Climate Change

Chapter 3.3

Climate Change

    Context

    The global need for energy is growing and all sources will be needed.

    As a contributor to this energy mix, Syncrude recognizes stakeholder perceptions related to the greenhouse gas emissions (GHGs) stemming from oil sands development and how we are managing our climate change risks.

    Goal

    Our focus on energy efficiency and conservation will minimize the growth of GHGs that stem from production of crude oil at our operations. We will achieve this through operational reliability, as well as continued investment in research to develop incremental and breakthrough process technologies.

    Results

    While overall energy use decreased during the year, energy intensity per barrel of crude oil produced was 1.31 million BTUs per barrel – higher than target due to reliability issues in the operation. The key to energy efficiency is through the reduction of plant upsets and a continued focus on identifying where process improvements can be made.

    Performance Highlights

    • Energy intensity increased slightly to 1.31 BTUs per barrel
    • Greenhouse gas emissions intensity averaged 0.112 tonnes per barrel produced
    • Over $26 million paid to Alberta Climate Change and Emissions Management Fund

    Our Approach

    The global need for energy is growing and all sources, including conventional oil, oil from oil sands and renewable energy, will be needed. As one of the largest single-point sources of greenhouse gas emissions in Canada, Syncrude recognizes public concern related to climate change and the expectation that we will be a responsible energy producer. Our focus on energy efficiency and conservation will minimize the growth of GHGs that stem from our operations. This will be achieved through process reliability, as well as continued investment in research to develop incremental and breakthrough technologies that reduce our GHG emissions per barrel.

    Lifecycle Greenhouse Gas Emissions
    for Various Sources of Crude Oil

    Oil sands crude has similar CO2 emissions to other heavy oils and is nine  per cent more intensive than the U.S. crude supply average on a wells-to-wheels basis.

    SOURCE: IHS CERA 2012, Canadian Association of Petroleum Producers

    Energy Efficiency Stewardship

    Syncrude has a long history of energy conservation. Our operations incorporate, for example, extensive cogeneration processes in order to recover waste heat for reuse. As a result, we do not use all the energy we produce and export excess electricity to the Alberta grid. We exported 202,000 Mwh (megawatt hours) for use by Albertans in 2013 – enough to power about 289,000 homes for a year.

    We also developed oil sands hydrotransport and low energy extraction in the 1990s. These processes enabled us to move away from the more energy-intensive dragline and bucketwheel reclaimer system, and lower extraction water temperatures by around 50 per cent, helping to save energy previously used to heat the water.

    Increased energy efficiency correlates directly to lower greenhouse gas emissions, and it also improves financial outcomes. As we continue to pursue the next generation of oil sands technologies and reliability improvements, energy efficiency remains a key factor when evaluating capital and maintenance projects. In fact, when evaluating capital spending, projects that have significant energy efficiency advantages are permitted a lower return on investment.

    As part of our adoption of ExxonMobil processes, Syncrude has fully implemented two new operations management systems – the Operations Integrity Management System (OIMS) and the Global Reliability System (GRS) – to improve safety, reliability and environmental performance. In addition, we are beginning to implement aspects of ExxonMobil’s Global Energy Management System, which will help to identify energy-saving opportunities throughout the operation.

    Even as we focus on continuous energy efficiency, major projects coming on stream will increase our electricity demand. These projects comprise the full-scale fine tails centrifuge plant, the composite tails plant at Aurora, the emissions reduction project and the replacement of two mine trains. We are proposing the construction of cogeneration and heat recovery units to help address our needs.

    Syncrude consumed approximately 130 billion BTUs (British Thermal Units) of energy or 1.31 million BTUs per barrel produced in 2013. This performance was above our established target of 1.29 million BTUs. Our 2014 target is 1.30 million BTUs per barrel.

    Energy Efficiency

    Greenhouse Gas Emissions

    Payments Into The Alberta Carbon Market

    Alberta is one of the few jurisdictions in North America that has a price on carbon and legislates reductions in greenhouse gas emissions. The Alberta Specified Gas Emitters Regulation, established in 2007, set aggressive intensity targets for Large Final Emitters of carbon dioxide. It requires operations, such as Syncrude, to reduce per barrel emissions of greenhouse gases by 12 per cent from the average of per barrel emissions between 2003 and 2005. If Syncrude does not meet this target in any reporting year, we must purchase offset credits or pay into the Alberta Climate Change and Emissions Management Fund, which is dedicated to the development of emissions reduction technology. Both these options are assessed at $15 per tonne of CO2 that is in excess of reduction targets. Syncrude did not meet the target for 2013 and offset the remainder by contributing $26.7 million into the Fund.

    Monitoring Development Of Federal Regulations

    The Canadian government has, to date, pursued a sector-by-sector approach to climate change regulation, beginning with the electricity and transportation sectors. No broad climate change legislation has yet been introduced that focuses on the oil and gas or oil sands sectors. Syncrude believes every sector of our economy will need to do its part to help reduce our nation’s carbon footprint, including the oil sands.

    The evolution of climate change policy in Canada and North America is actively monitored by ourselves and our Joint Venture owners. Because of the possible financial impact on our operations, carbon cost scenarios and related financial risks are analyzed by each of the owners as it relates to their own business and holdings. Syncrude has, for our own business planning purposes and risk assessments, examined potential future cost scenarios and related implications at a range of prices per tonne. Further evaluations, and advocacy with provincial and federal governments, are done through the Canadian Association of Petroleum Producers. Developments are reported through the Syncrude Board of Directors Safety, Health, Environment and Corporate Sustainability Committee.

    Ensuring The Accuracy Of Ghg Data

    Significant work has been done to ensure the accuracy of our greenhouse gas emissions data and volumes. We conducted a measurement program in 2013 to assess fugitive emissions from tailings ponds, exposed ore surfaces in the mine, and other sources such as liquid storage tanks. Measurement was performed by an external consultant with laboratory analysis support from Alberta Innovates Technology Futures. The results from this work are incorporated into Syncrude’s overall GHG inventory for possible future regulatory assessment.

    2013 GHG Emission Inventory Distribution

    The Role Of Climate On Reclaimed Land

    The boreal forest ecozone where oil sands mining occurs is characterized by a net water deficit. It is essential, therefore, for Syncrude to understand how climate can affect reclaimed land over the long-term, and to ensure the landscape we construct will evolve and be capable of sustaining itself through both wet and drought periods.

    Research is underway in cooperation with our COSIA (Canada’s Oil Sands Innovation Alliance) industry partners to assess how water, energy and carbon are stored and travel within a reclaimed landscape as compared to natural undisturbed areas. This includes support of the Hydrology, Ecology and Disturbance (HEAD) program, a multi-year and multi-university research program focused on the role of climate on the landscape.

    We also support the Chair in Hydrogeological Characterization of Oil Sands Mine Closure Landforms at the University of Saskatchewan. Syncrude is contributing more than $1.3-million to the five-year project, announced in 2012, with another $1.3-million provided by the federal Natural Sciences and Engineering Research Council (NSERC). Both parties will contribute additional in-kind support of $1 million.

    We have established six watershed programs at our Mildred Lake and Aurora  operations to support the climate-related research underway.

    Conversion To Led Lighting

    In an effort to reduce light pollution and energy use, we are replacing all existing lighting across our operations with LED bulbs. To date, over 1,000 lights have been replaced.

    The majority of lights at our sites are illuminated continually to ensure visibility and safety for personnel. Compared to traditional mercury vapour bulbs, LED lights are brighter, use less wattage, have a lifespan four times longer and are safer to install. We expect LED lighting to reduce maintenance and replacement costs by about $1 million annually, and to produce one less ton of carbon dioxide for every megawatt of power saved.

    Emissions by Country (2013)

    Source: Environment Canada

    Creating And Sharing Best Practices

    Toward sustained progress in energy conservation and reduced GHG emissions, Syncrude draws on the experience and expertise of others through its participation in the following external groups:

    Canadian Industry Program for Energy Conservation (CIPEC). This collaboration between government and business is aimed at improving the energy efficiency of industries across the country. Syncrude is one of two oil sands industry members.

    Mining Association of Canada, Towards Sustainable Mining (TSM). Syncrude reports its progress on energy and greenhouse gas emissions management annually. Results are externally verified every three years. Performance results can be viewed on the TSM website.

    Integrated CO2 Network (ICO2N). Representing a cross-section of western Canada’s industrial carbon emitters, this industry association provides input to government policy about carbon capture and storage (CCS) and advocates for CCS as a part of Canada’s climate change plans. The group is also helping shape a regulatory framework for CCS.

    Canada’s Oil Sands Innovation Alliance (COSIA). Syncrude helped develop the framework for the COSIA Greenhouse Gas Emissions Environmental Priority Area (EPA). While current research priorities of the EPA are not directly relevant to Syncrude operations, we continue to monitor and keep informed of opportunities where our participation may be beneficial.

    Energy Use & Greenhouse Gas Emissions

     
    2009 2010 2011 2012 2013
    Energy Use
    Total energy consumption
    (billion BTUs)
    2009 2010 2011 2012 2013
    131,858 136,623 136,647 133,926 129,705
    Energy intensity
    (million BTUs per barrel)
    2009 2010 2011 2012 2013
    1.27 1.26 1.27 1.28 1.31
    Energy intensity reduction
    (% as compared to 1990)
    2009 2010 2011 2012 2013
    7.0 7.2 6.6 6.3 4.8
    EROEI
    (Energy Returned on Energy Invested – ratio of million BTUs of crude oil product per million BTUs of energy consumed)
    2009 2010 2011 2012 2013
    4.4 4.4 4.4 4.4 4.3
    Greenhouse Gas Emissions
    GHGs - millions of tonnes
    (as per Environment Canada quantification guidelines) 1,4
    2009 2010 2011 2012 2013
    11.67 12.72 12.87 12.37 12.46
    GHGs - millions of tonnes
    (as per Specified Gas Emitters Regulation) 2,3,4
    2009 2010 2011 2012 2013
    10.01 11.09 11.24 10.67 10.91
    GHGs - tonnes CO2 e per barrel produced 2,3,4
    2009 2010 2011 2012 2013
    0.097 0.102 0.106 0.101 0.112
    GHGs - tonnes CO2e per cubic metre produced 2,3,4
    2009 2010 2011 2012 2013
    - 0.643 0.667 0.634 0.694

    1 As reported to Environment Canada. Emission calculations for the purpose of provincial and federal regulatory reporting will differ, as certain sources of emissions are excluded.

    2 CO² equivalent emissions reported include all Syncrude sources (net of industrial process, biomass, and waste and wastewater emissions) as reported to the Government of Alberta under the Specified Gas Emitters Regulation (SGER).

    3 Syncrude’s GHG emission estimates were verified by Conestoga-Rovers & Associates to satisfy the ‘Third party Review’ required by the SGER.

    4 Syncrude is a large producer of electricity and is a net exporter to the Alberta grid. Syncrude exported 202,000 Megawatt hours of electricity in 2013. Emissions from electrical power generation are included in the Syncrude total and are part of the intensity calculated on a per-barrel produced basis.

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