Alberta’s oil industry receives warning on water usage

Jun 24, 2004 02:00 AM

The province’s petroleum industry will eventually have to stop the practice of pumping water down wells to produce more oil, says Alberta Environment Minister Lorne Taylor. Public concern over injection of freshwater for enhanced oil recovery is growing faster than the industry’s efforts to reduce its use of fresh surface water and groundwater, Taylor told a Calgary oil and gas seminar on water management strategy.
"You need to do more," he told industry participants at the seminar, presented by The Canadian Institute. "I would like to see, ultimately, the elimination of freshwater in oilfield injection," Taylor added. "Not tomorrow, but over the longer term."

Some Alberta communities, farmers, ranchers and other landowners say the practice, called water flooding, is removing precious freshwater from the natural water cycle. The issue reached a boiling point earlier this year when mayors of nine communities, along with several ranchers, opposed Capstone Energy’s planned freshwater oilfield injection project at an Alberta Environmental Appeal Board hearing.
Acting on the board’s recommendations, Taylor approved Capstone’s licence to draw freshwater from the Red Deer River for the project. However, he cut the amount of water the Calgary-based company is allowed to withdraw by one-third, to 219,000 cmpy from 330,000 cm, and he limited the licence to a one-year term. He also directed Capstone to look for an alternative supply of non-potable water for part of its operation.

Taylor warned seminar participants that their industry, especially if it doesn’t do a better job of communicating with the public about oilfield water use, "will see a lot more ‘Capstones.’ " In a preliminary report released in April, an Alberta Environment advisory committee looking at water use recommended that the oil and gas sector continue taking steps to voluntarily cut back on freshwater in all its operations.
But the multi-stakeholder committee, which includes industry and environmental group representatives, stopped short of recommending a mandatory province wide cap on the industry’s fresh water usage.

The committee is scheduled to submit its final recommendations by late summer or early fall, Taylor said.
"What I want to see are some concrete goals to actually reduce (oilfield) injection of potable water," he said.
But some industry speakers at the seminar challenged the public perception that the oil and gas sector is using a lot of freshwater. Less than 1 % of all fresh-water allocated by the province is actually being used for enhanced oil recovery, said Stuart Lunn, an environmental scientist with Imperial Oil Resources. In 2001, oil and gas companies pumped just over 37 mm cm of freshwater down wells, a fraction of the total 9.4 bn cm of water allocated in the province.

In comparison, the agricultural sector is allocated nearly 45 % of the water in Alberta, Lunn said.
"By far the largest water user in the province is irrigation."
His analysis found that oilfield injection used only 0.15 % of the total freshwater allocated in southern Alberta water basins and about 3 % of the total allocation in northern basins. Lunn said it wouldn’t make sense for the government to target only the oil and gas industry for cutting back on freshwater usage, since the sector uses a relatively small amount of the resource.

Taylor acknowledged that "Alberta Environment does recognize that the oil industry does not use a lot of water."
The industry also contributed more than $ 7 bn in oil and gas royalties to the province last year, he noted. This year’s royalties could be in excess of $ 8 bn -- or more than one-third of the provincial budget, he added. But unless the petroleum and other industries reduce their usage of fresh-water, Alberta won’t have sufficient water supplies in 10 to 20 years to sustain a growing population while still protecting the health of its rivers and lakes, Taylor said.

The government’s long-term water management strategy aims for a 30-% reduction in total water usage across Alberta by 2015. Taylor said he’ll ask the new provincial water advisory council, whose 24 members were announced at the end of May, to set water-conservation targets for all water-using sectors in the province.
Along with oilfield injection, the use of freshwater by oilsands operations is also coming under greater public scrutiny. Ron Pauls, senior associate, environment for Syncrude Canada, says existing and approved oilsands mines near Fort McMurray are now allocated 1.6 % of the mean annual flow in the Athabasca River. Planned oilsands development will nearly double this allocation to 2.9 % by 2015.

Oilsands operators are working with other regional stakeholders on studies to determine by the end of next year the minimum flow needed in the Athabasca River to protect the aquatic ecosystem.
Depending on where that limit is set, it could affect production by existing oilsands plants and limit future development, Pauls said. Syncrude, he noted, now obtains 79 % of the water for its operations by recycling and reusing water from its mine tailings storage ponds, and only 21 % is freshwater.

Source: Business Edge
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