Executive Summary
This report describes the various types of primary heavy oil operations found in Western Canada, which combined are responsible for venting 4-5 MtCO2eq per year of GHG emissions, mainly in the form of methane, which constitutes a significant reduction target for either Federal or Provincial Policy. Some key summary observations found in this report are that:
- Development Options – There are at least five main types of primary heavy oil development options in use in Western Canada at the current time. Some options are driven solely by the properties of the resources being developed, while others are driven by economic choices for efficient heavy oil production.
- Technology is Available for Conservation or Conversion – Even for low volumes of surplus produced gas, not required for use as on-site fuel, there are technology options which may be applied at all scales of operation. The author believes that there is a wide range of technology options now available, which could significantly reduce GHG emissions and increase gas conservation, from these sources at a very low cost compared to the option of using Carbon, Capture and Sequestration at some larger point sources, such as the Shell Quest Project. Producer Motivation is Necessary to Effect Change – Current regulations and incentives do not appear to provide sufficient motivation for producers to conserve produced gas, or to reduce GHG impacts, in operations (mainly CHOPS area) where there is only methane being emitted. Where odour concerns are present, the same types of emissions are being conserved or converted, as operators have no choice, as the reduction activities become a requirement for them to be allowed to produce oil from
those sites, so become part of the oil production economics. In general, mandatory conservation or conversion should not be a major economic barrier for heavy oil economics. Five conclusions are proposed based on the trends and options currently available for CHOPS producers (see final report below). - Importance of Appropriately Assessing Total Gas Volumes Produced and Used by Production Sites – Since gas volumes on these sites are not currently measured on a daily basis, the methods and procedures used by producers to estimate a base Gas Oil Ratio (GOR) for each site, and the volumes used as fuel are critical to establishing how much produced gas is available for potential capture, vs. being emitted by flaring and/or venting. A set of proposed vent quantification standards were developed in 2004, but do not appear to have been widely implemented by the industry. Current reactive regulations
result in much of the vent gas being emitted before economic conservation is assessed for a site. More rigorous standards for determining produced gas and vent volumes, and assessing economics based on typical well gas production on a proactive basis could result in more gas being conserved under Alberta’s Directive 60 and similar regulation in Saskatchewan.