A new long-range water-management strategy for Alberta will tighten the tap on the oil and gas industry’s use of freshwater, says a provincial official.
But Alberta Environment deputy minister Ron Hicks says that the strategy initially won’t include charging the industry a price for water or banning the use of freshwater for oil recovery and oilsands operations – measures advocated by some landowner groups and environmental scientists.
The strategy will include a “strong signal” that the government wants to move toward putting a price on water, but more research is necessary before that can happen, Hicks told a water-management conference in Calgary last week.
“There needs to be some work done on the pricing issue,” he told the conference, hosted by The Canadian Institute.
The government is in the final stages of finalizing its water strategy and hopes to release it by the end of the year, Hicks said.
It will address the concern that government is hearing from all Albertans, he said, which is: “We can live without oil, but we cannot live without water.”
The strategy will include measures to conserve and reduce freshwater consumption by all users, including the oil and gas industry, Hicks added. “All water users must change the way they use water.”
Government will form a provincial water advisory council that will recommend voluntary water-reduction targets for various industry sectors.
Hicks said the strategy will be similar to the consensus approach used by the industry/government/environmentalist Clean Air Strategic Alliance in successfully cutting oil- and gasfield flaring in the province by more than 60 per cent since 1996.
Conference speakers pointed out that the oil and gas industry has less than five per cent of the total freshwater from lakes and rivers and underground aquifers allocated in the province, and it actually uses only about one-quarter of its allocated amount.
Freshwater injected down oil wells to produce more oil represents only 1.1 per cent, or 127 million cubic metres, of all surface water allocated from rivers and lakes, said David Pryce, vice-president, Western Canada operations for the Canadian Association of Petroleum Producers (CAPP).
In comparison, the commercial sector has more than 45 per cent of the total surface water allocated, while irrigation has close to 35 per cent. The oilpatch is also allocated about 23 per cent, or 35 million cubic metres, of the total freshwater from underground aquifers.
But the industry has reduced its use of this fresh groundwater in agricultural areas of the province by 80 per cent, and by 58 per cent in forested areas, during the last 30 years, Pryce said. “We believe we’ve done a fair bit over the years (to conserve water).”
About half of Alberta’s oil production is water-assisted, he said, noting that this production generated about $700 million in royalties for the province in 2001.
CAPP endorses water conservation, but it doesn’t support a provincial strategy that would eliminate the industry’s use of freshwater. This would be costly and, for some operations where there’s no practical alternative, impossible, Pryce said.
Bob Willard, a senior adviser to the Alberta Energy and Utilities Board, also rejected calls for an outright ban on the industry’s use of freshwater.
“I don’t think that is in the long-term interests of Albertans,” he told the conference.
“Enhanced (oil) recovery is a critical economic objective for Alberta.”
Oilsands operations, which use enormous amounts of water to generate steam for extracting bitumen, will be the first to feel any shortages or restrictions on freshwater use, the conference heard.
The amount of water being removed from the Athabasca River by three existing oilsands mining operations is only a fraction of the huge river’s summer flow.
However, with three more new oilsands mines planned in the area that also want to draw from the river, there could be a risk to fish and the aquatic ecosystem during low flows in the winter, said Les Sawatsky, director of water-resources engineering at the consulting firm Golder Associates Ltd.
Oilsands companies will have to negotiate regulated restrictions on using the Athabasca River, look at building costly on-site water-storage facilities, or dam one of the upstream rivers to create a reservoir for supplementing the Athabasca’s winter flows, Sawatsky said.
Representatives from Canadian Natural Resources Ltd., Imperial Oil Resources Ltd., Suncor Energy Inc., and Syncrude Canada Ltd. all told the conference that their oilsands and heavy oil operations now recycle at least 95 per cent of the freshwater they use.
However, faced with increasing restrictions and public concerns, the companies are now exploring ways to use more saline or non-potable water from deep geological formations – without having this “dirty” water plug up processing equipment.
“Water will be the biggest issue that we’ll be working on over the next 10 years,” bigger than climate change or land reclamation, predicted Brad Braun, environmental manager for Canadian Natural Resources.