consulting firm before joining Statoil, and has developed an understanding of the environmental impact of the firm’s oilsands projects that she thinks qualifies her to argue that the company walks the talk about its concern for the environment.

“I was a member of a team of five to eight people that prepared the Environmental Impact Assessment [EIA] for the projects. It was

Erin DaviesEnvironmental Engineer, Statoil CanadaPhoto: Statoil

Bill ArlingManager of Corporate Environment, NexenPhoto: Nexen

“ I never

thought I’d

be working

in the oil and

gas sector,

but I changed

my opinion.”

“It’s better

to be within

the industry

and to try

to ensure it

is moving

in the right

direction.

“You can work from the outside in the

advocacy role or in academia, or you can

work in the practical world, which is in

industry, trying to find practial solutions.”

”

Michel Myhre-NielsenSenior Manager, Environmental Performance, Statoil CanadaPhoto: Statoil Canada

airwaterland

8B | Oilsands Review Supplement June 2011

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unprecedented for a company to do the EIA for a demonstration-size and commercial facil-ity [together]. Our approval is for right up to 80,000 barrels daily.”

In her new job with the company, that ex-perience will be invaluable, since she will play a key role in environmental monitoring and answering questions from government reg-ulators around such areas as sulphur diox-ide emissions, surface water issues and land disturbance.

Davies is convinced it is important for people with a commitment to the environ-ment to work in the oil business.

“When I graduated in Sweden, I never thought I’d be working in the oil and gas sec-tor, but I changed my opinion. One thing that changed my mind is that Statoil has a good rep-utation. Also, Norway has a good reputation as a country that cares about the environment.”

Bill Arling, manager of corporate environ-ment for Calgary-based Nexen Inc., needs to be kept abreast of growing government and public concerns about the energy industry’s impact on the environment. like other environ-mental scientists working inside industry, he’d rather be on the inside than outside looking in.

“you can work from the outside in the advocacy role or in academia, or you can work in the practical world, which is in industry, try-ing to find practical solutions,” says Arling, 44, who graduated from the University of Calgary in 1996 with a bachelor’s of science degree, with a specialty in industrial ecology.

He joined Nexen—operator of the long lake in situ oilsands project—in 2004, after previously working for a utility. In his current role, Arling works with several international energy industry bodies, helping to provide pol-icy guidance and support to Nexen divisions across the world when they confront environ-mental issues.

He communicates frequent ly with groups such as the Canadian Association of Petroleum Producers, the International Association of Oil and gas Producers and the International Petroleum Industry Environmental Conservation Association.

When there is an environmental incident such as a hydrocarbon or water spill, Arling swings into action, helping to find contractors that can deal with the problem, as well as help-ing local employees deal with regulators and taking other actions.

He encourages young, bright people to consider going into the field of environ-mental science.

“The world is challenged with a number of environmental issues and a lot of atten-tion is being given to industrial activities worldwide, so there are many opportunities in the area.” awl

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11THINGS TO WATCH

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STreNGTHeNING INduSTry

Talking SAGD with one of Korea’s biggest engineering and construction firms

The storm clouds are starting to fade for Canadian module fabricators

Why a new export market isn’t the only critical reason for the Northern Gateway pipeline

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THE UNCONVENTIONAL OIL AUTHORITY :: MAY 2011 :: $10

Why the U.S. says now is the time to revamp oil shale rules and plans

India prepares to grab a chunk of the oilsands action

The limited success of very early in situ production methods

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• the first word on oilpatch innovation

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By Melanie Collison

O ne of the most significant players in the oilsands industry is also among Canada’s largest natural gas producers—and enhancing efficiency and reducing greenhouse gas (gHg)

emissions is an investment for both plays. While it continues a number of projects at its oilsands sites, Cenovus

Energy Inc. is in the midst of pulling together a project team, finalizing the engineering details and scripting a schedule to begin a $10.7-million project to slash gHg emissions from its natural gas operations.

The result of the project—a retrofit of the aging natural-gas fired engines that power the compressors that fill its natural gas sales pipe-lines—will be equipment with the efficiency rating of a new fuel-injected engine. Cenovus is also going to install piping to capture fugitive emis-sions to use as fuel.

Taking some of the sting out of the expenditure, the company has garnered $3.6 million in funding—approximately one-third of the gross cost of the project—from the Climate Change and Emissions Management Corporation (CCEMC) in its second round of allocating funds generated by levies on industrial carbon emitters.

The “engines and compressor emissions control project” will upgrade natural gas compression facilities at 37 sites Cenovus operates in Alberta.

In approving the Cenovus application, CCEMC pegged the antici-pated CO2-equivalent emissions reductions at about 19,980 tonnes per year, but Cenovus is actually forecasting reductions closer to 50,000

tonnes per year. That equates to a total of about half a million tonnes in reduced emissions, says Dave Hassan, the company’s team lead for environmental technology investments.

There are two parts to the retrofit, the systems for both of which are manufactured by REM Technologies Inc., a subsidiary of Spartan Controls Inc.

REM stands for reciprocating equipment management. The com-pany specializes in developing technology to optimize the fuel usage and reliability of reciprocating compressor engines used in upstream oil and gas.

The first piece of equipment for the Cenovus project is a comput-erized air/fuel ratio controller. This is bolted onto a natural gas-fired reciprocating engine that powers the compressors, which boost a low-pressure natural gas stream from the incoming 10 to 50 pounds per square inch to the 1,100 pounds per square inch required in a sales pipeline.

“A lot of these big industrial engines will run almost forever,” Hassan says. “They require continued maintenance, and overhauls at some point, and you may need to replace the pistons and re-machine the heads and cylinders, but you rebuild them and put them back in service.”

Replacing an engine could cost around $700,000. An air/fuel ratio controller would come in at approximately $150,000 and is expected

Retrofitting�compressor�engines�to�reduce�emissions�Cenovus Energy receives new funding from the Climate Change and Emissions Management Corporation

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to make even aging engines function with as high a degree of energy efficiency as today’s fuel-injection engines.

“The air/fuel ratio controller lets the engine that drives the compres-sor run a little bit smarter,” Hassan says. “A lot of these machines are decades old. Compare it to a car engine, an old carburetor [model] ver-sus a new fuel injector with a built-in computer. The [add-on] manages the fuel/air mixture to optimize the ratio according to the horsepower the compressor needs to put out. Depending on the age of the engine, you might see fuel savings of up to 10 per cent or more.”

The newer the engine, the less dramatic the improvement, so Hassan expects the average energy efficiency gain to be around five or six per cent.

The second technology Cenovus will employ is a system to capture fugitive natural gas that inevitably leaks out around the rings in a recip-rocating engine.

“[The] vent gas capture equipment captures that escaping gas and redirects it back to be fuel for the engine,” Hassan says.

Cenovus expects to reduce fuel gas use by 10 per cent to 25 per cent on a primary engine by combining the air/fuel ratio controllers and vent gas capture.

When they’re used together, the technologies provide the same level of engine speed control regardless of the volume and composition of the fugitive emissions available. These emissions can vary widely in compo-sition and can include toxic benzene, toluene, ethylbenzene and xylene compounds that are normally vented.

given that a typical 1,200 horsepower engine burns about $500,000 worth of fuel a year, payback time from capturing and burning the fugi-tive emissions can be very short.

To execute the project, Cenovus is drawing on funds Encana Corporation decided to begin setting aside for energy efficiency projects a couple of years before it calved Cenovus off into a separate entity in 2009. CCEMC also gave Encana funding in this round—$2.4 million—for vent gas capture for engine fuel use.

Cenovus is happy with the performance of the REM air/fuel ratio con-trollers it has installed over the years, Hassan says, and is using technical reports from CETAC-West and Petroleum Technology Alliance Canada (PTAC) to inform its vent gas capture project, along with in-house tech-nical expertise.

CETAC-West was established in 1994 by Environment Canada as a pri-vate sector not-for-profit organization with the purpose of helping small-and medium-sized enterprises commercialize environmental technologies.

Along the way it has made an industry-changing specialty of fuel gas management, with the two-fold purpose of saving fuel gas and reducing greenhouse gas emissions.

In developing a suite of best management practices to conserve fuel gas, CETAC-West determined the industry’s fuel gas consumption cur-rently equals 12 percent of annual gas sales. CETAC-West was instrumen-tal in generating industry interest in REM’s technology by sponsoring field demonstrations through its Unleashing Innovation program.

PTAC has participated in studies evaluating REM technology efficacy for nearly a decade. PTAC is a not-for-profit organization that facili-tates collaborative research and technology development in the carbon energy industry.

Both of the REM technologies that Cenovus will use were designed for retrofitting compressor equipment in the field. It was a design prior-ity to ensure the least possible downtime during installation to minimize clients’ production losses.

The vent gas capture piping, for example, can be installed while the engine is still in service, Hassan says. Still, even though a lot of the work can be done ahead of time, each engine is expected to be out of com-mission for two to five days.

“We’re trying to figure out how to plan our installations while we’re doing scheduled maintenance to minimize downtime and minimize pro-duction loss,” Hassan says. “That’s one of the big challenges, trying to schedule everything around our planned maintenance schedule. It will likely add a couple of days onto the planned maintenance because they can’t do everything in parallel.”

Hassan’s team will do the project planning and approvals, then pass the project to an implementation team.

“They will draw on project teams in the actual areas where the com-pressor is operating. We’ll also use external contractors and engineering houses.”

CCEMC has scheduled the announcement of its next round of fund-ing recipients for June. It is now supporting 22 projects at all stages of innovation with a total planned investment of more than $98.2 million.

Cenovus’ retrofit of the aging natural-gas fired engines that power the compressors that fill its natural gas sales pipelines will result in equipment with the efficiency rating of a new fuel-injected engine.

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12B | Oilsands Review Supplement June 2011

water

A new surface water quality monitoring program for the lower Athabasca River in the heart of Alberta’s largest oilsands region released in March by federal Environment Minister

Peter Kent will be incorporated into the work of a revamped provin-cial monitoring program, says the province’s environment minister.

“Although this work is a good starting point, physical monitoring of water is only one piece of the overall system needed,” Rob Renner says. “We need to build on this plan to develop a system that is robust, verifi-able, transparent and governed appropriately. Most importantly, it must be credible, which is exactly what Alberta’s independent provincial moni-toring panel is working on.”

The panel, co-chaired by Hal Kvisle, former chief executive officer of TransCanada Corporation, and Howard Tennant, former University of lethbridge president and vice-chancellor, is to report back to Renner with initial recommendations in June on developing a “world-class” monitoring system.

“This plan is the first step towards an improved surface water moni-toring program,” says Kent. “This will take time, but we are on track, and are committed to getting it right. Our monitoring, research and other actions rise to the challenge of protecting the environment and ensuring the responsible development of the oilsands.”

Kent says that the development of the oilsands is key to Canada’s economic prosperity and energy security.

New�water�monitoring�plan�for�AthabascaEnvironment Canada releases its proposed strategy for the heart of the oilsands By Elsie Ross

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“Developing this important resource can be done in an environ-mentally responsible manner provided that science and technological innovation are brought to bear on the issue. We are confident that we can protect the environment while seeing the economic benefits of the oilsands.”

Created in collaboration with Alberta, the federal scientific plan is in response to the report of the federal oilsands advisory panel which was struck in September 2010 to review the environmental monitoring systems of the Athabasca River Basin. In its report, the advisory panel called for the development of a scientifically-credible water monitoring system that will provide assurance to Canadians about the environmental performance of the oilsands industry. The panel noted that Environment Canada, as a trusted science organization, is well equipped to lead in the design, imple-mentation and scientific oversight of such a monitoring system.

Following the release of the report in December, John Baird, acting environment minister, appointed a scientific team to come up with a water monitoring report within 90 days.

The lower Athabasca water quality monitoring program plan high-lights the need for water quality measurements to be taken more fre-quently, and in more places, which will ensure there is sufficient data available to track possible changes, says Kent. It also emphasizes the need for the monitoring program to be linked to other monitoring sys-tems, such as air quality and biodiversity, to ensure a holistic view of environmental quality and work is already underway in those areas.

The plan will promote the use of an approach designed to allow for the continuous improvement of monitoring and data interpretation. In order to monitor long-term changes and maintain environmental quality within defined levels, it will assess the cumulative effects of oilsands activities.

The plan also promotes transparency and all data will be publicly available.

The first phase of the plan deals with surface water quality monitor-ing in the main stem of the Athabasca River and its major tributaries between Fort McMurray and the Wood Buffalo National Park bound-ary and focuses on the physical and chemical attributes of water quality.

At present, both the provincial and federal governments cur-rently monitor water quality in the lower Athabasca, industry moni-tors water as a condition to operate and there is additional monitoring

by the industry-funded Regional Aquatic Monitoring Program, the plan notes. However, it says there is a lack of integration and several recent reports found the current monitoring system did not deliver data of suf-ficient quality or quantity to detect or quantify the effects of oilsands development.

The federal report, though, acknowledged that past monitoring activ-ities have yielded data at some sites and during some time periods that will be critical to the optimal functioning of the new monitoring plan.

The federal water quality monitoring plan was subject to peer review and the reviewers believe the plan has sufficient technical detail to respond to the call for comprehensiveness, scientific rigour, adaptive-ness and transparency, says Elizabeth Dowdeswell, who chaired the peer review process.

She also emphasized the need for monitoring systems to be inte-grated over a broader appropriate geographic area and to include air quality, wildlife and water quantity.

“If these additional elements are delivered with the same compre-hensive approach and attention to scientific rigour that I experienced as part of the current water quality monitoring plan, and if they are imple-mented according to the principles enunciated above, then we should have a comprehensive world-class environmental monitoring system for this region,” Dowdeswell said in a statement.

Jennifer grant, director of the Pembina Institute’s oilsands program, wel-comed the report, which she described as a “good step” toward providing a credible foundation for the monitoring of the Athabasca River downstream from the oilsands. “We hope this plan signals that the federal government is willing to meet its obligations to ensure that oilsands development occurs responsibly and in accordance with Canadians’ expectations.”

grant also suggests that the environmental assessment for Total E&P Canada ltd.’s Joslyn mine was premised on the insufficient data referred to in the federal report. On that basis, it would be prudent to delay approval of the project until sufficient data has been collected to assess the level of impact of oilsands development on the Athabasca River, she said.

While an effective monitoring system is a necessary component of responsible management of oilsands development, monitoring alone is not sufficient, grant says. “It is now time for the government of Canada to outline a plan for how regulation of the oilsands industry will be improved.”

“ Developing this important resource can be done in an environmentally responsible manner provided that science and technological innovation are brought to bear on the issue. We are confident that we can protect the environment while seeing the economic benefits of the oilsands.”

—Environment Minister Peter Kent, Government of Canada

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14B | Oilsands Review Supplement June 2011

G enerations of lynx, moose, deer, fox and bear have come to take Imperial Oil’s in situ oilsands installation at Cold lake, Alta., for granted.

Four production plants and four field facilities dot the lease. Production and steam pipeline pairs wind through the forest carrying steam to, and heavy oil from, its thermal operation, which is one of only two plants of its kind to have been in operations since the 1980s—more than one billion barrels have been produced.

Sketched into the transition zone from aspen parkland to boreal mixed-wood forest, the Cold lake project is a 780-square-kilometre lease that is home to many species of wildlife that appear accustomed to the energy infrastructure.

“They’re definitely habituated to the [built] landscape,” says environ-mental adviser Courtney Blackmore, a biologist who came on board almost two years ago as wildlife lead on Imperial’s habitat protection programs. The company also has environmental advisers on the conser-vation and reclamation side managing wildlife effectiveness programs. “People have seen foxes and coyotes curled up on the pipeline for a snooze because it’s warm.”

Adds Keith Chiasson, Imperial’s operations manager for Cold lake, “I saw a moose today nosing around our site. We are steward to a pretty large amount of wildlife habitat.”

Imperial Cold lake has made headlines by becoming the first upstream oil and gas site in Canada ever to win Wildlife at Work certifi-cation from the Wildlife Habitat Council (WHC).

Established in 1988, the WHC is an international non-profit organ-ization focused on restoring and enhancing wildlife habitat, protecting biodiversity and educating communities. It works with corporations to translate their sustainability goals into tangible actions.

Collaboration with WHC begins with a site visit. “Two PhD biologists do a report on how to enhance your site,” explains Blackmore. “you choose a couple of [priorities], then apply and work on certification. With our sheer land mass, pine and spruce trees and beautiful wetlands, they were in awe that we had this much space and were doing positive things with it.”

ExxonMobil, 70 per cent owner of Imperial Oil Corp., has been a member of the WHC since the organization’s inception.

By Melanie Collison

Getting�recognized�for�land�stewardshipImperial Oil Cold Lake becomes the first upstream oil and gas site in Canada certified by the Wildlife Habitat Council

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While joining the WHC may have been a corporate decision made by Imperial’s parent company, the Canadian branch of the global super-major credits its people on the ground for its operational success, for years enthusiastically monitoring wildlife and taking care of the habitat.

The workforce, currently nearly 400 employees plus 1,000 contrac-tors, amounts to about 10 per cent of the population of the city of Cold lake, a half-hour drive from the field. Three-quarters of the employees have grown up in the area, where outdoor recreation is a big part of life.

“People have an innate interest in wildlife,” Blackmore says. “In the lunchroom, people are always talking about what moose or lynx they saw in the morning. We have people with tracking experience, and aboriginal people who have lived on the land their entire lives.”

From the various plants and field units, Blackmore has recruited 12 departmental representatives—including two Imperial PhD biologists—to be her wildlife team. They champion wildlife programs to their col-leagues and solicit ideas about new ways to steward the land.

Having PhD biologists on the team is, for Blackmore, “an amazing opportunity,” she says, because she learns more from them in the field than she would learn if she went back into a classroom for her mas-ter’s degree. “This is pretty much as good as it gets. To get on [with Imperial] and be able to work with wildlife, developing programs, has just been fabulous.”

The volunteers on the wildlife team harness the lunchroom discus-sion of sightings and turn it into data to help Blackmore track activity on the lease.

“People talking about wildlife has always existed, this [Wildlife at Work certification] just formalizes the discussion,” she says.

Collaborating with the WHC provides a structure for management, employees and community members to create, conserve and restore wildlife habitats on corporate lands. The projects undertaken are all vol-untary efforts that exceed regulatory requirements.

To be eligible for certification, a company must have been carrying out its programs for at least a year and must have a fully documented management plan that lists goals, objectives and ways of achieving them.

In 2010, the Cold lake operation was one of 281 sites recognized for creating a Wildlife at Work program, for a total of 640 scattered across 10 countries. Certification provides third-party credibility and an objec-tive evaluation of projects.

At Cold lake, Imperial has a whole portfolio of wildlife and habitat programs in place, starting with a database of observations made by workers, who are in their sixth year of filling out cards and taking digital photos whenever they see any wildlife.

Besides serving as a species inventory, the database allows Blackmore to track the interactions of wildlife with company facilities. Workers’ pho-tos are supplemented by pictures from five strategically placed motion-detection wildlife cameras that were installed last July.

From these she can estimate the number of successful versus non-successful interactions with facilities. “Successful” means the animal crosses under a pipe or bounds over it rather than travelling parallel to it.

Imperial ensures there’s a crossing available at least every 500 metres by routing the pipe through the landscape so it’s either on ground where animals can jump over it or at least 1.8 metres above a dip so they can pass under it.

This summer, the company is buying 30 more 24-hour wildlife cam-eras to give a much more comprehensive record of successful versus non-successful interactions with the facilities.

To date, most of the pictures from the motion-detection cameras have been “just a lot of calm grazing around and under the pipeline,” Blackmore says. She makes the rounds of the cameras to download them every six weeks.

The second program in the wildlife habitat portfolio is a waterfowl survey that’s been carried out since 1998. Twice a season, a biologist and a summer student tour the wetlands and count species and populations.

The waterfowl program is growing because after years of sharing knowledge with Ducks Unlimited Canada (DUC), Imperial has entered into a formal long-term partnership with DUC to complete a wetland inventory of the area and collaborate on developing best management practices for wetland habitat.

DUC is a national non-profit organization that works to conserve wetlands and habitat for North America’s waterfowl, other wildlife and people. It calls Alberta the key “duck factory” in North America with its eight million waterfowl and 20 million shorebirds using its wetlands and surrounding habitat to raise their young.

In 2000, Imperial’s Cold lake workers started enhancing wetland habitat on the lease with bird and bat nesting boxes, osprey nesting platforms and nesting tubes for certain types of birds.

This summer they’ll add 50 new bird boxes, 10 bat boxes and 20 waterfowl nesting boxes to the 150 currently in place. The boxes are pur-chased ready to assemble through the Alberta Conservation Association, out of Red Deer, Alta.

An exciting next step for Imperial Oil is the opportunities presented by its Kearl oilsands mining operation, which is currently under construc-tion about 70 kilometres north of Fort McMurray, Alta. The company is planning on having a WHC team go up to see what the possibilities there might be. Phase 1 of Kearl is targeted to start up in late 2012. awl

“ People have an innate interest in wildlife. In the lunchroom, people are always talking about what moose or lynx they saw in the morning. We have people with tracking experience, and aboriginal people who have lived on the land their entire lives.”

—Courtney Blackmore, Environmental Advisor, Imperial Oil

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16B | Oilsands Review Supplement June 2011