The petroleum industry will reduce the amount of freshwater used in oil recovery by employing the same strategy that significantly cut oilfield flaring emissions across Alberta, says a senior industry official.

The Alberta government’s water-use and policy advisory committee, which included co-chairs from government, industry and the environmental community, recommended such a strategy in its final report released last week.

Some critics worry that the approach, which is voluntary although backstopped by new regulations if cuts aren’t made, won’t be as effective as banning or phasing out the controversial practice of injecting freshwater underground to enhance oil recovery.

Industry, however, believes the strategy has worked well to cut flaring emissions across the province by at least 70 per cent since 1996, says David Pryce, vice-president of Western Canada operations for the Canadian Association of Petroleum Producers (CAPP).

Lorne Taylor

Oil and gas companies have already voluntarily cut their freshwater usage by at least 50 per cent over the last 10 years, said Pryce, industry’s co-chair on the government’s water-use advisory committee.

“My expectation is that we will see continued reductions,” he said in an interview. “We want to protect the resource and protect other priority users of the water.”

The advisory committee stopped short of recommending a mandatory ban or phase-out of oilfield freshwater injection, despite calls to do so by some rural municipalities and landowners who worry about drought, climate change and increasing water shortages.

The committee also didn’t set specific water-reduction targets for the oil and gas sector, something hoped for by Alberta Environment Minister Lorne Taylor, who appointed the multi-stakeholder committee.

“I think he would have liked to have seen targets set,” said Val Mellesmoen, a spokeswoman for Taylor. “But he’s extremely happy that they made progress and are going in the right direction.”

Industry co-chair Pryce, as well as Mary Griffiths, the environmental community’s co-chair, both say there were good reasons why the committee decided to leave the setting of water-reduction targets to a separate and larger government-appointed body, the Alberta Water Council.

The advisory committee didn’t have sufficient data from Alberta Environment on how much freshwater oil and gas companies are actually using compared with their total licensed amounts, versus how much water is available in the province’s regional water basins, they say.

“That would have made it very difficult to set reasonable targets,” said Griffiths, a policy analyst for the Pembina Institute for Appropriate Development.

Pryce said that from the industry’s perspective, “there was some discomfort about setting a target when we didn’t know whether or not we’d be able to achieve it.”

The flaring-reduction strategy, a consensus-based approach that was led by the Clean Air Strategic Alliance (CASA), worked very well because the multi-stakeholder groups involved spent months gathering the right data to ensure targets made both environmental and economic sense, Pryce said.

But Don Bester, director of the Butte Action Committee, a group of ranchers and other landowners in the Caroline area northwest of Calgary, says leaving target-setting to the Alberta Water Council will take still more time to resolve a serious and pressing problem.

“I see some stumbling blocks . . . I’m not certain what’s going to shake loose out of this whole thing,” he said.

Bester said he’s also concerned that a new environment minister might not give oilfield water injection the same priority as Taylor, who has publicly stated that his preference is to see the practice eventually phased out.

Taylor wants to spend more time with his family and is not running in the Nov. 22 provincial election.

Bester acknowledged that the water advisory committee’s final recommendations, although lacking regulatory teeth in his view, “seem to be appropriate at this time. We’ll have to keep hammering away at them on this issue.”

Alberta Environment spokesperson Mellesmoen said that the new minister will need time to get up to speed on the portfolio, and won’t be able to take the committee’s recommendations to the new cabinet until early next year.

But she added that she doesn’t expect the new minister will have a lot of trouble taking forward the recommendations, because the committee managed to produce a consensus report.

“The Pembina Institute and the environmental network may not have gotten everything they would have liked,” Mellesmoen said. “But industry also did not get all that they would have liked. So it’s a compromise, and they’re moving forward.”

The committee did recommend that final water-reduction targets should be set for virtually all water users in Alberta, including the oil and gas industry, by 2015 as proposed in the government’s Water for Life long-range water-management strategy.

But environmental co-chair Griffiths noted that the committee also recommended taking action much sooner than that to reduce freshwater use by oil and gas companies on a case-by-case basis, especially in areas of the province with water shortages.

The committee has recommended a new regulatory process for Alberta Environment and other regulators to use, in reviewing set-term water-use licences that are all coming up for renewal within three to five years.

Under the new process, all licensed users would be required to look at alternatives to freshwater, such as deep saline groundwater or carbon dioxide injection, for enhanced oil recovery. Companies would have to use such alternatives where economically feasible and practical.

“You can take very quick action in those areas where there are already water shortages,” Griffiths said.

The committee also recommended that all holders of permanent water licences, as opposed to set-term licences, review how much water they’re actually using and voluntarily turn over any surplus not being used to the provincial Crown.

Pryce said the approach recommended for both kinds of licences balances the need to conserve and use freshwater wisely, especially in regions with water shortages, with respecting the rights of licence holders and the economic benefits of oilfield water injection.

“Half of the oil production in the province is water-assisted,” Pryce noted. “And that translated in 2003 to about $447 million in direct royalties.”

According to Alberta Environment’s most recent figures, the oil and gas sector was licensed in 2001 to use 4.6 per cent of all water allocated in Alberta.

In comparison, the agricultural sector was licensed to use about 46 per cent of all water allocated, and municipal water supplies accounted for 11 per cent.

Of the 4.6 per cent licensed to oil and gas companies, less than half or 1.9 per cent – amounting to just over 276 million litres – was injected underground for enhanced oil recovery.

Of the 276 million litres, 47.5 million litres consisted of surface water or groundwater – or 0.4 per cent of total water allocated in the province.

The rest of the water used in enhanced oil recovery was re-injected saline water – as opposed to freshwater – that was recovered with the oil from the reservoirs.

Griffiths, however, said while freshwater use in conventional oil recovery has been declining for the last decade, the amount of freshwater being used to make steam for heavy oil recovery is increasing and projected to rise further.

Local watershed-management groups in the Cold Lake region and other places with heavy oil recovery operations will need to identify water-short areas so water-reduction efforts can be focused in these areas under the recommended new regulatory process, she said.

“It’s a pragmatic approach, given the fact that we don’t have the infinite resources to do everything perfectly all at once or the adequate data,” Griffiths said.

WATER-USE STRATEGY HIGHLIGHTS

* Additional measures are needed to protect Alberta’s non-saline (freshwater) sources:

* A concerted effort must be made to reduce or eliminate, on a case-by-case basis, the use of freshwater for underground injection;

* Government should implement a new provincewide regulatory process that ensures specific limitations on the use of freshwater sources;

* This process should apply to surface water as well as groundwater, and in the forested areas as well as the “settled” or agricultural areas of the province;

* The new process should include a “decision tree” to guide water-use applicants and ensure freshwater is conserved in areas with current or potential water shortages;

* Government should increase the detail and coverage of the provincial groundwater inventory, focusing on priority areas;

* Government should develop a more detailed water-use reporting system and public information system on water use in Alberta;

* Government and industry should invest in research to support the implementation of new methods and technologies to reduce oilfield fresh- water injection;

* Government and the Alberta Water Council should review progress in 2007 and take further measures if warranted.

(Mark Lowey can be reached at mark@businessedge.ca)